Here's some information that you should know before buying Real Estate...
The successful investor is not looking for the top, nor the bottom of the market, they are looking for the right opportunity at the right time. Is this the right time for you?
Buying a home is a big decision. Whether you are purchasing Real Estate as an investment, or if your looking for a new place to call home, having a buyer's Real Estate agent on your side is crucial. A buyer's agent will help you to identify available properties, get historical and pricing information, prepare a sales contract, negotiate the deal on your behalf, alert you to any potential problems, and manage the transaction all the way to closing. In most cases, a buyer's agent earns their commission out of the sales proceeds. This means that you pay nothing for the protection of having a buyer's agent on your side.
Most people don't realize that under SC law all agents owe their fiduciary duty to the seller, unless you are their client. Think about that for a minute. Do you feel comfortable knowing that the seller is represented and that you are not? When you have a buyer's agency agreement you become that agent's client. That agent now owes their fiduciary duty to you and not the seller. The bottom line is that you are owed more protections under the law as a client, so go ahead and contact a buyer's agent right away!
Real Estate agents are required to provide you with an "Agency Disclosure Brochure" at your first substantive contact. Make sure that your agent provides you with the brochure, if they do not, find another agent! This brochure from the SC Labor and Licensing Commission will explain different types of agency, and what that means for you.
After finding the right agent the first step is to secure financing. Knowing the amount of money that you are qualified to borrow will help you to budget accordingly. You will now have a realistic price range to shop in. Being pre-approved by a financial institution also gives your offer more weight. It tells the seller that you are serious, and that they are not wasting their time on somebody who is not qualified. Your own bank or credit union is a good place to start. Ask your agent for guidance and they will be happy to help you with this.
When obtaining an estimate from your financial institution make sure that they include an estimate for closing costs, insurance and taxes. This will give you a true picture of what your monthly payment will be. You don't want to find out too late that you can't afford the payment! Remember that you will also need to budget money for utilities, maintenance, repairs, and possibly HOA fees.
Now that you have a buyer's agent, a budget, and a mortgage pre-approval in place, you are ready to start your property search. Be honest with yourself, and with your agent, about your specific wants and needs. Make a list to determine the difference between what features you would like to have. and what features you absolutely need. This will help your agent focus more clearly on properties that will work best for you. Consider your budget, your lifestyle, how you will use the property, and the convenience of your geographic location.
When you have found the right property, and you're ready to make an offer, make sure that you know what you are buying. I am sure that you have heard the phrase "do your due diligence." This simply means that you need to take the necessary precautions to avoid unwanted surprises. Make sure that your contract includes ample time to have the property inspected by a licensed contractor or home inspector. You should also have the land surveyed for property lines. A termite letter will also be required. This is an inspection for termite activity and the presence of moisture and wood decaying microbes. Make sure that you read the HOA documents along with the neighborhood covenants and restrictions. It's important to know the rules of the neighborhood. You don't want to find out too late that you cannot store your boat or install a pool on your new property!
You will also need a good Real Estate closing attorney and title company. They will search the title for any "clouds" and prepare the legal documents for the sale. Here in SC, the buyer has the right to choose their own closing attorney.
Following the above simple steps will give you piece of mind and set you on the road to success. If you have any more questions, or if you would like to discuss this further in person, please feel free to contact me at anytime.
Have fun - Michael