The Buying Process in Hilton Head SC
Basic steps in the home buying process
Home Buying Basics in Hilton Head
Finding a home is easy, if you have a real estate agent in Hilton Head who’s as excited about finding you the home of your dreams as you are. Here are the basic steps involved in buying a Hilton Head Island home.
Determine Your Financial Position. Your lender is going to put your finances under a microscope so you might as well beat them to the punch and review all your finances first. This will help you determine exactly how much house you’re going to be able to afford so you don’t get in over your head. There are a lot of financial calculators online that can help you examine your finances, including financial calculators on our own site.
Get Pre-Approved. You’ll want to meet with your lender early in the process of buying a home in Hilton Head Island. It’s far easier to get your loan pre-approved right up front rather than falling in love with a home you can’t get a loan approved for. It will also help you establish a budget because your lender will work with you to determine the type and amount of loan you can get for your home as well as the down payment required. Getting pre-approved can also help get your offer accepted when you finally find the home you want.
Find a Real Estate Agent in the Hilton Head Island Area. You want to find a real estate agent that you can trust and who understands the type of home you’re looking for, your tastes and your budget. Interview several and find one that you can build a rapport with. They will help you avoid costly mistakes, especially if you’re new to the area or if this is your first home.
Choose a Neighborhood in Hilton Head or Bluffton. The Hilton Head-Bluffton area has lots of different neighborhoods, from the gated communities known as plantations to off-plantation homes in established neighborhoods and new developments. The Hilton Head Island area has a neighborhood that suits the lifestyles and needs of nearly everyone.
Begin Your Search. If you don’t live in the Hilton Head area or even in South Carolina for that matter, your real estate agent can help you start your hunt online, using their website listings, the MLS listings and emails to look at properties and narrow your search. The more your realtor in Hilton Head knows about you, the faster they can narrow their search and find homes for you that meet your criteria.
Make an Offer. Once you’ve found the home you like, it’s time to make an offer. Your real estate agent can help you make a good offer, based on the market, your available loan and cash and comparable sales in the area, often referred to as comps. They will help you formulate your offer, including any additional terms you want in the offer, such as allowances, contingencies, the desired move-in and closing dates, etc. You may have to go back and forth with offers and counteroffers. Don’t be discouraged, it’s just part of the process.
Order a Home Inspection. This is an important step in the process and your real estate agent may have added a contingency in the offer that the sale is contingent on the results of the home inspection. This is a detailed look at your home to make sure that there isn’t anything horribly wrong with it, such as foundation problems, issues with the plumbing, heat or electrical problems, or the presence of radon or other health factors. This will not only give you peace of mind that you’re buying a good home but it can also give you an out if you find that the entire heating system is shot and it will cost you $10,000 more than you have. The contingency can allow you to get out of the deal.
Get an Appraisal. The good news is you don’t need to do anything here. Your lender will handle this for you. They basically need to know if the home is worth the price you’ve agreed to pay.
Closing. Finally, the moment you’ve been waiting for. At the closing, there are a lot of papers to sign and checks to hand over. Everything needs to be legal so there will be times when the closing date changes at the last minute. Don’t worry, this is not uncommon. At the end closing you get the keys and your house in Hilton Head is all yours.
Hilton Head Previews From Your Realtor
Even with all the technology available on the Internet – virtual tours, 360-degree imagery, videos and multiple views – there’s still only so much you can do through online links and email.
The only true way to get a good look at a home in Hilton Head Island and know it’s the one for you is to visit Hilton Head Island in person. Obviously, we want you to make your visit as productive as possible. Following are some helpful tips to make your Hilton Head Island visit enjoyable and productive.
Let me know ahead of time when you plan to come.
Tell Your Hilton Head Realtor When You’re Coming
You’ll want to tell your Realtor that you’re coming as soon as possible. You can call Coleen at 843-422-5508 or email firstname.lastname@example.org to give her the dates you’ll be here so she can start setting up Hilton Head Island home previews and send you additional information about the homes you’ll be seeing.
We will discuss how long the home previews will last depending on the needs and ages of participating family members.
Scheduling Hilton Head Home Previews
Once your visit is scheduled, let your real estate agent know as soon as possible. This will allow them to create a schedule of home previews in Hilton Head Island to maximize the efficiency of your house-hunting trip.
How many homes you can see in Hilton Head Island or in Bluffton depends largely on:
1) How many days you will be on Hilton Head Island.
2) What else you plan to do while you’re here (it can’t be all work and no play – there’s too much to do here on Hilton Head Island).
3) Who is house hunting with you.
If young children or even teenagers are coming with you, you may want to either schedule time for you to go alone to home previews or limit the time with children. Let’s face it, visiting several homes isn’t a very fun family trip. Buying a house is a big investment and you don’t want to feel stressed or be on edge while you are looking at houses. You may end up missing something important because you were temporarily distracted by a potty break.
Of course, only you can decide this as you know your children better than anyone. A good realtor will be happy to accommodate any needs you have while you’re looking for a home in Hilton Head Island. Either way, be sure you let your realtor know how many will be attending the previews.
Funding Required For Your Hilton Head Home
Buying a home in Hilton Head Island is a lot like buying a home anywhere else in the country. You have certain financial obligations you will have to meet once your offer has been accepted and your closing process begins.
Here’s the funds you will need to have in order to buy a Hilton Head home.
Earnest money for your Hilton Head Home
Escrow is a good faith deposit. When your offer is accepted and you sign a purchase contract the contract will stipulate how much earnest money is required. The earnest money tells the seller that you are serious about buying the Hilton Head home. Think of earnest money as putting your money where your mouth is. Usually, earnest money can be used to offset costs of purchasing the home. For example, if you put down $1,000 this can be used to help with closing costs, etc.
If the deal falls through escrow money is returned to you, except in cases when you back out of the deal for a reason that isn’t covered in the purchase agreement. For example, you may put a contingency in your purchase agreement that says, “based on satisfactory completion of a home inspection”. If the report comes back with something negative and the seller won’t pay for the repair, you can walk away and get your escrow back. But if you simply get cold feet, you’re going to forfeit the escrow.
Getting Your Hilton Head Home Inspection
A home inspection is always a good idea. While the lender will order one on their behalf, you want to order one yourself. You want a home inspector that is in your corner and will give you his take on the state of the home you’re buying in Hilton Head Island, not the lender’s view.
This service isn’t free but it is worth every dime. A good home inspector will be able to give you an honest, complete assessment of the home and any outstanding items that need attention.
Your Realtor will be able to direct you to reputable home inspection companies in Hilton Head Island.
The Down Payment Needed For Your Hilton Head Home
As part of your home purchase you will need to make a down payment. While a lender will front a large part of the loan needed for your Hilton Head home, they want to see you put in some money too. That’s what the down payment is for. These days, 3% to 10% is common, but the more the better. If you can manage a 20% down payment, you don’t have to carry the mortgage insurance required, which will lower your monthly mortgage payment.
Obviously, the amount needed depends on how much a lender is willing to give you. If they are willing to approve a loan for 95% of the purchase price, then you would need to make up the other 5% plus closing costs. So, a $500,000 home in Hilton Head Island would require a down payment of $25,000 in this example, with the lender picking up the other $475,000.
Hilton Head Home Closing Costs
If you have enough leeway in the loan, you may want to include the home’s closing costs in the mortgage amount. What is included in closing costs varies, but can include:
• Loan Application Fees
• Cost of Credit Report
• Loan Origin Fee
• Title Search and Insurance Fees
• Lender’s Attorney Fees
• Homeowner’s Insurance
• Private Mortgage Insurance
• Recording Fees
• Transfer Taxes
• Buyer’s Attorney
• Escrow Deposit for Taxes
• Partial Month’s Interest
This is required in addition to the down payment. During the closing period you should receive a Good Faith Estimate of all closing costs from your lender. Remember, this is just an estimate. Things like interest rates and points change continually during closing until you lock them in.