The Home Buying Process in South Carolina
If you are considering buying a home in South Carolina and have questions about the process, read on! Keep in mind, however, that these are general guidelines and, for the most part, do not apply if you are buying your new home in Beaufort’s Celadon Living community. Whatever home you choose, buying a house in South Carolina means enjoying the low cost of living and affordable real estate. If this is your first home purchase in the Palmetto State, the following guide will help you navigate the process. We’ve also included information about first-time home buyer programs.
Determine how much you can afford to spend on a house and then save for a down payment.
One of the most important things you can do before considering South Carolina house hunting is to determine how much you can realistically afford. As a general rule, you’ll want to spend no more than 28% of your gross income on the total of your mortgage payment, taxes, and insurance.
First-time home buyers should consider costs beyond the purchase price. As a homeowner, you will be responsible for property taxes and homeowner’s insurance. In addition, depending on your down payment and loan program, you may also pay PMI (private mortgage insurance).
The down payment will be a percentage of the total cost of the home you are purchasing. For example, the down payment will be 3% for a conventional loan and a 3.5% down payment for an FHA loan. No down payment is required for VA or USDA loans.
First-Time Home Buyer Programs in South Carolina.
If you are buying your first home in South Carolina and it has been over three years since you’ve owned a home, you may qualify for grants and first-time buyer loans, making buying a home in South Carolina even more affordable.
SC Housing is a housing finance agency that partners with lenders to provide affordable first-time home buyer grants in South Carolina. The SC Housing Homebuyer Program offers down payment assistance in South Carolina and affordable fixed-rate loans.
The down payment assistance of up to $6,000 is available to first-time buyers in non-targeted counties or non-homeowners in targeted counties. The funds can be used toward your down payment, closing costs, or prepaid items, and it’s a second mortgage forgivable after 10 or 20 years.
Get pre-approved for a mortgage.
The next step is acquiring pre-approval for a mortgage. Do this before you shop for homes because it will ensure your offer is taken seriously and gives you some bargaining weight. The pre-approval process is similar to that of getting the mortgage and requires documents that include:
- Asset verification in the form of bank, retirement, and brokerage statements
- Income verification, such as W-2s, 1099s, and rental income documentation
- Debt verification showing debt amounts and payments for debt
- Proof of paid rent for the last 12 months
- Gift letter if you use a gifted down payment
The lender will also run your credit report and check your credit score. You will need a FICO score of 760 for the best mortgage rates. Most lenders require a minimum credit score of 620.
Bonus idea!
One of the most valuable programs for first-time buyers in South Carolina is the Mortgage Tax Credit Certificate. The program gives you a tax credit on your federal taxes of up to $2,000 per year (equal to 50% of the mortgage interest you pay) as long as you live in the home. You can even reduce your employer’s federal withholdings to increase your take-home pay with an MCC.
You may initially pay up to $800 to receive an MCC from a lender, but the seller may pay this cost.
Find a real estate agent.
One of the first steps when buying property in South Carolina is to connect with a real estate agent who can offer advice about residential neighborhoods, average property values, and real estate markets. The real estate agent will help you through the process of preparing a viable offer on the property. The agent will help negotiate the final deal and closing when the seller accepts your offer.
A qualified real estate agent can also assist you with finding other professionals necessary to the purchasing process, such as real estate attorneys and mortgage brokers.
Working with a real estate agent should not cost you, the buyer, anything. The seller typically pays the 5%-6% fee, which is split between your agent and the seller’s agent.
If you are purchasing your new home from Celadon Living, you will not require the services of an agent or a real estate lawyer.
Find a real estate lawyer.
Because South Carolina considers a real estate closing a practice of law, a real estate attorney must be involved in the transaction. The attorney must be physically present during closing. An attorney of your choice will be responsible for the following:
- Reviewing the purchase contract
- Conducting a title search
- Applying for title insurance
- Preparing documents
- Supervising the closing
- Disbursing funds
- Recording legal documents
Find a neighborhood you want to live in.
Location, location! Finding the right neighborhood is essential, so take your time and look around. Use the following list to help you decide what you want and need for yourself and your family.
Visit the neighborhood you’re considering and drive and walk around. Are the houses and gardens well-kept? Do you see bicycles, basketball hoops, or other evidence of children that your kids might make friends with? If you visit in the evening, you’ll get a feel for how quiet or noisy the streets and homes are. Parties, barking dogs, and a busy traffic flow might not be for you.
- Do you want to live in a rural or urban area? Do you like having neighbors close by or more space around you?
- Is the neighborhood safe? Find out by doing a web search of crime statistics for the area. Is there a neighborhood watch program?
- Look at traffic and pedestrian safety measures, including local speed limits, sufficient crosswalks, and traffic volume.
- What is the proximity to grocery stores, pharmacies, medical services, postal outlets, etc.?
- Does the area have good-quality schools, colleges, and other educational opportunities for your children?
- Are there parks, walking areas, and recreational green spaces nearby?
- Does the neighborhood have restaurants and coffee shops?
- How close by are community centers, swimming pools, libraries, and faith-based organizations?
- What is the commuting distance from home to work?
- Do public transit services operate in or near the area?
- Are streets, sidewalks, and local services accessible for seniors and people with mobility challenges?
- What plans are in the works for future development in the community?
Look for a house.
Looking for a house can be exciting but approach the adventure with a few important things in mind. Home buying is not the time to be impulsive. Think about what you need now and in the future.
Here are a few things to consider when looking for a house:
- Would you prefer that your home be detached, semi-detached, a townhouse, or a condo?
- How many bathrooms do you want, and where would you like them? Family room area? Main floor? Main bedroom?
- How many bedrooms do you need? If your family is growing, consider an “extra” room.
- What about a home office or den?
- Would you like a family room?
- What about a dining room or an eat-in kitchen? Both?
- Storage areas such as closets and kitchen cupboards are essential.
- Do you want a garage? A private driveway?
- A big or small fenced yard? Space for growing flowers or vegetables?
- Is there potential for adding on rooms or renovating?
Visit as many open houses as possible within your price range. You may not be able to fulfill your entire wish list in one place, but the more choices you have, the better your chances!
Make an offer*
You’ve been pre-approved for a mortgage, your down payment is ready, and you’ve found the house of your dreams. It’s time to make an offer. Your real estate agent will help negotiate your offer, including any contingencies you have. Contingencies include (but are not limited to) the time needed to sell your current home if you have one and the receipt of a clear home inspection certification for the home you want to buy.
If and when the seller accepts your offer, you may be asked for a show of good faith in the form of an “earnest money” deposit.
*When buying a house with Celadon Living, you won’t need to worry about contingencies and negotiations. We have a dedicated team in place to help you find your perfect home.
What is an earnest money deposit?
One way to show a seller that you are a serious buyer is to provide an earnest money deposit which is usually 1% – 5% of the total cost of the house. Earnest money is not a requirement; however, it does proffer a show of faith to the seller. The deposit might be refunded or retained if either of the following scenarios evolves. If the buyer backs out, the earnest money goes to the seller as compensation. If the seller backs out, the money is returned to the buyer.
The earnest money deposit is usually paid within three days of an offer being accepted. The deposit can be paid by personal check, certified check, or a wire transfer to an escrow agent, an attorney, or a broker (never to the seller directly).
Before submitting an offer with earnest money attached, discuss the plan with your agent and review the contingencies that protect your deposit.
Get a home inspection.
If you are buying an existing or older home – get a qualified home inspector to examine the house carefully. However, when you purchase a home from Celadon, an inspection is unnecessary; you’ll choose from a selection of beautiful new model homes.
Close the deal.
The deal is officially closed when your mortgage is approved, contingencies are met, and all funds are transferred. Your attorney will have cleared the home’s title, closing costs will be paid, and you may have even had a final walkthrough of your new home to ensure it is in the same condition as when you began the purchasing process.
You will meet with your attorney and agent to sign the papers and close the transaction.
Finally, you will receive the keys to your new home in sunny South Carolina.
Congratulations, and welcome to the Palmetto State!
Visit us in Beaufort, SC!
Discover why Celadon is the perfect place to buy a home in Beaufort, South Carolina. The Celadon community includes real estate designed for a diverse mix of single-family homes, creating an inviting streetscape unified by the charm of Lowcountry architecture. Complementing the neighborhood are carefully preserved open spaces designated for community use as parks, ponds, walking trails, and other amenities.
Check out Celadon’s Discovery Visit offer and see why you’ll want to make this beautiful place your new home.
