First-Time Home Buyer Information - Greenville, SC
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Cameron J. Keegan
Accredited Buyer Representative
2010 Buyer Agent of the Year
Prudential C. Dan Joyner Realtors (NP)
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Not too long ago (2002), my wife and I bought our first home in Simpsonville, SC. At the time, I was not a Realtor, so the process was completely new to us. A friend highly recommended that we use a buyer agent, which helped considerably, but our buyer agent still didn't prepare us for some surprises along the way. Five months later, in April 2003, I became a Realtor; determined to help first-time home buyers avoid those surprises. Since 2003, I have helped more than 135 clients accomplish their real estate goals.
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Use a buyer agent. (period) It doesn't have to be me, just please, use a buyer agent.
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A buyer agent knows the market, and based on their knowledge, should be able to immediately identify neighborhoods that will fit the criteria you are considering.
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A buyer agent should also know the contracts verbatim, in order to answer any questions about that part of the process, before you even get there.
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It is free to you. Yes, free. The seller agreed to a total commission when they put their house on the market, and the listing agreement specifically states how the buyer agent will be compensated out of that total commission. If you buy a house without a buyer agent, you likely just made the seller's agent a good bit more money. At least with me, a buyer has never paid a single penny for my services.
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There may be some out-of-pocket costs that you need to be aware of, before you get started. (all amounts should be verified with the service provider)
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Assuming you are getting a loan, the lender may require the appraisal fee up front. This fee can vary, but in many cases is about $350. The lender may also require a credit reporting fee (typically about $25).
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While some home inspectors will allow you to pay the inspection fee at closing, most prefer the fee at the time of service. The fee varies by inspector, size of home, and other criteria. Generally, an inspection fee can range from $200 to $500 depending on the type of home.
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Other inspection services (CL-100 (Termite) Letter, Radon Testing, etc) are optional in some cases. Termite letters typically range from $75-125, and radon testing typically ranges from $90-$150 depending on the type of test performed (activated charcoal, continuous radon monitor, etc).
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Earnest Money (aka escrow), but technically it's a security deposit.
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There is no set standard for the amount of earnest money, in fact, it's not technically required. You would just have a hard time convincing the seller to accept an offer without it. This amount can vary based on the price of the home, and is part of the negotiations.
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The earnest money for many first time home buyers is $500-$1000, but you can literally negotiate pretty much any amount you feel comfortable with.
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The purpose of this money is to give the seller piece of mind, since they will be essentially taking their home off the market.
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This money is held in a trust account, so it is deposited, and must be deposited within 48 hours after the contract is finalized.
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This earnest money is not at jeopardy of being lost. The contract provides very specific contingencies for inspection, financing, appraisal, etc. If you should exercise any one of those contingencies, a release should be signed, directing that earnest money back to you.
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The earnest money deposit is credited back to you at closing, and reduced from the amount you would have brought as your down payment and/or closing costs.
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The search process...
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The first thing I would recommend is meeting with a lender or bank to find out exactly what you qualify for (type of program, payment, etc). That is probably the scariest part, but you are probably making it scarier than it needs to be. I know we did!
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The next part of the process involves asking yourself what you want in a home (location, payment, bedrooms, bathrooms; the list goes on and on), but don't be surprised if your wants and needs change throughout the process. Honestly, that's the fun part. You'll notice I mentioned payment here too. I did this because what the lender says you can "afford" isn't always in line with what you feel comfortable paying every month. When we purchased our first home, we were pre-approved for far more than we ended up spending, since you still want to have a life outside of your new home.
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After that, it's time to go house hunting with your buyer agent! A good buyer agent will have sent you detailed information about homes on the market, but don't be too quick to rule properties out simply based on the photographs or description provided by the listing agent. You wouldn't want to completely rule out what may have been the "perfect" home.
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Once you have found your future home, you will know almost as soon as you walk through the door. If it feels like home, it is home. Don't be afraid to show that you're excited either. If you are using a buyer agent, they will still keep your best interests in mind, and won't relay that excitement to the seller or their agent.
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The rest of the process...
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Once you find your home, it is time to write the offer. Typically sellers feel most comfortable with a closing date between 30 to 60 days. Less than 30 days gives them very little time to get out, while more than 60 can be a little too much for a seller to handle. Not to mention the fact that you're probably a little too exited to wait 2 whole months or longer!
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After the contract is negotiated, we will schedule any inspections and get things moving with the lender. I personally attend all of the inspections for my buyers, because I feel that it is important to have first hand knowledge of what the inspector found. Once the inspection is complete, we will typically receive the report within 24 hours. At that point, we formulate a list of requested repairs. There are certain items protected by the contract (i.e. electrical, plumbing, leaks to the roof, etc). If the seller declines to make repairs to any item protected by the contract, you can exercise your right to terminate the contract.
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After the inspection, I'll be honest, there is a lot of waiting. Much of the work at this point, is done behind the scenes by the lender and closing attorney. They should give regular updates, but at this point, it is waiting for "clear to close", which is the lender saying you have the "green light" to close on the house.
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Once you get the "clear to close", you should receive copies of the HUD-1 settlement statement, which details every penny moving from the buyer to the seller, and vice versa. You will typically receive this document 1 or 2 days before closing.
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Then you go to closing! Make sure you're writing arm is ready, because it is a lot of paperwork! The vast majority of this paperwork is identical for every closing in the United States. The forms are standardized in order to ensure consistent language and protections for both the buyer and lender. The seller signs very few documents at the closing. After everything is signed, certain documents are sent via e-mail to the lender. The lender then "funds" the loan, and you get your keys!
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Congratulations!
I truly hope this information helps, but please feel free to let me know if you have any questions. I would be happy to fill in any blanks.
Cameron Keegan - Realtor
Prudential C. Dan Joyner Realtors
Mobile: 864.238.7109
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