Moving to Charleston, SC: The Good and the Bad
As the largest city in the state of South Carolina, Charleston has a rich history, is growing rapidly, and has a bright future ahead. If you're thinking about moving to Charleston, SC, I've got a local's perspective on the good and bad of moving to this amazing Lowcountry city. Charleston, South Carolina was founded in 1670 as Charles Town on the west bank of the Ashley River, where Charles Towne Landing is now located. But relocated just 10 years later to its present location on its iconic peninsula. A big part of Charleston's appeal is its architecture and cobblestone streets that remain in many areas of downtown. If you haven't done so already, it's a great idea to plan a visit to the area so you can explore and experience a lot of the things I mention in this article. The Good Southern Charm photo by Chris F Charleston is regularly featured in magazines and wins awards for being one of the best places to visit in the country and it's easy to understand why. As I mentioned before, the colorful downtown Charleston area is packed with amazing architecture dating back to its founding and the sidestreets endlessly reveal another amazing discovery after another. The huge live oaks draped with Spanish moss and rustling palmetto trees are a beautiful backdrop for the salty breezes off Charleston Harbor and clop-clop of the horse-drawn carriages as you stroll around the sidewalks. And hip neighborhoods like Harleston Village and Wagener Terrace prove to be great places to live and raise a family. Amazing Culinary Scene photo by Kim Daniels Everything from the freshest seafood to award-winning fine dining, Charleston's food scene has been top-notch for a very long time and I doubt it will change anytime soon! While one of our most famous chefs, Sean Brock relocated from South Carolina to Tennessee a few years ago, it only means it's allowed so many deserving culinary maestros to shine that much brighter! If you're a foodie, you can guarantee to be spoiled with the amazing number of dining options just in the immediate city itself. Don't even get me started about all the other options as you venture further out into the surrounding area. Strong job market photo by John Macarthur From an employment standpoint, Charleston's nickname of "Silicon Harbor" makes sense with its volume of tech-centric companies and startups that have set up shop in the area. And while there are definitely small business opportunities available, the area's largest employers are the bigger companies like Mercedes-Benz, Boeing, Joint-Base Charleston, Volvo, and of course MUSC (the Medical University of South Carolina) Charleston's weather October is typically the penultimate month for beautiful weather in the Holy City, and you can ask any local for confirmation. However, there are about 9 months out of the year that we enjoy some pretty outstanding weather here in Charleston. The mild temperature for the majority of the year makes this area a popular place for almost year-round outdoor activities. About those summer months? Well, we'll talk about those in just a second... Charleston's pace of life If you're used to the hustle and bustle of the "Big City" and are looking for a slower pace of life, Charleston and indeed the Lowcountry as a whole is the best place to be. Folks here like to leave work at work and put a premium on their personal time. You can expect things to take a bit longer than you're used to, but it's all part of that Lowcountry pace. Beaches photo by Kelsey Schisler Charleston is a coastal city and its beautiful beaches and the beaches of the surrounding towns are some of the best in the world. Spots in Folly Beach, Kiawah Island, Sullivans Island, and Isle of Palms offer plenty to choose from depending on your preferences. Living in Charleston, you're literally minutes away from the water no matter where you are. So, it's incredibly easy (and addicting) to spend a day at the beach enjoying the sound of the waves and reading a good book or dropping by on the way home from work for a stroll along the beach to decompress. THE BAD Traffic photo by Eben Kassaye Charleston is a peninsula and a lot of the surrounding areas are islands which means the bridges needed to access those places can create bottlenecks during high-traffic times. It becomes even more challenging if there's an accident along those routes. There's been talk of extending 526 into Johns Island to address some of the traffic concerns but nothing has quite materialized yet. Home Prices are higher than people expect While property taxes in Charleston are typically lower than the national average, they are susceptible to some variables you should be aware of depending on where you're considering buying a home. The average home cost has risen in recent years to well over $400,000. Because we're in a coastal area, you'll also need to consider where the home is located as home insurance rates for flood coverage can vary widely depending on where the property is located here. Your home could actually fall in a different flood plain than your neighbor, so it's important to be aware. Wages The cost of living rating in Charleston is currently 109.8 which means it's almost 10% more expensive to live here than the national average. Utilities here are 18% above the national average and housing is about 1% above the national average with median home prices coming in at around $401,979. Groceries and public transportation fall below the national average at -6% and -5% respectively. According to ziprecruiter.com, salary ranges in Charleston are between $40,825 to $70,361 but that all depends on your occupation. This all combines to make earning a living wage in the area a bit more difficult depending on what career you're in. However, for most folks, it's a balance between the quality of life and how much money you need to make that will drive your decision to move here! Bugs photo by Yohan Marion And one final note, if you're at all squeamish about nature then you might have some decisions to make. The Lowcountry is an outdoor lover's paradise, but those outdoors are also home to lots and lots of nature. From plants to animals and yes, to bugs. With our marshes, proximity to water, and humidity levels, mosquitoes, and palmetto bugs are a regular feature here in the Lowcountry and just about every southern city. Most of us simply prepare with bug spray and sit by a fire pit with a cold beverage to ward off the mosquitoes and make sure our house seals are snug to keep those palmetto bugs out there with the palmettos. For almost everyone, moving to Charleston still has more pros than cons For those that do move to Charleston, and for those that have been here all their lives the Holy City is a magical place where coastal living is the ideal way of life. Its quirks are charming and its qualities are cherished here and it's not hard to see why folks that come here to visit sometimes never leave. Have you been thinking about moving to the Lowcountry? Get started by looking at the homes for sale in Charleston South Carolina and feel free to get in touch with any questions I didn't answer here. www.CharlestonPalmettoHomes.com | Ashley.Melton@AgentOwned.com | 843-670-2333
What is Homeowner's Insurance and Do I Need It?
Home buyers, especially first-time home buyers, often ask if they actually need homeowners insurance and I get it. With the variety of expenses that come with the purchase of a home, it's natural to want to find ways to save money any way you can. But the bigger question is, do you want to save a little money now or a lot of money later? In this post, we'll go over what homeowners insurance is, what it protects, and answer the question of if you need it in the first place. What is homeowners insurance? photo by Marian Florinel Condruz Homeowners insurance is a type of insurance that protects your home and the things inside it. If damage is caused to your house from things like a fire or a flood, homeowners insurance can help pay for repairs or replacement. Homeowner's insurance also covers liability issues related to injuries that happen on your property. For example, if someone trips over an icy patch in front of your house and breaks their arm while visiting, you could be held responsible for damages related to that accident. Liability coverage will help pay for those costs if they are deemed yours. It's important to note that there are two different types of homeowner's policies: Actual Cash Value (ACV), where the value of items covered by your plan is based on how much they would cost today; and Replacement Cost Value (RCV) where the value is based on what it would cost today to replace damaged items with brand new ones. What does homeowners insurance cover? photo by Laura Rivera Personal property coverage: This pays for the items you own that are damaged, lost, or stolen from your home. These include electronics, furniture, clothing, and appliances. The reimbursement can be in two forms, full replacement value or actual cash value after depreciation. In addition, there may be higher premiums or the need to add coverage for higher-value items like fine art and jewelry. Personal Liability coverage: If someone gets injured on your property, this helps cover some of their medical expenses and other costs associated with their injuries. It will also help pay for legal expenses if you're sued for the injury. Loss of use coverage: Helps cover unexpected costs related to living in a temporary home while yours is being repaired after a covered claim. For example: if your pipes burst, this would pay for hotels or rental cars if you're unable to continue living there while repairs are completed. What's not covered by homeowners insurance? photo by Michael Jin A typical homeowner's insurance policy will usually cover the majority of situations in which a loss occurs. However, there are some that are almost always excluded including natural disasters, acts of war, and "Acts of God". Some additional exclusions you may encounter could include earthquakes, landslides, and sinkholes. Infestations from pests, fungus, and mold. Flooding from drains or sewer backups, intentional damages and wear, tear, and neglect. While some of these things are typically excluded, you may have the option to add riders to your policy to cover things like earthquakes, flooding, and even sewer and drain backups - but they'll typically be an extra charge. Terry Murphy, from Alliance Insurance Services, an independent agency in the Charleston, SC area has this to say about insuring your home in the Charleston area: " [South Carolina] has plenty of coastline that is prone to wind, hurricanes, hailstorms, and flooding. These types of storms can cause serious damage to homes over a very short period of time. Insurance in these areas can be a bit confusing." Terry goes on to say that it's possible you may need three separate policies to insure a home in coastal areas: Flood, Homeowner's Insurance, and a wind/hail policy. "Flood insurance is almost always a separate policy and is not covered by homeowner’s insurance." Terry says, "Most flood insurance is written through FEMA/NFIP; however, several private market carriers now write flood insurance." How much does homeowners insurance cost? A recent NerdWallet.com analysis found that the average cost of homeowners insurance is around $1,784 a year. It's also important to remember that while insurance companies provide coverage and payout for claims, they're also a business and need to make money. So, similar to mortgage lenders, insurance companies will assess the level of risk they'll need to assume to provide you coverage. They'll look at several factors to determine this: The age of your home and its major components like the roof, HVAC, etc. Homes in locations with high crime rates, strict building codes, and building costs. Areas prone to major weather events or natural disasters such as floods, hurricanes, earthquakes tornados. Past claims you've submitted related to the property and their frequency Your credit Even claims submitted by a previous homeowner can affect rates depending upon how recent they were made. A few other things to consider in terms of cost - If you own items of high value, the additional coverage needed can add to your cost and the amount of your chosen deductibles will affect your premiums, too. In addition, a standard home insurance policy may not include wind/hail coverage. Terry Murphy from Alliance has this to say about cost; " Generally speaking, whether a separate wind/hail policy is required or if it is included in the standard homeowner’s insurance, it will be subject to a higher 'percentage' deductible...For example, if you are carrying $400,000 coverage on your property and you have a 2% wind/hail deductible, the actual deductible would be $8,000. The 'all other peril' deductible on your homeowner’s insurance policy applies to covered losses other than wind/hail." Finally, it's important to review your coverage over time since it's likely you'll acquire additional items for your home, sell them, etc. How can you save on insurance costs? photo by George Becker If you find that your insurance costs are too high, there are some ways to uncover some savings. For example, bundling home and auto insurance policies can provide discounts from a number of insurers. Having existing or installing safety features in your home can also provide savings like alarm systems and/or deadbolt locks. So, Do I need Homeowner's Insurance or what? The short answer? No. You aren't legally REQUIRED to carry homeowners insurance, but if you have a mortgage or are applying for a mortgage your lender is going to require you to carry it. This is because your lender wants to protect their investment in case something were to happen to the home before you pay off your loan. Even if your home is paid off, insurance on your home is just a good investment to make. Everyone's situation is different, but most people don't have the resources to pay for repairs if their home is damaged or rebuilding if their home is destroyed. Your insurance premiums will be far less than a new home. Some other things to consider, if you purchase a condo, mobile home, or similar, you'll likely be required to carry insurance. Your condo or other associations may require homeowners insurance as well, so it's important you research and ask those questions. How can I get a quote for homeowners insurance? Get quotes from multiple companies. And as Terry Murphy says, "When comparing insurance quotes, it is very important to make sure that you are comparing apples to apples on not only the coverages but the deductibles, as well." Check the company's reputation and financial stability. Check to see if they have a wide selection of policy coverage options for your area/location/home type/etc., with different limits and deductibles for each option so you can choose the one that fits your needs best without breaking the bank. Conclusion I hope these tips help you feel more confident about homeowner's insurance for your home and the protection it provides for you and your family. And even if you've had a perfect track record with zero incidents involving your home, in this instance, it's better to err on the side of caution and have coverage just in case. If you want to learn more about other types of insurance or how much homeowners insurance might cost, just give me a call! Ashley.Melton@AgentOwned.com | www.CharlestonPalmettoHomes.com | 843-670-2333
Get to Know Wagener Terrace in Charleston, SC
Introduction Wagener Terrace, a neighborhood in the heart of downtown Charleston, SC, is one of the most sought-after neighborhoods in the city. This historic neighborhood has beautiful craftsman-style homes and a prime location near everything in Charleston making homes that do go on the market a hot commodity. The History of Wagener Terrace Wagener Terrace's namesake, Captain Frederick W. Wagener, was a wholesale grocer who lived at Lowndes Grove plantation. By 1919, there were only 4 houses in the area and paved roads and sewers weren't a reality until 1923 and the majority of the neighborhood wasn't built out until the 1930s. A lot of the homes built in the 30s here feature craftsman-style architecture which is notable for having a similar feel but each has its own character, making each home almost one-of-a-kind. With their botanical color palettes of light greens, yellows, pinks, and more - it's not hard to see why the neighborhood is sought-after for its cozy and earthy feel. The boundaries of Wagener Terrace are typically defined as Mt. Pleasant Street to the North, Rutledge Avenue to the east, the Ashley River to the west, and Hampton Park and The Citadel to the south. The Neighborhood With a lot of the main employers nearby, the neighborhood tends to draw a good deal of young professionals working at The Citadel, BoomTown, MUSC, and others in addition to real estate investors interested in flipping homes. A good number of homes are situated along the Ashley River with riverfront views across to Charles Towne Landing but for other residents, it's an easy walk to enjoy some time along the waterfront. The location is also ideal because it's off the main thoroughfare but within close proximity to dining, work, and entertainment whether by bike or car. Schools If you're planning on moving with your family to Wagener Terrace, an important thing to consider is the area's schools your children will attend. After all, a home in a good school district can be more valuable than one in an average school district - in more ways than one! Julian Mitchell Elementary School Julian Mitchell is a public school that serves 351 students in grades PK-5th. The student-teacher ratio is 13 to 1 with 96% of the teachers on staff with 3 or more years of experience. James Simons Montessori School This public school of 391 students in grades PK-8th grade with a 16 to 1 student-teacher ratio and 85% of the teachers with 3 or more years of experience. Simmons Pinckney Middle School Simmons Pinckney serves 278 students in grades 6-8 with an 11 to 1 student-teacher ratio and 74% of the teachers with 3 or more years of experience. Burke High School Burke's 375 students in grades 9-12 have a student-teacher ratio of 9 to 1 with 89% of those teachers having 3 or more years of experience in the field. Porter Gaud This private school was voted the #1 private high school in the Charleston area by niche.com. It's 942 students in grades 1-12 have a student-teacher ratio of 9 to 1. Tuition for 12th grade is listed as $22,460. Charleston Catholic School Charleston Catholic serves 185 students in grades K-8 with a student-teacher ratio of 13-1. Tuition for 8th grade is listed at $10,250. Ashley Hall This private boarding school is rated the #2 boarding high school in the state of South Carolina with 637 students in grades PK through 12th. The student-teacher ratio is 8 to 1. Tuition for 12th grade is listed as $28,755. Real Estate in Wagener Terrace Homes in Wagener Terrace enjoy the convenient location close to the heart of downtown Charleston while featuring yards and houses with sizes you might find in places like James Island or West Ashley. There are both older and newer construction single-family homes here with builds from 1925 up to 2019 starting at 858 square feet up to 4,000+. You'll have a range of 2-5 bedrooms and 1 to 7 bathrooms and the prices to match - homes here have a median sale price of the mid $600s up to the mid $2 millions. Does Wagener Terrace have an HOA? The neighborhood has a very active association called The Wagener Terrace Neighborhood Association (or WTNA) which has both a website and Facebook page which regularly posts information about events and other information concerning the neighborhood. They meet on the third Monday of each month and voting requires the payment of a $10 annual membership to the association but all residents are welcome to attend the meetings. How to get around Most of Wagener Terrace features sidewalks so getting around by foot is definitely an option, as well as by bicycle. It's close enough to downtown Charleston that you can easily walk there and back, and it's also within walking distance of several restaurants and shops. If you want to head directly to the beach, however, driving is your best option. Things to do nearby There are lots to do in the area, including restaurants, bars, and shops. Not to mention the lovely Hampton Park nearby located right next door to The Citadel. Each year, Wagener Terrace's Neighborhood Association holds an Oyster Roast for residents that includes all-you-can-eat oysters, barbecue, live music, and a silent auction at Lowndes Grove Plantation. Dining near Wagener Terrace Harold's Cabin Locals were thrilled to have this neighborhood favorite reopen after closing for 18 months during the pandemic. And one look through the recent reviews tells you this spot has hit its stride again. Rutledge Cab Co. The vibe, service, and food are all frequently mentioned when people talk about Rutledge Cab Co. And in terms of food, the wings, Reuben, and burgers get a lot of rave reviews. Edmund's Oast This spot quickly became a mainstay for the Charleston area and for good reason, with a great selection of beers and cocktails and a menu that belies what you might think of as "brewery food". Butcher & Bee Another mainstay in Charleston, Butcher & Bee now has a location in Nashville, TN, and the accolade of being a finalist with James Beard. The food here may sometimes seem light on choices for the carnivores, but you'd never know the difference - everything on the menu will leave you fat & happy. Lewis Barbecue image via Lewis Barbecue Instagram Mix Texas and Charleston together and you get some amazing 'Que. Time and time again, reviewers claim it's the best barbecue they've had... and mac-n-cheese...and brisket... Conclusion Wagener Terrace is an all-around great place to live. The neighborhood has a lot to offer, with its parks, historic houses, convenience, and tight-knit community feel. If you’re looking for a home with character and charm, this is the place for you! And if there’s anything I can do to help find your ideal Wagener Terrace home, make sure to get in touch. Get started on your search by viewing available homes for sale in Wagener Terrace. Ashley.Melton@AgentOwned.com | www.CharlestonPalmettoHomes.com | 843-670-2333
What are the Disadvantages of Rent-to-Own Homes?
Rent-to-own homes still exist in this housing market. Some people see them as an easy option to buy a home. But the truth is that there are a number of disadvantages to rent-to-own homes, including higher costs and riskier lease terms than you might expect. So, if you're wondering are rent-to-own homes a good idea, this post will outline some of these disadvantages so you know what you're getting into before signing on the dotted line. How the Rent-To-Own process works image by pixabay A rent-to-own contract, also known as a lease-purchase agreement is a contract between the tenant and homeowner that states a portion of the monthly rent gets credited toward the future purchase of the home. This type of agreement allows you to technically begin saving for a down payment toward the purchase of the home even if you may not qualify or have the financial means to qualify for a mortgage yet. When the lease ends, the rent credits that you've saved up with the homeowner go toward the purchase of the home technically as part of your downpayment. There's another situation for renters called a "Lease-Option" which sounds very similar to a Lease-Purchase but there are important differences you should know. Lease-Option vs. Lease-Purchase image by pixabay One of the most important differences to know between the two terms is that a lease-purchase is legally binding, requiring you to purchase the home at the end of your lease - while a lease-option simply gives you the option to purchase the home. Signing a lease-option agreement does require you to pay an "option fee" to the homeowner. The option fee gives you the first right to buy the house when the lease is up and the lease will state how much of the rent payment would go toward the purchase price. If you're not sure if this is the home you'll want to buy when the time comes, it's a good option to consider. The downside is that if you choose not to purchase the home, you will most likely lose the option fee, but you're under no obligation to buy if you decide you don't like the home within that period of time. While a lease-purchase is similar in the sense that a portion of your monthly rent payments is credited toward the purchase of the home, the differences are you're legally bound to purchase the house and the purchase price is typically decided at the time of the contract signing. The risks of rent-to-own contracts for buyers 1. You pay more over the long term Most rent-to-own agreements feature higher monthly payments than if you were simply renting an apartment with a standard lease. It's important to review the agreement to understand how the money is being credited because not all of the additional money during your rental period will go toward your purchase credit. If the standard rent for the home is $1,600 a month and the rent-to-own agreement is $2,000 a month, it's possible that only $300 of the additional $400 a month is going toward your credits. 2. You Could Lose Out on Savings image by joslyn pickens Most rent-to-own agreements require a nonrefundable fee based on the home valuation which can be between 2.5%-7%. While the number's negotiable, on a $350,000 rent-to-own home you'll pay between $8,750 to $24,500 in addition to the higher rent to enter into the agreement. 3. Your agreement could lock in a bad valuation Home prices aren't static and the real estate market fluctuates with changes in interest rates, available inventory, and other factors. Although home values typically appreciate over time, list prices on comparable homes could drop by thousands within just a few weeks. Of course, this is the nature of real estate, but the issue is that since most agreements state the agreed-upon sales price, you're essentially locking in the price of the home from 1-5 years before you actually buy the home. 4. Expect to get your hands dirty image by pixabay Let's say you agree to sell your mountain bike to your friend for $150 at the end of the month. And during that month your friend borrows it to test it out. Would you be willing to pay $100 to replace the tires, brakes, and a pedal they broke? I highly doubt it. You agreed to sell the bike for $150, so spending $100 on repairs means you're only making $50 at the end of the month. The same thing applies to a rent-to-own agreement. Your landlord isn't going to be keen on spending thousands of dollars on maintenance and repairs over the next 1-5 years if the sales price of the home is set. Most agreements will contain wording that requires you to pay for all repairs and home maintenance for the duration of the contract. image by magic k Of course, you'd be on the hook for these expenses if the home were yours and you'll want to make sure the home is in good shape when you purchase it. But, the fact remains that these are additional expenses you'll have to consider. 5. Late or missed payments could void the contract Make sure you understand what penalties are incurred for late or missed rent payments. Unlike a standard rental agreement where late fees are the norm for one-off situations - even having those fees waived under extreme circumstances - it could be cause for termination of your contract in a rent-to-own agreement. It's not just rent payments, either - make sure to read your fine print for a potential host of other defaults you could face for other violations. 6. Your Home Might Not Qualify for a Conventional Mortgage With a rent-to-own agreement lasting anywhere from 1-5 years, a lot can change with your financial situation - a lot can change in a week! Even if your situation was in good shape when starting out on your rent-to-own journey, you're not guaranteed a loan approval when the time comes to purchase the home. So it's important that you're taking steps to improve your credit score, debt-to-income ratio, and making your rent payments on time to put you in the best position with a mortgage lender for a loan approval down the road. And even if you're doing all the right things, interest rates could go up, you could change jobs, and other external factors could also present obstacles in the future. Conclusion If you’re considering buying a home, rent-to-own properties may be an option. It could help you get into your dream house when your current situation doesn't allow for it. However, it does come with risks you should be fully aware of before proceeding. You need to be careful about the contract and make sure that you understand all of the implications before signing on the dotted line. However, there are many options for potential home buyers to explore instead of rent-to-own and in some cases, renters can actually have an advantage in buying a home when the time comes. If you want to own your own home, but think you may not be able to afford one, get in touch with a qualified Realtor® like me today to ask all your home buying questions like how you may qualify as a first-time home buyer or for available home buyer programs. Ashley Melton, Realtor® | 843-670-2333 | Ashley@AgentOwned.com
A List of What Homeowners Can Do Without a Permit
As a homeowner, there'll come a time when you decide to make a change to your home. Whether it's due to some type of damage that needs to be repaired or a remodeling project you've been considering. But it's important to know which home projects require the proper permits and which don't. In this post, I'm giving you a list of six different projects that don't require a building permit. What is a building permit? photo by Daria Shevtsova Building permits are legal documents local governments issue allowing you to proceed with construction on a project. These permits ensure your projects meet building code requirements that minimize potential health and safety risks for you and others. When do I need a building permit for home improvements? As a general guideline, anything structural, electrical, plumbing, or mechanical would require a permit. However, we're talking about major modifications in those instances. There are still a number of projects around the house that aren't considered major and won't require one. Home improvement projects that don't require a building permit An important note: This list is general, so the best thing you can do is check with your local regulations to be completely sure as local building codes can vary from city to city. Replacing an existing wall or ceiling light fixture If you're replacing an existing light fixture on the wall or ceiling with a similar fixture, you typically won't need a permit. However, if you're planning to replace or add an outlet, ceiling fan, or electrical wiring there's a strong possibility the proper permits will be needed. Repair or replace plumbing fixtures photo by Dominika Roseclay Plumbing fixtures such as faucets and shower heads that are "like-for-like" replacements typically do not require a permit. However, replacing larger items may require them. Certainly, actual plumbing pipes and any fixtures that didn't previously exist will most likely require permits. Repair non-structural damage to walls and ceilings. photo by Ksenia Chernaya When it comes to remodeling your home, you'll likely need a permit for any project that could affect the structure of your building. But if you're just repairing non-structural damage—like cracks or holes in drywall or paneling, water stains on ceilings, broken moldings and trim—these fixes don't require the same level of oversight. The key here is "non-structural." If your repair will affect the structural integrity of your house (for example by replacing supporting beams), then you'll need a permit and probably a licensed contractor first before starting work on this type of project. Install replacement windows photo by Ksenia Chernaya If you replace any of your windows, they must be the same size and design as the ones being replaced. If they don't operate in the same way as their counterparts did before, then they won't qualify for this exemption. Also, if the new windows are larger than your old windows, you'll need to cut larger openings to fit them and a permit is required. This guideline would include doors with windows and skylights as well. Install new flooring photo by Skitterphoto Adding new flooring is one of those home improvements that can make a huge difference in the look and feel of your home. Luckily, in most cases installing new flooring is another project that won't require permits. Installing new countertops or kitchen cabinets New countertops or kitchen cabinets are another home improvement project that can have a big impact on the look of your kitchen. As long as the installation doesn't require modifications to the surrounding structure of the home, a permit will usually not be required. What if I need a permit but do the work without one? It may be tempting to jump right into a project when the mood hits. But you'd be surprised what seemingly innocent projects require the proper permits. For example, installing a fence seems like a perfectly acceptable project that doesn't meet structural, mechanical, or electrical limitations but many fences need a permit! Too many homeowners have tried to save time and money by not getting the required permits, putting them in direct violation of city building codes. Fines and penalties from the building department and removal of the completed work are all consequences of trying to avoid the permitting process. In addition, if you try to sell your home a few years down the road home inspections could uncover these projects, delaying the sale and causing fines, penalties, and tearing out the work and starting over. And finally, as the property owner, if your home suffers any damage related to the work done without a permit it could void coverage from your homeowners' insurance. Conclusion Property owners can do a lot of work in their homes themselves without the need for permits and the lengthy waits for inspections that sometimes come with them. But it's important to know the limits of what you're able to do in your home and stick to those guidelines to avoid losing time and money in the long run - even jeopardizing the sale of your home. My best advice is, "When in doubt, check it out." if your project doesn't seem to fit any of the projects in the list above, it's best to check with your local government or to hire a contractor to ensure the job gets done right, you're in code compliance. It will be much cheaper to pay for the permit application for the type of permit you need in the long run. Ashley Melton, Realtor® | 843-670-2333 | Ashley.Melton@AgentOwned.com
Living in Carolina Bay-West Ashley, South Carolina
About Carolina Bay Carolina Bay is a master-planned community in the West Ashley area of Charleston, South Carolina. The family-friendly neighborhood offers some of the newest homes in the area having been completed in 2020 by Pulte Homes. Conveniently located off Route 17, also known as, Savannah Highway and Glenn McConnel Parkway, Carolina Bay is one of the top-selling communities in the area because of its convenience, home features, and amenities. You're mere minutes away from a variety of healthcare options like Bon Secours St. Francis Hospital, West Ashley Medical Center, and more. And, the neighborhood is a great option for commuters as it's located just minutes from I-526 and from there you can easily access Charleston International Airport. Schools in Carolina Bay School-age children in the community attend schools in the Charleston County School District. The following are the main ones student-aged children in Carolina Bay would attend. Oakland Elementary Located about a 9-minute drive from Carolina Bay, Oakland Elementary serves elementary-age students from Pre-K through 5th grade. The 593 students have a student-teacher ratio of 15 to 1 and get an overall "B" rating from Niche.com. C.E. Williams Middle School (North Campus) Formerly West Ashley Middle School, the north campus of C.E. Williams serves around 450 students in grade 6 with grades 7 and 8 being served at the C.E. Williams South Campus. North campus is located about 7 minutes away from Carolina Bay. C.E. Williams Middle School (South Campus) The south campus of C.E. Williams Middle School is a newly constructed building serving students in grades 7-8 and is the counterpart to North Campus. South Campus is also located around 7 minutes from Carolina Bay. West Ashley High School Just 7-minutes away from Carolina Bay is West Ashley High School serving grades 9-12 and consisting of over 1,769 students. These high school students have a student-to-teacher ratio of 16 to 1, also with a "B" grade from Niche.com. Dining options in the Carolina Bay Area There are plenty of great spots to eat near Carolina Bay, here are some of my top picks. Ko Cha Korean Restaurant Ko Cha is a hidden gem tucked away in an Exxon gas station in West Ashley just off Glen McConnell Parkway. Ko Cha serves Korean and other Asian offerings in a no-frills setting. The food is delicious and the folks that run the place are kind and attentive which is frequently mentioned in the reviews. Betty Lou's Bistro Touting "Southern Influenced Cuisine" - one look at Betty Lou's menu and you immediately see what they mean. With dishes like Pimento Goat Cheese, Flounder Sandwiches with remoulade, and fried pork chops with butterbeans - you're bound to leave there with a smile on your face. The Mason Jar by Fatboy's The Mason Jar is a diner from the folks at the Fatboy's Lowcountry Cooking & Catering company. Their Facebook page advises you to "Wear your stretchy pants" when you come, and with a menu that sticks close to their southern roots like fried oysters, red rice, and chicken livers - I'm planning to pull mine out of the dresser right now. Bear E. Patch Cafe West This no-frills cafe serves great breakfast all day long along with great sandwiches, burgers, and their in-house-made desserts. Early Bird Diner photo by Early Bird Diner A Charleston staple for just about forever, Early Bird's been featured in shows and articles all over the country. Of course, their regular menu is always good but the Sunday Brunch is what folks line up for. Try the chicken & waffle of their amazing pancakes. Taste of the Islands If you're craving some Caribbean flavors, this is the place to head and fill your belly. Oxtail stew, jerk chicken, Callaloo, Acki - they have it all! Angel Oak Restaurant A frequently changing but delicious menu, Angel Oak offers lunch, dinner, and brunch. They offer a catch of the day, burgers to seasonal house-made ravioli, and Osso Bucco using seasonal ingredients. Their "Piggy Mac" is to die for... Outdoor recreation in the Carolina Bay Area Stono River County Park photo by Stono River County Park Located just a short drive from the community, Stono River County Park is one of the newest county parks to open. The park features 1.5 miles of paved, boardwalk, and natural trails, with restrooms, a picnic area, bike racks, a bike repair station, and restrooms on the 85.5-acre site. Close by is the trailhead for the West Ashley Greenway. Magnolia Plantation and Gardens A 15-20 minute drive from the community brings you to Charleston's most visited plantation. Founded in 1676 by the Drayton family, this site has been around through the American Revolution and the Civil War to the present day. The oldest public gardens in America feature multitudes of flora and fauna that are a joy to experience anytime. Tour the grounds yourself or enjoy guided tours then grab a bite to eat at the Peacock Cafe. Shadowmoss Golf & Country Club Golf enthusiasts have one of the best values in Charleston right around the corner at the Shadowmoss Golf & Country Club. This semi-private country club offers an 18-hole course, driving range, chipping and putting greens along with pools, a fitness center, and a full-service grill. You can pay per tee time or choose from various affordable golf, pool, and fitness memberships. Real Estate Offering single-family and attached home options, the floor plans feature square footage between 1,476 and 3,800 square feet, 3 to 6 bedrooms, and 2 to 5 bathrooms. The median home price comes in right around $505,000 and the current active listings range from $450-$769k. Amenities for residents Residents of Carolina Bay enjoy a wide variety of amenities within the community including: • Several green spaces • Ponds with canoe/kayak launches • Hiking & biking trails • Neighborhood parks and playgrounds, including a children's playground • 2 Community pools • Shaded and fenced dog park • Covered pavilion with fireplace Thinking of buying a home in Carolina Bay? Hopefully, this guide has convinced you that Carolina Bay in West Ashley is a wonderful place to live! As one of the most popular spots in the Lowcountry to buy a home, it's certainly convinced others. If you'd like to know more about homes for sale in Carolina Bay or are interested in viewing a specific home in the community, get in touch today! Ashley Melton, Realtor® | 843-670-2333 | Ashley.Melton@AgentOwned.com
Mount Pleasant SC Home for Sale $355,000
Just Listed condo for sale located in Madison of Park West in Mt. Pleasant, SC 2 Bedrooms | 2 Bathrooms | 1317 Square Feet | $355,000 Condo for sale in one of Mount Pleasant's best communities of Park West. Nicely upgraded condo on 2nd floor with Garage in a gated community. Tons of natural light, open floorplan, just painted, hardwoods throughout the main living area. The kitchen has granite counters, a breakfast bar, stainless appliances, and a tile floor. You will have plenty of room for your kitchen table and chairs. Both bedrooms are a good size, both with walk-in closets and ceiling fans. A nice covered porch overlooks the pool. 1 car garage is included. The neighborhood offers nice amenities including a clubhouse, workout facility, pool, and tennis court. Park West Rec Center is located across the street. Close to beaches, shopping, restaurants, and more. Listing Details for 1300 Park West Blvd 120 Area: 41 - Mt Pleasant N of IOP Connector Subdivision: Madison Subsection of Park West
James Island SC Home For Sale $455,000
Just Listed home located in Seaside Plantation on James Island, SC 3 Bedrooms | 2 Bathrooms | 1,371 Square Feet | $455,000 Come live in one of James Island's most sought-after communities of Seaside Plantation when you choose this move-in ready home located on Lakefront Drive. Freshly painted with new floors throughout, this single-story home features a great room with cathedral ceiling, eat-in kitchen, stainless steel appliances, well-appointed master bedroom, screened porch, patio and private fenced-in backyard! See all the details at the link, schedule a showing or tag a friend in the comments! More Details about 1236 Lakefront Drive Area: 21 - James Island Subdivision: Seaside Plantation
What Does Contingent Mean on a Home For Sale
In this post, we'll define what contingent means on a home for sale, show a few examples of how contingencies on homes are used, and provide advice for submitting an offer on a contingent home. What does contingent mean? Merriam-Webster defines "Contingent" as: "Dependent on or conditioned by something else." which is accurate, but it also defines it as, "likely but not certain to happen." which is also true - especially in real estate. A home listed as contingent means an offer has been made and accepted, but for the deal to move forward, certain conditions must be met. These contingencies are written into the purchase agreement or sales contract. If one or more of the conditions aren't met within a certain timeframe, the sale of the home could be in jeopardy. These contingencies aren't uncommon and typically fall within a few categories which we'll go over in the next section. photo by Tierra Mallorca What are some common contingencies? Home Inspection Contingency The home inspection contingency is put in place to ensure that the home is in acceptable condition. During the inspection, the home inspector assesses the home for all the aspects of the home from leaky faucets to cracks in the foundation. If the inspection uncovers serious issues with the home, the buyer and seller will either negotiate who pays to address the issues, ask for financial credits or the buyer may back out of the deal. It's not advisable to waive this contingency as it could result in significant expenses for the buyer later on. However, if you do decide to waive this, having a professional inspection anyway is a good idea. Financing Contingency A financing contingency, also known as a mortgage contingency is put in place mainly to protect the buyer in the event they're unable to secure financing within a certain timeframe. Of course, if you've read any of my blog posts about mortgage loans, you'll know that you should get pre-approval before beginning your home search. Not only does it put you that much closer to securing your mortgage, but it sets your budget and makes any offer you submit stronger. However, things can still happen after you've been pre-approved that could cause changes in your loan eligibility. Many a transaction has screeched to a halt after it's discovered that buyers have taken out a loan, purchased new furniture for the home on credit, or changed jobs - all of which change the buyer's financial situation in the eyes of the mortgage lender. This contingency allows the buyer the option of time to secure different financing or walk away from the deal without losing their deposit if they're unable to secure a mortgage. In a competitive real estate market, it may be tempting to waive this contingency to get the upper hand in a bidding war. But doing so means if the buyer is denied the loan, they can lose their deposit. Appraisal Contingency A home buyer's mortgage lender will always require a home appraisal as part of the loan approval process. While the seller may be asking for a specific amount for their home, and it seems reasonable based on the market and the values of other homes in the area, the lender is only going to loan an amount that the home appraises for. So, while making sure the home appraises as high as possible is another story altogether, the buyer can protect themselves from this issue with an appraisal contingency. With an appraisal contingency, the buyer has the option to negotiate for a lower price on the home or opt out of the contract altogether if the appraisal comes in lower than the agreed-upon purchase price. But it also gives you time, to negotiate. As the home seller, you may ask the buyer to make up the difference in cash, offer to meet them in the middle on the difference, or challenge the appraisal if you believe it used inaccurate info. In seller's markets, it can be tempting to waive an appraisal contingency to make your home offer more attractive to the seller. But, you could certainly find yourself paying more than the home is currently worth setting you up for the need to stay in your home long enough to build up your equity or take a loss if you sell the home again within a few years. Just remember that the lender will only offer a certain amount based on the appraised value, and you'll be on the hook for the rest. Title Contingency It's pretty much standard in every real estate transaction that the home in question comes with a clean title. A clean title means that the seller owns the home free and clear and there are no liens or other encumbrances on the home bringing the true owner of the home into question. Confirming this involves performing a title search which is done by a title company whose job is to make sure the seller is the only one with a legal claim to the home. Title contingencies protect the buyer should any issues with the title be revealed. If any liens or other issues are discovered, the seller is required to resolve those issues before the sale of the home can be completed or the buyer can walk away from the deal. photo by Thirdman Home Sale Contingency This states that the purchase of a home is contingent on the buyer being able to sell their home first. It's also quite common for the seller to reject this contingency, especially in a seller's market because there's most likely a list of backup offers that may be able to close quickly without this contingency in place or will to waive it altogether. One way home buyers can avoid the need for this is to use a lender that can provide a bridge loan or other methods of securing the funds to avoid the contingency, but these alternative methods could be very risky and I don’t recommend them. Buyers can also request a later closing date than typical allowing you more time to sell your home. Most of the time, however, this will be rejected as well UNLESS the seller is also trying to find a home or they're not in a rush to move in the case of a family who wants to wait until the end of the school year. In most situations, though a home sale contingency never favors the seller so it will be difficult to keep this in place. If a seller accepts this, they lose most of the control in the transaction relying on the buyer to make good decisions on the listing and pricing of their home to sell it quickly. Being in that sort of limbo will turn most sellers off of the deal. Types of contingent statuses Contingent with Kick-Out One way for the seller to maintain control of the sale of their home with a home sale contingency is to include what's called a "Kick-Out" clause in their agreement. "Contingent with Kick-Out" means that the seller will accept the buyer's offer with a home sale contingency but will continue to accept backup offers. If the seller receives a better offer without a home sale contingency, the seller can "Kick Out" the current buyer from their purchase agreement if they're unable or unwilling to waive their home sale contingency or make a better counter offer. Homebuyers need to remember that the seller can't simply cancel their current agreement with you using this tactic. They're required to inform you of a better offer and allow you the opportunity (usually a 48-hour window) to meet or beat it. Contingent with No Kick-Out The most common contingent status is "Contingent with No Kick-Out" which prevents sellers from accepting other offers while the current contingencies are negotiated. Even if the seller is frustrated with the negotiation process and wants to move on, they can't until all efforts to compromise are exhausted. Contingent Continue to Show If your real estate agent sees a listing that's designated, "Contingent-Continue to Show", this means the seller has an accepted offer but the buyer has included multiple contingencies in the purchase contract that need to be addressed. And while that happens, the seller is allowing the home to continue being shown and hoping to receive backup offers. While for the current buyer, you could certainly take this as a sign that your offer is on shaky ground - for other potential buyers, it means it could be worth submitting an offer. That is of course if your offer contains fewer contingencies than the current offer. Contingent No Show Once they've accepted an offer, most sellers don't want the hassle of continuing to show their home while under contract. "Contingent - No Show" is a pretty good sign the home is as good as sold and it would be unlikely that trying to submit an offer would be productive. Short Sale Contingent The term, "Short Sale" is a bit of a sneaky term because short sales are never very short... But, to be clear, a short sale occurs when the lender is willing to accept less than what's still owed on the mortgage for the home. "Short Sale Contingent" means an offer has been accepted but the seller and their agent are continuing to accept backup offers in case the current one happens to fall through. And unless the current buyer can't meet their contingencies, the sale will likely go through. So, while you could certainly submit an offer, there's no guarantee it will be accepted and you'll likely end up waiting a substantial amount of time to find out either way. Can you still make an offer on a contingent house? The short answer to this is, yes, you can still make an offer on a contingent home. No matter what contingent status the home is in, your offer would become a backup offer and would be subject to the outcome of the current buyer/seller agreement. photo by Scott Graham Tip for submitting an offer on a contingent listing Usually, you'll have a much higher chance of success submitting an initial offer on a home listed as "Active", meaning there are currently no accepted offers and all offers are being considered. However, if FOMO or "Fear of Missing Out" is hot on your tail and you'd rather say you gave it your best shot than none at all, here's my suggestion for submitting an offer. First and foremost, you must be working with an experienced real estate agent or Realtor®, not only will they be able to provide their guidance on submitting a backup offer. But, they may have a good working relationship with the seller's agent who can provide them with important information about the current offer to consider when putting together yours. What's the difference between contingent and pending? As I mentioned at the beginning of the post, "Contingent" means the property is under contract but the purchase agreement contains contingencies that need to be met before moving forward before finalizing the sale. "Pending" means all contingencies have been removed or there were never any in the initial offer and the buyer and seller are moving forward to closing. A pending listing is also no longer considered an active listing and offers are no longer being accepted. How often do contingent offers fall through? While I can't give a percentage, many contingencies may not be met. Home inspection and financing contingencies are the biggest issues I typically see in real estate transactions. photo by Scott Graham The Bottom Line Whether you find yourself in a buyer's market or a seller's market, contingencies will always play a factor in the sale of a home. Understanding what each means is important for the buyer and the seller to make informed decisions during their roles in the real estate transaction. For the buyer, contingencies are there to protect your best interests and to help you. They can also hinder your chances if you're inflexible. For the seller, contingencies can delay the process and potentially cause stress. However, they may be a necessary evil to make the sale happen. Either way, your real estate agent should be able to advise you on the best steps to take to ensure the process is as smooth and stress-free as possible. If you're thinking about buying, download my free Dream Home Handbook to help with your home search! Ashley Melton, Realtor® | 843-670-2333 | Ashley.Melton@AgentOwned.com
What is The Final Walk-Through of a House Before Closing?
Taking a final walk-through of your soon-to-be new home is the last thing you'll do before signing your papers and getting the keys on the day of closing. Most final walk-throughs are pretty quick, but that doesn't mean you should breeze through yours or skip it altogether. Read on to learn all about the process. What happens during the final walk-through? photo by Rodnae Productions The final walk-through of the home you're about to purchase is the last opportunity you have to ensure that the home is in the same state or better than the last time you were there. This is your opportunity to make sure the requested repairs have been completed, all the agreed-upon items that are supposed to convey are still present, all systems and appliances function, and that no new repairs or maintenance needs have occurred since the home was inspected. We all want the final walk-through to go off without a hitch, but the reality is - things do happen during the move-out or while the house sits empty. So, this is the last chance you have to go room-by-room with your real estate agent before you take ownership of the home. Why do you need to do a final walk-through as a buyer? While not a requirement by law, the final walkthrough of the home is one of the most important parts of the entire home closing process. This step is your final confirmation that you'll be taking ownership of the home in the condition and terms you agreed upon with your accepted contract. Who attends the final walk-through of the home? photo by Rodnae Productions Unless otherwise requested, the buyer and the buyer's real estate agent are the only people that attend the final walk-through of the home. In the rare case that the seller is requested to attend or they haven't completed their move-out, yet - the seller's agent should also be present. The buyer's agent will be able to point out any areas you may miss during the walk-through and provide guidance if any issues arise. How long does the final walk-through usually take? This depends on two things: The size of the house and the buyer's discretion. While there's no set amount of time you're obligated to take, it's important to remember that this will be the last chance you have to address any issues with the home before it becomes your sole responsibility. Whether it takes 20 minutes or more take your time and go room-by-room so there are no surprises down the road. What does the term "Broom Swept" condition mean? This term will often be used in the sales contract referring to how the seller is obligated to leave the home before ownership changes. Broom swept or broom clean simply means that the home should be completely cleaned out with surfaces wiped down, personal belongings and trash removed, and carpets vacuumed. Unless otherwise negotiated, the home will not be given a deep clean by professional cleaners. What happens if there are issues with the home during the final walk-through? photo by Mart Production For my clients, by the time they do their final walk-through, I've ensured that all the requested repairs have been made and that the items the seller agreed to leave are present according to the purchase contract. However, issues that come up during the final home walk-through are rare but do occur. If you happen to encounter an issue, it's important to be aware of what your options are before closing. If something you notice can't be quickly solved while you're at the home, there are a few things you can do: The first thing to do is to communicate your concerns with your real estate agent. They'll be able to speak directly with the seller's agent and explain the issue. Let the agents do their job to work things out appropriately. For minor issues, you can ask the seller to fix them before closing or negotiate appropriate compensation from the seller to take care of the issues yourself. This could mean withholding the seller's proceeds in an escrow account or being provided credit toward closing costs. You can delay the closing while the seller addresses the issues. In extreme cases in which major issues are discovered whether extensive damage or expensive repairs are needed, you may need to back out of the deal or take legal action if the seller refuses to address the concerns. Conclusion photo by Rodnae Productions There's a lot of excitement and nerves before the final walk-through when buying a home and you should certainly be excited! But the final walk-through is your last chance to ensure the house is exactly what you expected before being handed the keys at closing. So, don't rush through and let things slide. For any concerns you have during the walk-through, make sure to discuss them with your real estate agent to understand what your options are. It's the next to last step in the closing process and as long as you're thorough, go ahead and get excited! Start imagining where the furniture's going and when the housewarming party is! Ashley Melton, Realtor® | 843-670-2333 | Ashley.Melton@AgentOwned.com
What's The Difference Between a Closing Disclosure and a Settlement Statement?
photo by Alena Darmel Whether you're the buyer or the seller, the final part of most real estate journeys is the home closing process. And one important aspect of closing is the settlement statement... or is it the closing disclosure? These two terms can sometimes make things more confusing than they have to be, so today I'll be clearing up the confusion to help make your closing that much easier. Here's where the confusion starts. The terms "Settlement Statement" and "Closing Statement" are interchangeable. Although "Settlement" is what is typically used within real estate. These terms are used for the document provided to the home seller to help them understand their costs and payouts. In contrast, the term "Closing Disclosure" is the term used for the document that's specific to the buyer and the fees they incur. Definition of a Settlement Statement A settlement statement is an itemized list of fees and credits involved in the entire real estate transaction. This document is a detailed account of what funds like real estate agent commissions, taxes, etc. are owed by the seller. Of particular interest to the seller is the final entry of the statement which shows the net proceeds they'll receive and what the buyer owes. What's in a Settlement Statement Debits vs. Credits Your settlement statement will be organized into debits and credits in the same way your checking account statement would be. The debits are going to represent the expenses you're incurring while the credits will represent any deposits or increases to the final balance. Financial The amount the home buyer is paying for the home will be listed under the "Financial" label on the settlement statement and then any items being debited against that price will be listed. Next will be listed any personal property such as furniture or appliances the seller has agreed to sell to the buyer. These will be listed as credits to the final balance. Any repair credits or any of the buyer's closing costs the seller has agreed to pay will also be listed. The earnest money deposit minus the agent commission is the excess deposit (See explanation of "Excess Deposit" below). All remaining funds will go to either the seller or settlement agent. "Deposit including earnest money" is exactly what it says, the amount the buyer put down in good faith, including the deposit after the seller accepted the offer. The Loan Amount is how much the lender is financing toward the purchase of the home. Existing Loan(s) Assumed only applies if the buyer is taking over the seller's existing mortgage such as in the case of a VA loan transfer, etc. Prorations / Adjustments This section will list items such as the property taxes or HOA dues the seller will owe leading up to the time the keys are handed over to the new owner. Each locality may have taxes specific to their area to consider such as garbage pickup, wastewater, etc. as well as different tax schedules. If the closing date is March 10th and the seller's tax bill for January through April is due May 1st - the seller is responsible for the taxes from January through the closing date of March 10th and the buyer will be responsible for taxes from March 11th through May 1st. Likewise, a seller credit in this section indicates the amount the home buyer will owe for any prepaid taxes or payments. In South Carolina, our taxes are paid in arrears. On a settlement statement, we will see the sellers give a credit to the buyers for their portion of the year's taxes. Loan Charges to Lender Loan Charges will detail the charges from the buyer's mortgage lender. If the buyer has negotiated with the seller to pay some of these costs, that debit will also be listed here. If the buyer has made an upfront payment to lower their interest rate, they'll be listed here as mortgage points. Application Fee The application fee is charged to the buyer for processing the loan application. Origination Fee The origination fee is also charged to the buyer for preparing and evaluating the loan. Underwriting Fee This is charged to the buyer for processing the loan. Mortgage Insurance Premium Mortgage insurance is charged when the buyer puts down less than 20% on a conventional loan. Prepaid Interest Interest will accrue daily between the closing date and the buyer's first mortgage payment. This is due from the buyer at closing. Appraisal Fee Typically covered by the buyer, these are fees required by the lender to pay for the home appraisal. Credit Report Fee This is the fee for pulling the buyer's credit report during the loan process. Impounds The buyer will typically set up an impound account that bundles together the cost of their mortgage principal, interest, taxes, and mortgage insurance into one payment. Aggregate Adjustment This calculation prevents the buyer's lender from collecting more money from the buyer than allowed by RESPA (Real Estate Settlement and Procedures Act). Title Charges and Escrow Settlement Charges These are fees from the title or escrow companies for notarizing signatures or performing other required tasks. Owner’s Title Insurance This is additional coverage for the home buyer should an unknown issue concerning the title arise after closing. This coverage is recommended, but not required. Loan Policy of Title Insurance Similar to the Owner's Title Insurance, this coverage is for the lender in the event title issues arise after closing. This coverage is required by the lender. Title Search Fee This is the fee charged to search public records on the property being sold for any issues. Insurance Binder The insurance binder is proof of temporary homeowners insurance until a full policy is issued. Escrow/ Settlement fee The fee charged for completing the settlement and distributing funds to the appropriate parties. Notary Fee The fee paid for witnessing the closing document signatures by a licensed notary. Signing Fee Fees assessed for any additional notary or document signing. Commission This section refers to the commissions paid to the real estate agent(s). These fees are usually the responsibility of the seller, but the total commission amount is usually split between the listing agent and the buyer's agent. Government Recording Transfer Charges These are fees charged by the county, state, or municipality recording the deed and mortgages of the new owner. Payoffs This section of the closing statement details any amounts or associated fees the seller owes to pay off the remaining mortgage of the home being sold. Miscellaneous This section will list any remaining fees or charges that don't fit into any of the above categories such as pest inspection fees, survey fees, HOA dues, etc. Subtotals / Totals The end of the statement will show a summary of what the seller owes and what they'll receive. What is an "Excess Deposit" at closing? The "Excess Deposit" line on the seller's settlement statement tends to cause a lot of questions and confusion. This line item refers to any funds that remain from the buyer's earnest money after distributing the real estate commission fees. That excess is a credit to the seller and will be included in their total payout. photo by Oleg Magni Definition of a Closing Disclosure The Closing Disclosure is specifically for the home buyer to understand what they'll owe at closing. This includes taxes, fees, etc. The buyer's lender will prepare the closing disclosure based on the estimated settlement statement provided by the closing agent. If the numbers on the closing disclosure and settlement statement don't match, it's an indication that there are issues that will require further review. The home seller does not receive a copy of the closing disclosure but both buyer and seller still receive settlement statements that summarize costs and payouts. What's In a Closing Disclosure? Loan Term The loan term section conveys the terms of your mortgage, providing an accurate look at how much and for how long you'll be paying for your loan. This section will contain five parts: 1. Loan amount This will be the total amount planned to borrow after deducting the down payment and all applicable fees that were rolled into the loan. If you notice discrepancies between this number and the original loan estimate, get in touch with your lender. >RELATED: A Guide to Pre-Approval for First-Time Home Buyers in Charleston, South Carolina 2. Interest rate This number is a percentage of the total loan amount you pay each year as interest for borrowing the money. It's essentially the fee you pay to borrow the money but it's included in your total monthly mortgage payments. This number should also not be different from that of your initial loan estimate. 3. Monthly principal and interest This section will show the actual interest and principal payments you'll be responsible for with your loan. Mortgage insurance and escrow payments will not be included here. 4. Prepayment penalty This section will include an amount if your lender is charging a penalty for paying off your balance early. 5. Balloon payment: Balloon payments are one-time payments at the end of the loan. These are usually present to keep the initial early payments lower leading up to the balloon payment. These sound like a great idea until you get closer to the end of your loan terms and have a very large payment due. Be sure of all the requirements of this route before committing. photo by Michael Burrows Projected Payments You'll refer to this section of the closing disclosure to understand how the amount you owe will change over the years and give you a clear overall picture of your month-to-month and year-to-year costs for the loan. Payment calculation Unlike the principal and interest section above, the payment calculation section will include all the elements of your payment. Principal, interest, mortgage insurance (if applicable), and estimated escrow for homeowners insurance and property taxes. If you're taking out an ARM or adjustable-rate mortgage, this will also include the calculation for the max payment at each rate change. Estimated total monthly payment This section is the total you're expected to pay each month which includes all the elements listed above. Not all mortgages will include an escrow account, but this is where that payment will be located if yours does. Speaking to your mortgage lender if this number is in any way different from your original loan estimate. Costs at Closing Typical closing costs are between 3-and 6% of your total loan amount. This section is there to give you a better understanding of what you'll pay at closing. At the bottom of all the itemized costs, you see the "Cash to Close" amount which is the full amount you'll need to have on hand on closing day. This amount includes your down payment amount so it should be higher than your total closing costs. Loan Costs This section provides a comprehensive overview of the fees involved in securing your mortgage. Origination fee: The origination fee refers to the administrative costs related to your mortgage application. This is typically between 0.5%-1% of your total loan amount. Mortgage points Mortgage points are purchased to reduce the total interest rate on your loan. Each point equals 1% of the total loan amount so this number will vary depending on the amount you're borrowing. But, the number will be reflected here. Application fee The amount listed here is the amount owed to cover the cost of processing your application and will vary from lender to lender. Underwriting fee An underwriter's job is to review your overall financial landscape to determine the risk factor of loaning money to you. The fee for this service is listed here. Services borrower did not shop for This list includes all the services required by and chosen by the lender which can include things such as the credit report fee, appraisal fee, tax monitoring fee, flood determination, and others. This is another area to compare to the original loan estimate to confirm the numbers match or are close in amount. Services borrower did shop for Items that you chose yourself such as surveys, your home inspection, pest inspections, and title-related services will be listed here. Other Costs Any additional fees not covered in the above sections like taxes and government fees, initial escrow, etc. will be listed here. This section may also include HOA fees, real estate commissions, title insurance, etc. Taxes and other government fees Fees associated with recording the new deed and mortgage into the public records are located here. Services like transfer taxes for the property changing hands and city, county, and possible state taxes are included here as well. Prepaids In this section, you'll find the amount of money you'll need in escrow to cover certain prepaid costs like mortgage insurance premium, homeowners insurance premium, property taxes, etc. Initial escrow payment at closing This section lists the amount of your initial escrow payment that includes your homeowner's insurance, mortgage insurance, and property taxes. This amount is different than the prepaids section. Cash to Close This is the full monetary amount you'll need to bring to the closing table. It includes the amount if any agreed upon, the seller agreed to pay toward your closing costs. Summaries of Transactions Here, you can view a side-by-side breakdown of what the borrower and seller's costs are at closing. As the buyer, you'll be able to see credits for anything paid by the seller in advance such as HOA fees, taxes, etc. In addition, the buyer can see what the seller will owe at closing like credits, mortgage payoffs, etc. Loan Disclosures This section will offer a more detailed overview of the conditions of your loan which include the following: Assumption Assumption indicates whether the loan can be transferred to another person or not, without major changes in the terms. Demand feature Check carefully in this section. If your loan has a demand feature it will be indicated here. This feature allows the lender to require you to pay the entire balance of the loan at any time, including principal and interest. Late payment This section lays out whether your loan imposes late payment fees, how much they'll be, and when they're imposed. Negative amortization If negative amortization is indicated here it means that your loan doesn't fully mature. In other words, any interest not paid during the term of the loan is added to the original principal balance. Partial payments The possibility exists that at some point during your loan's term, you may not be able to make a full payment. This section will indicate whether or not the conditions of the loan allow for partial payments. Even if your loan does allow for this It's important to understand if the payment is going to be held in a separate account until full payment can be made, late fees are charged until full payment can be made, etc. Security interest This section indicates if you default on your mortgage that the lender can take your home and sell it to pay off your loan's balance. Escrow account This section will explain your escrow account in more detail including what homeowner expenses are included and what you'll need to pay into it. Loan Calculations The loan calculations section summarizes all finance charges, the total amount financed, and the annual percentage rate to show you how much your home will cost you over the life of the loan. Other Disclosures This section mostly contains general information about the closing such as tax deductions, refinancing information, and if your state laws will protect you from liability on the unpaid balance of the loan if the home is foreclosed on. Contact Info and Confirm Receipt This section requires a signature to confirm receipt of the disclosure and your contact information. It's important to note that your signature only confirms receipt of the information and not acceptance of the loan. What is the Closing Disclosure 3-Day Rule? Regulations state that home buyers are to receive the Closing Disclosure form at least 3 business days before the closing date. Also known as the "Know Before You Owe Rule", the regulations allow mortgage borrowers additional time to review the information, get their questions answered, and decide whether to proceed with closing or not if changes occur in these three areas: Increases in the APR or annual percentage rate of more than an eighth of a percentage point for fixed-rate loans or a quarter percentage point for ARM or adjustable-rate mortgages. Changes in the actual loan product itself such as a change from an ARM to a fixed-rate mortgage. A prepayment penalty for paying off your principal balance early is added. In Conclusion photo by Alena Darmel It’s important to review all paperwork involved in your home transaction carefully, and this article is a great example of the confusion that can arise when trying to navigate the home buying and selling process. Choosing a great real estate agent with plenty of experience can help you dot your “I’s” and cross your “T’s” ensuring that you don’t miss a thing and come away from your real estate transaction with a feeling of accomplishment instead of stress. If you're thinking about buying or selling a home in the future, contact me today - ask any questions you may have!
Top 10 First-Time Home Buyer Mistakes To Avoid
Whether you're a first-time homebuyer or purchasing your next home, I've seen these mistakes made by both. With this list of common mistakes homebuyers make, I hope to help you avoid costly issues and come out ahead of the game when purchasing your home. 1. Not Getting With a Mortgage Lender First This is my number one rule when you plan to buy a house. Buyers need to know what they qualify for to set their budget and the seller is not going to look at an offer without a mortgage pre-approval letter. If there are multiple offers on the table, there may not be time to get with the lender and compete with them. >RELATED: A Guide to Pre-Approval for First-Time Buyers in Charleston, South Carolina 2. Hiring the Wrong Agent A home buyer, whether first-time or veteran, needs to take the time to research and choose the best real estate agent they can. Having an agent with local knowledge and experience is key. A great real estate agent should be easy to talk to, communicate with quickly, and have knowledge of the ins and outs of the area you're interested in to guide you in making the best decisions. 3. Making the House Fit As a home buyer, you're probably going to have a list of wants and needs. It's easy to get frustrated when the right home hasn't come along yet. I've seen buyers try to make a home "fit" as their stress levels rise. My best advice is to wait for the right house. You don't want to make such an important purchase, only to regret it once you're in the home and realize things aren't working for you. 4. Overlooking Location Issues Overlook location at your peril. A classic example is a busy street. You may not realize the amount of traffic you'll see if you're unfamiliar with the location, but your agent should be knowledgeable about this and point it out. Busy streets can be a problem for kids and pets, and will also be an issue when it's time to sell. Listen to the advice of your agent. 5. Getting Hung Up on Cosmetic Imperfections Buyers often get hung up on cosmetics and find it hard to see past them. For example, paint colors are a big hurdle for some. Though most people don't enjoy painting, it's a cheap way to transform the space and gives instant gratification. Try to keep the home's potential in mind when making your considerations and ask your agent whether or not a concern can be addressed in negotiations. 6. Buying More House Than you Can Afford This one seems like a broken record the number of times you've probably heard it. But, you'd be surprised how easy it can be for buyers to fall head over heels for a home that stretches the limits of their budget or how much home they're approved for. With the current real estate market, there's stiff competition for desirable homes with many being sold above the asking price making it increasingly easier for buyers to find themselves in a tough financial situation later. Your budget should factor in your other monthly expenses, not just the asking price of the home - sticking to your guns and instead focusing on a monthly payment in a price range you can afford will prevent a lot of headaches down the road. One quick and easy tip is to enter your information into a mortgage calculator that can show you what your payments would be with certain home prices, down payment amounts, etc. 7. Overlooking the Hidden Costs of Homeownership Like I mentioned in mistake #6 above, there are other factors to consider with your home purchase besides the purchase price of the home. These extra costs can add up quickly and eat up your finances, causing issues in other areas of your life you may not have accounted for. For example, your home may come with higher property taxes due to location, higher utility bills to heat, cool, and maintain due to size, and don't forget about homeowners insurance, closing costs, and possibly HOA fees. These are all items a good real estate agent should be able to advise you on during the house-hunting process so you're not depleting your savings or emergency fund to make the monthly mortgage payments. 8. Not Getting with a Mortgage Lender First (yes, it's here twice) Finding a great, knowledgeable lender (in addition to finding a great real estate agent) is so important in preparing yourself for the home buying process I put it on this list twice. A great mortgage broker will help you understand if you qualify for first-time homebuyer programs which can help you save money with your purchase. They'll make sure you understand the difference between pre-qualification and pre-approval and which one you need. And they'll also advise you on common mistakes of home buyers like making large purchases or applying for credit after your offer is accepted. These things increase your debt and negatively affect your credit score putting the purchase of the home in danger of falling through. 9. Paying PMI (or more than you have to) To be clear, having this on my list doesn't imply that paying PMI is something to avoid. PMI can help homebuyers who have a hard time pulling together the 20% down payment to get their loan. Many first-time homebuyers pay private mortgage insurance, which is fine. What I do want you to avoid is paying too much. You want to notify your lender when your mortgage is paid down to 78% of your home's LTV or "Loan-to-Value" ratio. Your PMI may automatically be canceled when you owe 78% of the home value but it does depend on the type of loan you have. So, making sure you're both on the same page and aware of approaching that number will prevent you from paying any more than necessary. 10. Letting Emotions Make Important Decisions For You Believe me, I get it. Purchasing a home is one of the biggest investments you'll make in your lifetime so it stands to reason emotions are going to get involved. The problem is that because it's such a big investment, you need to think clearly and make sound financial decisions based on the facts in front of you. Otherwise, there'll be a lot more emotions to deal with later on and not the good kind. >RELATED: The Top 5 Home Buyer Questions I'm Always Asked Stay Focused, Stay Stress-Free As of this writing, it's clearly a seller's market and buyers are making offers over the asking price because it's harder to find homes due to low inventory and it being "...very difficult to replenish or add to supply. Existing homeowners in many cases are staying put, particularly the older ones." The Washington Post. But, some of these offers are going to stretch buyers very thin over the long term because they've decided to bid more than they can afford. Set a budget. Stick to it. Stay focused. Let finances and facts dictate decisions, not your emotions. At the end of the day, buying a home isn't something that should raise your blood pressure or give you nightmares. This is an exciting time for you! Just having a few key things in place along with the right mindset will allow you to enjoy the home-buying process the way you should be: Stress-free and fun. I hope this list helps you in your home buying journey. If you have any questions, please drop me a line and ask - I'd love to hear from you!
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