Homeowners forced by the coronavirus pandemic to hole up in their homes for much of the past year are changing a few things about their homes.For starters, COVID-19 exposed the flaws of the open
How To Buy Your Home In Charleston South Carolina Without Overpaying
Dated: October 11 2019
Do you want to buy a home in Charleston, South Carolina--without overpaying?
Here are 4 tips to make you sure YOU get the most out of your money!
It should be no surprise that the profile of the buyer most likely to overpay for a home is an eager, first-time home buyer not represented by an experienced buyer's agent.
First-time buyers OVERPAY on an average of about .79 % or $2,200 for their homes, according to a study by two senior economists from the Federal Housing Finance Agency on a nationally average priced home of $275,020.
1. Every buyer should hire an experienced buyer's agent. Your agent should know current market values and know neighborhoods. Remember, you do not have to pay your own agent; your agent’s fees are paid by the Seller, not the buyer.
2. Every buyer should use all tools available in order to determine a home's true value. Here’s a hint: when you use online home value estimators (Automated Valuation Models like Zillow's Zestimate) remember they have their weaknesses. Be sure to study the competitive market analysis from your real estate agent that utilizes the latest home sales from the Charleston Trident MLS.
3. After viewing a few homes, take time to think: sit down and write a list of pros and cons for each house you saw that day. Strive for objectivity; pay special attention to the drawbacks of each house and discuss those drawbacks with each other and with your Realtor. Drawbacks affect value and they may work to your advantage.
4. As the buyer, one way for you to maintain control of the negotiation process is being willing to walk away. If you can't come to an agreement on a fair price or if you are in a multiple offer situation where the price is more than you're willing to pay, be prepared to end your offer.
Local Charleston Realtor Chris Facello from The Chris Facello Group adds:
"First of all, I think it is worthwhile to discuss ‘what is overpaying for a house?’ In this instance, if there is an appraisal contingency in the purchase contract, it is only by choice if someone 'overpays' for a home. Rarely do buyers overpay for a home when they have good advice. The appraisal contingency protects them from being pushed into overpaying. When the market is hot, you may have a buyer pay more than appraised value for various personal reasons, but that is purely by choice to pay above appraised value. Remember, what is a home worth? It is worth what a buyer is willing to pay. An appraised value is just one person's professional opinion about that value. The true value is whatever the home sells for. So by definition, you cannot overpay for a home."
On picking a Buyer's agent, Chris says: "I think that interviewing multiple agents is best if you want to find the best agent for your particular needs. Talk with several agents and then choose the best one."
Concerning Automated Valuation Models, Chris's opinion is: "AVM's are a terrible source to determine value. There is so much more that goes into a true value analysis that those models leave out. Again, going back to our discussion on value, what one buyer may think is the value, does not mean others feel the same. I currently have a listing that the market analysis says is way underpriced, and still we cannot find a buyer. I also have had buyers purchase a home just down the road from their parents, so the value to them is much higher than any analysis can find!"
In closing, Chris says, "A buyer sets the price, always, and the final price is only what the buyer is willing to pay--this is what determines the value of a house."
Blair Halford is a Charleston native, and having grown up here and attended Porter-Gaud and the College of Charleston he has appreciation for the Lowcountry lifestyle. His extensive knowledge of the a....
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