Buying A Myrtle Beach Home | Myrtle Beach Homes | Carolina Forest Homes

Dec 26 2017

Does it Cost More To Buy A Myrtle Beach Home With An Agent?

One of the questions I get asked regularly is how much more does it cost me to have you represent me when buying a Myrtle Beach home Jeremy? See, there is this common misconception that it costs more money to have an agent work on your behalf when purchasing a home for sale in the area. Buyers just remember seeing on a closing statement this large amount of money that is being paid to an agent and they immediately think that they could have saved more money by not using an agent, or just using the listing agent. Unfortunately this type of thinking is completely inaccurate in most cases.

Section 5 of the Exclusive Right To Buy Buyer Agency Contract from the SC REALTORS® it goes through in great detail how someone is compensated. To be completely transparent with you on what these options are, I’ve attached a screenshot of this segment of the contract below:

Three Ways An Agent Gets Paid

As you can see, there are only 3 ways that an agent can be paid. Some of these options include you paying out of pocket to have an agent to represent you. But in almost all cases, you do not have to pay. The first way, is via a Retainer Fee in which the buyer pays a nonrefundable retainer fee of agreed upon amount that is due at time of signing the contract. This can then sometimes be applied to the brokerage fee as well.

The second option is a Service Fee in which the buyer pays the broker a service of an agreed upon amount that is paid whether or not buyer purchases any property. There’s options as to whether that’s all an agent receives or if there is the ability to earn more as well.

The third option is for an agent to receive compensation from a brokerage fee, which is the way I’ve worked with almost all of my clients purchasing a home in Myrtle Beach. See, when someone lists their home for sale with an agency, they sign a listing agreement that not only discusses the total amount of commission the seller is willing to pay out, but it also discusses how much the seller wants to have offered to the agent bringing the buyer.

Seller Pays Agent, Not The Buyer

See screenshot from SC REALTOR® Exclusive Right To Sell Agreement:

As you can see in the above graphic, the seller has signed an agreement already to pay the agent bringing the buyer to their property long before you have ever even seen the home. They sign this listing agreement prior to an agent processing any type of paperwork. This all gets done long before any offers have been made by the buyer. So the seller pays, not the buyer.

Will I Save By Using The Same Agent?

Some think that if they use the listing agent they will save money because they are representing both sides. The thing is, when this happens, all you do is place even more money into that agents pocket. They get the selling side and the buying side. Yes, they are going to end up doing much more work, but you as a buyer are not going to get the best representation from that agent due to the fact that they already have a relationship in place with the seller of the property. They have already spent weeks working on their behalf, marketing their property and building that relationship.

When you hire the agent as a dual agent, they basically just become a messenger then working on your side and also on the seller side. All the agents can do then is let you know what the seller said and convey to the seller whatever information you want them to do. They can’t give you as much consultation and the absolute best representation because they have to remain impartial. At the end of the day, seller is going to get the same amount of money out of the deal, you don’t get as good representation, and the dual agent gets an even larger check. So this option doesn’t really help you at all.

Any Chances The Buyer Pays?

Now, there is a scenario where the buyer would have to actually pay a commission to a buyers agent which would only take place if the buyers have a signed agreement in place and then proceed to try and purchase a For Sale By Owner (FSBO) in which the seller does not agree to work with an agent. In the past 17 years in this business, I have yet to find one who will not at least agree to hire work with a real estate agent that has a ready willing able buyer present wanting to purchase their home. Most of the time, the sellers will gladly pay what the agent has placed in section C of the compensation section as long as the person buys their home. But, if the FSBO decides that they will not pay, and the buyers are set on purchasing that particular property, then the payment to the agent would become the responsibility of the buyer to pay either the specified amount or percentage that was agreed upon at the time of signing the agreement.

Other than this exception, it does not cost anything extra to have an agent represent you when buying a home in Myrtle Beach.

What About Buying New Construction In Myrtle Beach?

The other common misunderstanding is that when someone buys a new construction home in Myrtle Beach that they will end up paying more for the home when they go to a neighborhood with a buyer versus going on their own. This statement is totally incorrect. When someone has an agent represent them with the purchase a new home from the builder, they normally will end up saving them money, or help them negotiate upgrades into the sale.

I recently helped some awesome buyers from North Carolina purchase a home here in Myrtle Beach from one of the many national builders in the area. I was able to negotiate several thousands of dollars off the purchase price as well as get the buyers an $6,000 upgraded tile shower, a large concrete patio, 6 ceiling fans, appliances, and much more. If that buyer had gone into the neighborhood on their own, they probably would not have tried negotiating the price at all with the builder or ask for any of the various upgrades.

I had estimate till it was over I saved them close to $10,000 off the purchase price as well as another close to $13,000 in upgrades in the home. Having agency representation whey buying new construction definitely pays! The build also then paid me a commission for bringing the buyer for this home.

Wrap Up

So in closing, the one thing I always say to buyers when meeting with them and explaining how buyer agency works is this: Make sure to hire someone to represent you. I hope that the person hired is me, but I know that isn’t always the case. The main thing is to find an agent that you can relate to and work well with. Once you find that person, sign the agency agreement and let them work on your behalf. Just make sure you have the right fit before signing the agency contract. Once you sign up, you are contractually obligated to work with that person until your agreement expires. Hopefully though, you work well together with this person and they can help you find the best home possible for the best price possible, in the exact location you wanted and you will spend years of happiness in your new property in Myrtle Beach. The best part is that having this type of relationship with an agent will not cost you anything more!

If you are thinking of buying a home in Myrtle Beach, I’d love the opportunity to work on your behalf in finding a home, so give me a call at 843-222-9402 if I can be of any further assistance, or do not hesitate to fill out the contact form to reach out to me.

Nov 01 2017

How Medical Bills Can Cause Title Issues

I’ve been in the business now for well over 15+ years and I consider myself a rather seasoned agent these days. During that time I’ve helped well over 400 people buy or sell a home in Myrtle Beach. I’ve run into many different issues and problems and feel that I normally do a good job handling those objections as they come up and able to figure out a resolution in a quick manner. Every once in a while though, something new comes along that is a new issue. This past week I experienced one of these things.

Watch this video to learn more about it:

Normally when there are title issues during a real estate transaction it is in regards to the seller of the property. Either they forgot to pay property taxes, had someone do work on the home but never paid them for their services, or had some sort of disagreement about the final cost and the contractor placed a lien against them. When this happens, the property will not have a clear title which is needed in order for the property to transfer hands. In these types of situations, many times the liens can be handled at closing and cleared up without issue.

However what we experienced was something completely opposite. While creditors are no longer reporting your medical bills to the credit reporting agencies and they may not show up on your credit report, they can still cause major issues with title work when purchasing a Myrtle Beach home. In this recent situation the buyer had outstanding medical bills from 2008 that had not be resolved here in South Carolina. She was a single mom that had gotten divorced, moved back to Wisconsin and had filed a bankruptcy there many years ago. Everything on her credit was discharged off in the bankruptcy and the buyer was off to starting a new life and rebuilding her credit score.

Fast forward from 2008 to present day and all of a sudden this issue shows up in a title search. When the credit report was done by the lender, it came back with not issues and so everything was on track for closing until the attorney got the title work back. When they did, this medical expense showed up as a lien against the buyer. Because this lien was there, the moment the deed would have transferred hands, there would have been an issue with the new title on the home. This issue had to be resolved before the buyer could take possession of the property.

In this situation, luckily the amount owed was under $1,000 and was able to be resolved within just a few days and cleared up. If it had been a higher amount, it could have easily taken 6-8 more weeks to get handled. With the way our current Myrtle Beach real estate market is, I honestly would have advised my seller to cancel the contract with this buyer and place their home back on the market. When we originally placed the home on the market, we had an offer within the first 7 days and I was fairly confident we could do that again.

Ultimately the buyer would have lost the home over something as mundane as a ten year old medical bill that was under $1,000. Luckily for her sake, she was able to get the title issue resolved quickly and we were able to close on the home just a few days later than we hoped, but still within the contractual timeline.

In closing, while you may no longer see those medical bills on your credit report and they may not affect your score anymore, it is still extremely important to get these issues handled and resolved so that when you get to purchase a home these things do not delay the purchasing process or cause you to lose that home you fell in love with. If you would like to learn more about this issue, feel free to reach out to me. You can either send me an email through my contact page or simply call/text me at 843-222-9402.

photo by: aronbaker2

Jan 03 2017

Owning A Home To Build Wealth

I just finished reading thought provoking article on CNBC where they did an interview of self made millionaire David Bach on how to build wealth. In this article, he states that for a millennial to start building wealth for their future, they need to invest in real estate.

Watch the video below of an interview with millionaire David Bach where he discusses the best way to generate wealth.

Money Trap or Wise Investment?

He states that the average homeowner is 38 times wealthier than a renter which makes complete sense to me. Just think, if you rent a home in Myrtle Beach for the next 30 years at simply a rental rate of $1,300, and the market does not increase during that time, you will have thrown away $468,000 on rent in which you have not accumulated a penny of equity. On the other hand if you were to purchase a home and take the next 30 years to pay off the mortgage, you would have own your home free and clear and have all that equity wealth.

Take a look at the mortgage calculations below:

While yes, you are paying a bunch of interest over the life of your loan, you are still going to save an additional $42,467 in what you would pay in rent. Meanwhile, during the 30 years that you are paying off the loan, your home should continue to increase in price. Historically, home values had seen a steady incline (other than the bursted bubble of 2006-2012) in prices. At the end of the same time period you will have $250,000+ in equity save into your portfolio as well as saving the difference between renting vs owning.

You Gotta Live

Unless you plan on living the rest of your life in your vehicle, you have to live somewhere. The question is, are you planning on spending those years paying rent and throwing away money, or are you planning on spending that time investing into your future by paying on a mortgage and increasing your wealth by owning the property. At the end of the day, you still gotta live somewhere, you should at least try to have something of value at the end of the time.

What I would suggest doing is talking with a real estate professional to at least find out some details on what type of costs you can incur by owning a home. Learn about what types of closing costs you can expect and start to save up ahead of time for them. Ask the lender what you can expect your monthly payments will be and that will give you a good idea of what you can afford. Try to keep your mortgage payment within 30% of your take-home pay.

Be Prepared To Sacrifice

Just because a lender says you can afford the home doesn’t always mean you really can. The lender doesn’t always know how you like to live life. They don’t know that you like to take the family every year on a week long vacation to Disneyworld and that it normally costs you around $4,500 to do so. The lender also doesn’t know that you like to go out to eat once a week and take your spouse out on a date once a week for another $500. They only look at an equation to see if you can fit in, but doesn’t take any variables in like this. In short, you might need to sacrifice.

For a while you might need to do dates in, and family movie nights with a Redbox instead of trips to the movie theater to save up money. You might need to skip this year’s family vacation to Disney and instead do a staycation to allow you to save up enough money for a down payment. Bach suggests and I agree to at least try and save up 10% for a down payment. This way you own your home with a little equity to start and do not have to fret if the market slows down, or dips downward for a year or two. Also, if you can swing 20% down, you can then save of primary mortgage insurance which can be a hefty expense each month.

Reap The Rewards

At the end of the day, while buying a home can be a major expense, it can also be a major reward. Just like Bach stated, “The fact is, you aren’t really in the game of building wealth until you own some real estate.” If you are like my brother-in-law who recently bought a home in Portland Oregon and didn’t do it to make money, or you are making improvements not because you want to increase the value of your home, you are ultimately making a wise investment into your overall wealth by owning your home.

Contact me to learn more on the benefits of owning a home.

Dec 12 2016

Does It Cost More To Use A REALTOR® To Buy A Myrtle Beach Home?

Today I want to share a story of something that recently happened to me with some of my good friends. Now, before I begin, this is not a story about me complaining about losing money, but more so a story I share to try & help others who are looking to buy a home in Myrtle Beach, SC or basically anywhere else in South Carolina. I cannot speak that this is the same case for anywhere else in the country as I am only licensed for this state.

About two years ago, one of my good friends came to me & stated that he & his wife were thinking about buying a home and putting down some roots here in Myrtle Beach. We began the process of looking at homes online, emailing back and forth questions about the properties and even taking a few trips out to view some of the properties. In fact, we found a property that we loved and wrote up an offer at that time. Unfortunately, that offer didn’t work out and so we went back to searching for more homes. We had found another home, but they required us to show a pre-approval before submitting an offer. So, we called one of my local lenders and he began the process of obtaining a mortgage.

As we began the mortgage process, we quickly learned that some items that had been on his credit needed to be taken care of before he could go about trying to buy a home. We got connected up with a credit service to assist him in the process of repairing his credit to a good standing. The service told me it could take a good 6-9 months to get everything handled and get them in a position to be able to buy a house. I left our buyers agency agreement expire and continued to keep in touch with them over the next 2 years answering questions they had & helping with whatever I could.

Fast forward to this past week when I saw my friends again and he mentioned to me that he had found a house. I told him that was great and to let me know when they wanted to go and see the home. He said “No, we already have a house under contract.” My heart sunk as I asked who did he contact to do so. He explained to me that they represented themself as customers to purchase a home because they didn’t want to have to pay more for the house if I represented them.

A “friend” of theirs had told them that if they used an agent to buy a home, it would cost them an additional $7,000+ that gets used to pay the agent. I’m not really sure where they got that information, but it’s the main reason they never called me this time to buy a house. They thought it would cost them much more money to do so. When in actuality, they probably lost more money by not having an agent work on their behalf that would do a full market analysis and negotiate on their behalf with the selling agent. We do this stuff every day and know what the laws are.

Below I’ve placed a portion of the South Carolina Buyer Agency Contract that goes through how an agent get paid.

As you can see, while there are several options out there where you might have to pay an agent, there are also options that gets an agent working on your behalf without you having to pay. I could work with people buying a home in Myrtle Beach on a retainer fee. In this situation, you pay an agent a non refundable amount of money that they will or will not credit against a brokerage fee at the time of closing depending on what the agent decides. This money you pay whether you buy a home or don’t.

The second option would be to hire an agent on a Service fee. In this instance, you pay a predetermined amount of money to the agency on a specific date whether you have found a home or not. You can still end up having the agent collect a brokerage fee at a later time, but that service fee comes out of your pocket on a specific date determined by the agent when buying a home no matter what else happens.

The third & fourth options are the ways that most agents here in Horry County run their businesses. In option 3, the agent gets paid out of the brokerage fee. When someone lists their home for sale, they have agreed to allow the listing agent to give a portion of the commission to the agent that brings the buyer to the property. The buyers do not pay out of their pocket to have an agent work on their behalf in the buying process and the buyers agent gets paid by the seller.

The only exception to the rule is when the buyer purchases a For Sale By Owner and the seller will not pay the agent a commission for assisting with the sale. In this situation, you the buyer would be responsible for payment to the agent. But the amount of times this happens is virtually never. I’ve been in this business now for over 15 years and never once ran into this situation. Usually the sellers are willing to work with an agent if they can get their home sold. Option D, Brokerage Fee works almost exactly the same.

So as you can see, the cost to have a REALTOR® assist you in buying a home in Myrtle Beach is zero. It doesn’t cost any more to have someone represent you and help you through the process. I highly recommend that wherever you are buying a property, you get an agent to work on your behalf. We do this every day and have much more experience handling all the things that come up in the buying process. It will definitely save you time, money, and headaches having a REALTOR® represent you when buying a home.

May 15 2015

5 Items An Underwriter Will Look At To Determine Loan Approval

As a local Myrtle Beach REALTOR®, one of the questions I get asked the most is what do I need to get a mortgage. People want to know what the bank looks at to determine if they can or cannot get a loan.

Below is a great explanation by Erica Davis, a Sr. Loan Officer with Guild Mortgage here in Myrtle Beach. She explains exactly what an underwriter looks at to determine if someone will get a loan approval or not.

To review, the five main things an underwriter reviews is:

Cash Flow
Credit Score
Job Stability
Assets
Property

I hope this helps many of you who might have had this question regarding getting a loan to buy a home here in Myrtle Beach. If you have more questions about Myrtle Beach real estate, feel free to contact me. If you still have questions about getting a mortgage, I would highly recommend reaching out to Erica. She would be more than happy to help you in securing a loan to purchase a home. Her contact information is below.