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

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.

May 07 2015

5 Upgrades That Add Value When Buying A New Myrtle Beach Home

New home construction communities across the Myrtle Beach area have continued to become more customizable with their homes over the past few years. Many of the top national builders that are in Myrtle Beach now have “design centers” where you can visit and make your selections while viewing the different samples. You now customize almost any aspect of your new home. It is important though that when making these choices that you do not let things get out of hand.

When building a new home you have a budget in mind before hand. As you enter the design center to select options & upgrades, that budget sometimes goes out the window. I refer to the visit to the design center as “a kid in the candy shop” mentality. Everything looks wonderful and you want one of each. However, you can easily more than double the price of your home with upgrades and also destroy your budget.

Recently, while working with a buyer, she had over $150,000 in upgrades & additions onto the home. She was easily making her new home the “king of the hill” in the neighborhood. However in her situation, she did not care. She is planning on living there for many years and wanted what she wanted. Also, her budget was much higher than what she actually spent on the home.

Below are the top 5 things I would suggest upgrading when building a new home in Myrtle Beach. This list comes from dealing with hundreds of buyers locally and listening to their wants & desires when purchasing a new home. These are the top 5 things I feel can bring the greatest value and return on investment.

Upgrade the range hood to a microwave. When buying a home, most people want a microwave in their home. If not, you would need to purchase one for the counter in which you spend more money, and lose counter space! Or, if you decide to do it later, you have a useless range hood that will inevitably end up collecting dust in the garage, or for sale at a neighborhood yard sale.
Upgrade the range from coil top to a smooth top range. The cleaning of the coil tops are difficult and make a mess. You also have to buy new drip pans almost annually because the old ones have become so discolored and dirty. With a smooth top range, you can buy Ceramabryte and keep your range top looking like new all the time.
Upgrade your carpet padding & actual carpet. I always suggest paying the little bit extra for the highest grade padding available. Also, I recommend upgrading your carpet at least one level. The reason for upgrading the padding is that by doing so it will help the life of your carpet. Also, it will make it easier on your feet while walking around your home. The reason for upgrading the actual carpet is to increase its life. Also, normally the higher grade carpet have less amounts of carpet fibers being released. When I purchased my most recent home, I was not given the option of upgrading the carpet and every time I vacuum my home, I fill
my Dyson vacuum with carpet fibers at least twice.
Upgrade the paint on whole house. If you do not like plain white walls and want continuity in your paint in your home, then pay for the whole house paint upgrade up front. Normally the cost of upgrade is only a few hundred dollars instead of paying a painter afterwards a few thousand dollars to have it done. Most builders will only allow you to pick one color for the whole home, so if you wish to have a lot of customization in your paint colors in every room, then this may not be for you.
Upgrade the front exterior of your home. Curb appeal is one of the most important things about a home. Most builders allow you to customize the curb appeal of your home by choosing a brick or stucco front. This is something that will make your home stand out from the other same models of your home in a community.

Be on the lookout for future updates where I will discuss options to avoid. These will be the upgrades that either cost more than they are worth, or will never bring back the return that you invest for them.

If you are thinking of moving to Myrtle Beach and would like help with buying a new home, feel free to contact me. I’d love to help.

Oct 22 2014

Understanding Buyer’s Agency in South Carolina

Buying a home is one of the most important financial decisions you will ever make in your life. With the the increase of buyers in the Myrtle Beach real estate market, I have seen more first time home buyers searching for property. With that said, I wanted to take a moment to explain South Carolina agency and Buyer’s agency.

The overall concept of agency is basically the same for almost all states. However there may be a few minor differences. In South Carolina, you have the ability to choose to either be a customer or client.

As a customer you have chosen to represent yourself throughout the transaction. You have the freedom to work with any real estate agent you wish. However, in South Carolina, an agent is only required to do the following for customers:

Present all offers in a timely manner
Account for all money or other property received on your behalf
Provide an explanation of the scope of services to be provided
Be fair and honest and provide accurate information

As the State of South Carolina Agency Disclosure Brochure states: “Unless or until you enter into a written agreement with the Company for agency representation, you are considered a “Customer” of the Company, and the Company will not act as your agent. As a customer, you should not expect the Company or its licensees to promote your best interest, or keep your bargaining information confidential.”

As a Client you will receive more services than customers. To receive the added services you will need to enter into a written buyer agency contract with a Company. Once you sign the agreement, you are a Client of that Company and will receive the following services in addition to those you have as a customer.

Obedience
Loyalty
Disclosure
Accounting
Reasonable care and skill
Advice, counsel, and assistance in negotiations

When it comes to the exclusive buyer agency contract, many become uncomfortable signing a contract that requires them to work exclusively with one agent throughout the transaction. Also, they feel that if they sign the agreement it will cost them more money. This is a common misnomer in real estate. In the buyer agency contract there are four options in section 5 that discuss how the broker will be compensated.

The first is for a flat retainer fee. While there are some agents that will pick this option, it is very uncommon. The second option is to be paid a service fee. Once again, this is not a common practice in the Myrtle Beach area. The third and fourth options are the more common practices in which the broker is compensated a percentage or amount that comes from the transaction.

When a seller agrees to list their home for sale, they agree to pay a certain percentage to the listing agent and the agent who bring the buyer. This amount has already been agreed upon between the listing agent and seller. In this instance, it does not cost the buyer any money to have buyer representation in the purchase of the home. Their agent will be paid by the seller at the time of closing.

Knowing that it does not cost you any more money to have representation, if you were given the choice to be a Client or a Customer which would you choose?

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Sep 25 2014

Importance of Being Pre-Approved To Buy A Myrtle Beach Home

Congratulations on deciding to buy a Myrtle Beach home! What should you do next? This is a question I hear very often when working with new home buyers. Or, the other common version is a phone call requesting to see a property I recently listed for sale and I ask if they have already been pre-approved with a bank already. One of the first questions I ask to buyers that I meet on the phone or in person is if they have spoken to someone at a bank and if they have received some sort of pre-approval or pre-qualification letter.

“But I’ve got great credit, a mortgage won’t be an issue!” Boy, if I had a dollar for each time I’ve heard that line. The other day while I was stuck at the infamous Backgate stoplight in Myrtle Beach, I started a video explaining a conversation I had just finished with a seller on the phone regarding why I don’t normally work with buyers who are not willing to call a bank and get pre-qualified. Watch the video below, and then I’ll share more reasons after the video:

Here are a few other reasons why getting pre-approved can be so helpful: First, if you are selling your property and have it on the market, you want the agents bringing people through your home to be able to afford buying the home they are looking at. I remember when we had a few oceanfront homes for sale in Myrtle Beach on the Golden Mile a few years back that we would receive a constant stream of calls wanting to view the property. What we quickly found out was that many of the people calling to view the home could not afford to purchase, but were just nosey to see what an oceanfront home in Myrtle Beach might look like. When showing homes to unqualified buyers, it also increases the level of liability to the agents and also the seller if someone or something were to get broken, lost, or injured.

Set the correct expectations. I started to mention this briefly in the video, but it is very important to set the correct level of expectations for your buyer. If you start showing them homes for sale over $300,000 and they can only get approved for $120,000, the buyers will be disappointed with everything they see after viewing the more expensive homes to start. They have already seen the best out there and homes that are half the price will never be able to compare in features, size, age, amenities, and just about everything else. If you set those expectations accurately in the beginning, and stick to only showing properties the buyer can afford, you never run into this issue.

Save your time & stop judging the book by it’s cover. I’ll never forget about 8 years ago when I was working with a couple that had walked into our office one rainy afternoon. They drove up in a new BMW 7 Series dressed up all fancy with gold and bling everywhere. The gentleman told me when he came in the door that they had come in town to invest a million dollars in properties in the Myrtle Beach area. I immediately started pulling up dozens of properties on the MLS for them to look at and get the process started. My father on the other hand, interjected and said that we needed to call the bank first to get pre-approved to purchase this much real estate. We called in, spoke with the lender and within 10 minutes we came to find out that the gentleman was in debt up to his eyeballs, had liens against his current home, and was also currently involved in a lawsuit. Unfortunately, he couldn’t buy a ten thousand dollar unit, let alone a million dollars worth of real estate. That ten minute call saved me weeks of work, frustration, and all types of headaches.

So as you can see, while getting a pre-approval when working with an agent is more work before you get to see homes, in the long run it is a major saver on grief, time and heartaches. It also shows your agent that you are serious about buying a home in Myrtle Beach. If you want more information on how to go about getting pre-qualified for a mortgage, feel free to contact me for more assistance.

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Aug 25 2014

How Much Earnest Money Do I Need To Buy A Myrtle Beach Home

One of the questions that arises on a regular basis when helping someone buy a Myrtle Beach home has to do with earnest money. First, what is earnest money? Wikipedia gives a wonderful definition of the term here. Basically, it is the deposit made towards the purchase of real estate and is part of your down payment. In South Carolina, this money is held in a trust account of a real estate company or closing attorney. It cannot be used by the real estate company for any other purpose.

So, here is the big question that normally comes up in regards to earnest money is How much should I give for earnest money? People are looking for some sort of formula to calculate out how much is needed. Unfortunately, there is no exact formula to determine how much for your offer. Some use the 1% of purchase price principal, but that does not always work. For example, if you are buying an $75,000 condo, you may want to offer more than 1% or $750.00. In this scenario you may wish to offer $1,000.00. On the other hand, it could be some sort of offer where you are limited on money for down payment at the time of making the offer and only have $500.00. This amount is something that can be negotiated just like any other part of the offer.

The key concept behind earnest money is that it is the money you use as part of a down payment and is given at the time of presenting the offer to show good faith or earnest in a property. The more that you put down shows a higher level of genuine interest. You do not want to put too much money down because you do run the risk of possibly losing that money. However not enough can offend a seller. Here is an example.

A few years ago we had a gentleman in town that wanted to purchase a 22 unit motel that was for sale for $660,000. The gentleman made a fairly reasonable offer on the property and wanted to close in a rather short time of just over 30 days. He was supposed to pay cash for the deal. So, when we asked how much he wanted to put down as earnest money, he stated that he didn’t have the money at this time, but it was “coming soon.” He never would tell us where he was getting the money or could provide us with proof of funds. So we asked once again, how much would you like to use as earnest money.

The gentleman reached into his pocket and pulled out a dollar bill and slammed it down on the desk and said: “Here is my earnest money. And I am not putting another penny down!” A single dollar, that was his earnest money. Needless to say when we presented the offer to the seller, they were not amused by this offer. In fact, they were so annoyed that they flat out declined the gentleman’s offer.

This is a prime example where not enough earnest money caused a seller to not even want to negotiate with a buyer. The reason the seller was so offended is that if the gentleman changed his mind about purchasing and walked away from the deal, the seller would only receive $1.00 for incurring all types of expenses for various tests, inspections, attorney fees, etc, all while taking their property off the market during that time.

Hopefully this clears up the issue of earnest money a little bit. In closing, I leave you with this piece of advice in regards to earnest money. Each and every market all around the US is very different in regards to how much is enough/not enough. I would strongly urge you to ask a local REALTOR® for guidance when determining how much to give.

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