CHARLESTON, SC

HOME SELLER’S GUIDE

We are experts in the local market and will guide you through the entire process of selling your property from listing to sale.  Our marketing plans assure your property maximum exposure and we pride ourselves on personal service. Below are some commonly asked questions related to selling a home. We encourage you to contact our office with your questions and to discuss your individual needs.

Appraisals & Market Value

What is the difference between market value and appraised value?

Really, your home’s market value is what a ready, willing and able buyer is willing to pay at any given time. You should, however, have some idea of your home’s worth before listing it. There are two main ways to determine this. The first is to have a certified appraiser do an appraisal which most lenders require as part of the lending package. This usually runs about $300-$400. On the other hand, most Realtors or brokers will do a comparative market analysis as part of his/her services. This is a more informal estimate of value and it compares your house to the sales of comparable homes in your area.

What’s a house worth?

A home ultimately is worth what someone will pay for it. Everything else is an estimate of value. To determine a property’s value, most people turn to either an appraisal or a comparative market analysis. An appraisal is a certified appraiser’s estimate of the value of a home at a given point in time. Appraisers consider square footage, construction quality, design, floor plan, neighborhood and availability of transportation, shopping and schools. Appraisers also take lot size, topography, view and landscaping into account. Most appraisals cost about $300. A comparative market analysis is a real estate broker’s or agent’s informal estimate of a home’s market value, based on sales of comparable homes in a neighborhood. Most agents will give you a comparative market analysis for free. You can do your own cost comparison by looking up recent sales of comparable properties in public records. These records are available at local recorder or assessor offices, through private real estate information companies or on the Internet.

How is a home’s value determined?

There are two primary methods to estimate the value of your home. First, there is an appraisal which is a professional estimate of your home’s market value which is based on age, square footage, construction quality and design in comparison with the sales price of other homes in your home’s proximity. The usual price for an appraisal runs about $300-$400. An alternative approach is more informal and less costly. A real estate agent or a broker can provide a free valuation your home which is called a comparative market analysis. Similar to an appraisal, this analysis compares your home to recent home sales in the neighborhood to establish an estimate of value.

What standards do appraisers use to estimate value?

Appraisers use numerous elements to determine your homes value. Some of these factors include the home’s size and age, the quality of construction and design, the desirability of the neighborhood, current market conditions, and comparable home sales in the neighborhood.

Common Questions

Should I add on or buy a bigger home?

There are several things to consider when trying to decide whether to add on to an existing home or to purchase a larger house. After deciding square footage and room requirements, you should see if there are affordable homes that would satisfy your needs and, thus, avoid the headaches of renovation. If there aren’t, or you really love where you live, you might want to look into how much equity you have in your current home and investigate if you can get a home improvement loan. Before doing any building, however, make sure that local zoning and building ordinances will allow you to remodel and add the square footage that you are looking for.

How long do bankruptcies and foreclosures stay on a credit report?

Bankruptcies and foreclosures can stay on a credit report for 7 to 10 years. It is possible, however, for some lenders to extend a loan sooner than this time period if the person has reestablished good credit. There are a variety of different mortgage options available, with varying eligibility requirements. If you’re one of the many homeowners who lost their homes and good credit to the housing bust, the best thing you can do is educate yourself about the various mortgages and the mandatory waiting periods associated with them. Finally, take the necessary  steps to reestablish your good credit as quickly as possible. Remember that credit score, home price, and down payment will all affect your interest rate.

What are some tips on negotiation?

It’s a given that sellers want the highest price possible for their home and buyers want the best deal, but it’s still important for both to realize that the primary objective is to agree on a price and terms. Sellers should be aware that in a buyer’s market those looking for a house have multiple options and so should negotiate more carefully. On the other hand if a seller is lucky enough to list in a seller’s market, he/she cane more insistent about the deal’s particulars.

Do sellers have to disclose the terms of other offers?

Sellers are not legally obligated to disclose the terms of other offers to prospective buyers.

How do I prepare the house for sale?

There are some basic things sellers should assure are in good working order or cosmetically correct. These are roofs, HVAC, windows, paint, and carpets or flooring, especially in a buyer’s market where there is a lot of competition. Many sellers want to “fix up” things that buyers will either not notice or not care about. This is where a competent and knowledgeable real estate agent’s advice can be invaluable. There are, however, instances where selling a house “as is” is reasonable. A good example might be selling a house on the beach that is below current flood levels: in this instance the value of the home lies in the land and any repairs done to the property might not be recovered at the selling time.

Disclosure

Whose obligation is it to disclose pertinent information about a property?

In S.C., it is the seller’s obligation to disclose all facts materially affecting the value or desirability of your property which are known or assessable only to you. This is done by filling out a Seller’s Disclosure form and is a requirement for listing a house. These facts include any work done on and the condition of the roof, HVAC systems, plumbing, foundation, etc., as well as homeowners association dues, whether or not work done on the house meets local building codes and permit requirements, any restriction on the use of the property, such as zoning ordinances or association rules, any death within 3 years on the property, and the presence of any neighborhood nuisances or noises which a prospective buyer might not notice.

What are the standard contingencies?

Almost all purchase offers include two primary contingencies. The first is a financing contingency and this would protect the buyer should he/she not be able to get financing after seriously trying to do so. This is typical but is by no means required and a buyer who did not include a financing contingency would have a stronger position than someone who did and might even be able to get a better price when negotiating. The second common contingency is the home inspection. If a home inspection uncovered serious defects in a house and the seller refused to repair them, the buyer could back out of the contract and would be due their earnest money.

Do I need an attorney when I buy a house?

South Carolina law states that the conducting of a real estate closing is the practice of law and therefor only an attorney can do so. You should ask your Realestate agent or broker to give you a list of names and contact these attorneys to determine experience handling real estate transactions and the fees.

What repairs should the seller make?

There are some basic things sellers should assure are in good working order or cosmetically correct. These are roofs, HVAC, windows, paint, and carpets or flooring, especially in a buyer’s market where there is a lot of competition. Many sellers want to “fix up” things that buyers will either not notice or not care about. This is where a competent and knowledgeable real estate agent’s advice can be invaluable. There are, however, instances where selling a house “as is” is reasonable. A good example might be selling a house on the beach that is below current flood levels: in this instance the value of the home lies in the land and any repairs done to the property might not be recovered at the selling time.

Do sellers have to disclose the terms of other offers?

Sellers are not legally obligated to disclose the terms of other offers to prospective buyers.

Will a neighbor problem reduce the value of my property?

An eyesore next door can definitely reduce the value of your property especially if there are numerous houses in the neighbor that are in need of repair. Beware of buying in a neighborhood that appears neglected, even if your property is in tip top shape because you might loose money when it comes time to sell. Many neighborhoods have HOA’s now and if you check for that you can be more assured that your neighborhood will remain well cared for.

How do I get the real scoop on homes I am looking at?

This is where an experienced agent will help. He or she should have a list of reliable home inspectors who should be able to alert you to any problems in the home. In SC all sellers are required to fill out a Sellers Disclosure Form that will give you the age and condition of all the major appliances, as well as the roof , the HVAC systems, windows, interior walls and insulation, foundations, etc. If there is a HOA, you should be able to find out about possible amenities as well any potential encroachments.

Negotiating

Is there a secret to good negotiating?

Again, here is where having an experienced and resourceful agent is vital. Your agent is the one who is doing the negotiating for you and you should be able to rely on his or her skills and professionalism. A home is personal to many people and many deals fail because a seller takes a low ball offer personally. Remember that a too tough of a negotiating stance can cause the buyer to dig in and become inflexible. Any knowledge about your buyer’s motivation is helpful. When trying to sell your home in a buyer’s market, flexibility is the key. At any rate, try to respond to any and all offers in a timely manner and expect the same in return.

What contingencies should be put in an offer?

There are two standard contingencies that appear in most contracts. The first is a financing contingency that means the sale is dependent upon the buyer being able to get financing from a lender. While most offers have a financing contingency, it is not mandatory and if a buyer were to put in an offer that wasn’t contingent upon financing, he/she might be able to get a better price because of it. This is especially true in a seller’s market where competition might be fierce. The second standard contingency is an inspection contingency in which a buyer has a professional inspection done. This often generates a second round of negotiations, depending on the nature and severity of the problems found. These contingencies usually allow a buyer to back out of a contract without loosing the earnest money, but it’s the buyers who must be certain that these contingencies are spelled out in the initial contract. The offer to buy must also include the seller’s responsibilities like passing clear title and making any agreed upon repairs to the property.

How is the price set?

Your price should be set after your homework is done. Your agent should be able to give you a current market analysis that includes your home in comparison to other sales prices in proximity to your property. Again this is where a knowledgeable agent is a necessity. Some agents might give you a lower price so that your home would be easy to sell while others might give you an inflated one in order to get the listing. If the agents idea of a good price is widely different than what you were expecting, you might want to get another agent’s opinion or get an appraisal done.

Are low-ball offers advisable?

A low-ball offer, or one that is qualitatively different than the asking price can often backfire and sometimes causes the seller to discontinue negotiating altogether. You and your agent should be familiar with comparable sales and offer accordingly. This doesn’t, however, mean that a low offer can’t be attractive with other scenarios:  a speedy closing or no financing contingencies might be attractive to a seller who is moving for example. Any knowledge that you can obtain about a seller’s motivation is often helpful with negotiating a price.

Do I have to consider contingencies?

A lot depends on the price you are hoping for and the condition of your property. If you are lucky enough to be selling in a seller’s market, the number and type of contingencies you will have to consider are fewer. If, however, you are selling in a buyer’s market, you most likely will have to be more flexible about what you’re willing to negotiate. Most houses are sold with at least a financing and inspection contingency. Don’t misunderstand contingencies: they are written into the contract and are only negotiable during the negotiation phase and not after you have a ratified contract unless both parties agree to the changes.

What is the difference between market value and appraised value?

Really, your home’s market value is what a ready, willing and able buyer is willing to pay at any given time. You should, however, have some idea of your home’s worth before listing it. There are two main ways to determine this. The first is to have a certified appraiser do an appraisal which most lenders require as part of the lending package. This usually runs about $300-$400. On the other hand, most Realtors or brokers will do a comparative market analysis as part of his/her services. This is a more informal estimate of value and it compares your house to the sales of comparable homes in your area.

What is the best time to sell your house?

 Selling a house depends on supply, demand and other economic factors. With that said the time it takes to sell your house and the final price can be affected by when you put your house on the market. Charleston is a beach time, and the spring and summer markets are the strongest with a slowdown in the fall before the holidays arrive. Given that, the more houses on the market, the more competition you will have unless you are lucky enough to be selling in a seller’s market. Even though it is slower in the late fall and during the winter, your house can’t sell if it’s not available, so you may want to put in on the market when there is less competition and see what happens. An experienced agent can help you make the decision.

Pricing the House to Sell

What is the difference between list and sales prices?

The list price is how much a house is advertised for and is usually only an estimate of what a seller would like to get for the property. The sales price is the amount a property actually sells for. It may be the same as the listing price, or higher or lower, depending on how accurately the property was originally priced and on market conditions. If you are a seller, you may need to adjust the listing price if there have been no offers within the first few months of the property’s listing period.

What are the two most important factors when selling a home?

The list price and the condition of the property are paramount to selling a home especially when in a highly competitive market. Using the comparative market analysis that your broker or agent provides for you and/or an appraisal, make sure that you price your home to be competitive. Then make sure that you house shows well and repair anything that would hurt the appearance of your home. In a highly competitive market, you may have to do further repairs or maintenance like painting or repairing a roof in order to make your house attractive to buyers.

What is the best time to buy?

This depends on whether you’re looking for a denser selection or a better price. The market is stronger in the spring and stays so until late fall when the holidays arrive. There will be more choices to look at whenthe market is strong, but there will also be more competition among buyers. If you’re looking for a better price, looking during the holidays and the winter might be a better option for you.

What is the difference between market value and appraised value?

Really, your home’s market value is what a ready, willing and able buyer is willing to pay at any given time. You should, however, have some idea of your home’s worth before listing it. There are two main ways to determine this. The first is to have a certified appraiser do an appraisal which most lenders require as part of the lending package. This usually runs about $300-$400. On the other hand, most Realtors or brokers will do a comparative market analysis as part of his/her services. This is a more informal estimate of value and it compares your home with the sales price of similar homes in your area.

What is the difference between list price, sales price and appraised value?

The list price is the price that the seller has chosen and is what the house is being marketed as; this price is the one that the seller hopes to get for the house. The sales price is the price that a buyer is willing to pay for the home. This might be the same price as the list price or it could be higher or lower. The appraised price is the price that a certified appraiser gives to a property and it is based on comparable actual sales on properties in the neighborhood as well as the condition of the property.

How does someone sell a slow mover?

The first thing that you should consider if you have a property that isn’t moving is the price. You might want to lower the price and see if you get more activity. If you think that the house is priced fairly, you might want to reevaluate the condition of the house; go through it and see if there are cosmetic repairs that can be implemented such as painting, refinishing floors, etc. The other thing that you should examine is whether the house is being marketed properly. Is your agent doing open houses, caravans, and has good internet exposure? After all those things are done to your satisfaction, you may consider taking the house off of the market for awhile and giving it a fresh exposure at a later date. Even in a down market, real estate experts say that price and condition are the two most important factors in selling a home. If you are selling in a slow market, your first step would be to lower your price. Also, go through the house and see if there are cosmetic defects that you missed and can be repaired. Secondly, you need to make sure that the home is getting the exposure it deserves through open houses, broker open houses, advertising, good signage, and listings on the local multiple listing service (MLS) and on the Internet. Another option is to pull your house off the market and wait for the market to improve. Finally, if you have no equity in the house, and are forced to sell because of a divorce or financial considerations, you could discuss a short sale or a deed-in-lieu-of- foreclosure with your lender. A short sale is when the seller finds a buyer for a price that is below the mortgage amount and negotiates the difference with the lender. In a deed-in-lieu-of-foreclosure situation, the lender agrees to take the house back without instituting foreclosure proceedings. The latter are radical options. Your simplest, and in many cases most effective, option is to lower the price.

How is the price set?

Your agent should prepare a comparative market analysis for you in which he/she provides similar properties that have sold recently (generally the sales shouldn’t be older than 4 months). This way, you can base your home’s list price on the current market conditions. It’s a good idea to get more than one agent’s analysis so that you have several figures to compare before making your decision. Be careful about agent’s whose numbers are significantly higher than the others. This is often done to sway a seller and it will just cause problems later when your house sits on the market because it is over priced. If you are unsure about the suggested price, you can always get and appraisal done which is a certified professional’s opinion of your homes value.

What are the standard ways of finding out how much a home is worth?

There are two main methods to find a home’s value and you can perform one or both of them. The first is a comparative market analysis which is done by your realtor or broker. This is generally done as part of the agents proposal and it is an informal evaluation of your property based on current sales prices of homes in your neighborhood. The second method is to have a certified appraiser do an appraisal of your home which also takes into account the recent home sales but also compares your home to others that have sold in terms of size, quality and design of construction, age, etc.  Appraisals generally run $300-400.

How do you prepare a house to sell?

In order for your house to sell quickly and at the price you are looking for, you should make sure that your home shows as well as possible. Aside from expensive repairs, your home needs to look like it has been cared for. It needs to be clean, both inside and out. A fresh coat of paint is never a bad idea but definitely fix any minor repairs (little things wrong often make buyers wonder about the possible big defects). Organize closets and garages so that it doesn’t look cluttered.

Where do I get information on housing market stats?

An experienced and competent real estate agent should be able to provide good information on the housing market. Generally, the state’s association of Realtors will also be a good source of information about the local housing market. Finally, do a search on the internet about your local market. There are numerous publications both locally, statewide, and nationally that can guide you.

Is a low offer a good idea?

While your low offer in a normal market might be rejected immediately, in a buyer’s market a motivated seller will either accept or make a counteroffer. Full-price offers or above are more likely to be accepted by the seller. But there are other considerations involved:
* Is the offer contingent upon anything, such as the sale of the buyer’s current house? If so, a low offer, even at full price, may not be as attractive as an offer without that condition.
* Is the offer made on the house as is, or does the buyer want the seller to make some repairs or lower the price instead?
* Is the offer all cash, meaning the buyer has waived the financing contingency? If so, then an offer at less than the asking price may be more attractive to the seller than a full-price offer with a financing contingency.

Property Taxes

Where can I learn more about appealing my property taxes?

Contact your local tax assessor’s office to see what procedures to follow to appeal your property tax assessment. You may be able to appeal your assessment informally.  Most likely, however, you will have to go through a formal tax-appeal processes, which begins with an appeal filed with the appropriate assessment appeals board.

How is a home’s value determined?

There are two primary methods to estimate the value of your home. First, there is an appraisal which is a professional estimate of your home’s market value which is based on age, square footage, construction quality and design in comparison with the sales price of other homes in your home’s proximity. The usual price for an appraisal runs about $300-$400. An alternative approach is more informal and less costly. A real estate agent or a broker can provide a free valuation your home which is called a comparative market analysis. Similar to an appraisal, this analysis compares your home to recent home sales in the neighborhood to establish an estimate of value.

Are taxes on second homes deductible?

Mortgage interest and property taxes are deductible on a second home if you itemize. Check with your accountant or tax adviser for specifics.

How do property taxes work?

Property taxes are assessed in order to pay for county and local public services and are calculated in a variety of ways. In the Charleston area, there are two basic rates for homeowners. There is a 4% tax rate for primary homes (those that you live in and claim as your primary residence.) For vacation homes or rental property, the county uses a 6% tax rate. If you buy a home in Charleston that is on a 6% rate, and you plan to live in it as your primary residence, you will need to apply for the 4% rate at the time you purchase the home in order to avoid the higher tax rate.

Are property taxes deductible?

Property taxes on all real estate, including those levied by state and local governments and school districts, are fully deductible against current income taxes.

What is an impound account?

An impound account is a trust account created by the lender that holds money to pay for real estate taxes, was well as mortgage and homeowners insurance premiums.

Seller Financing

What is seller financing?

Seller financing is when a Seller, rather than a mortgage lender, helps to finance a real estate transaction by either taking back a second note or financing the entire purchase price if the seller has no mortgage on the property. This is often done when the Buyer has difficulty getting regular financing through a lender. A word of caution, however, a seller must should be very comfortable with the buyer’s ability to make regular payments. In this instance, the seller will extend a line of credit to the Buyer in the form of regular payments and will keep title to the property until the house is paid in full. The Buyer will execute a promissory note and trust deed to the seller. When the terms of the sale are worked out, then the paperwork is prepared by the title or escrow company. While Seller financing is not used very often, it can be attractive to some sellers because they can often ask more for the property and can charge interest on the note just like a conventional lender does.

How are the rates set for seller financing?

The interest rate on an owner-carried loan is negotiable. Ask your agent to check with a lender or mortgage broker to determine the current rate on institutional first (or second) loans. Seller financing typically costs less than conventional financing because sellers don’t charge loan fees (points). Interest rates on an owner-carried loan will also be influenced by current Treasury bill and certificate of deposit rates. Sellers usually aren’t willing to carry a loan for a lower return than they would earn if their money was invested elsewhere.

What are the benefits of seller financing?

There are benefits to both buyer and seller with this typed of financing. For the buyer who doesn’t qualify for conventional lender through a mortgage company, this is a way to be able to buy a house and begin building equity. The seller is the one who is taking risks and, therefore,  should make sure that the borrower is a good credit risk and should make sure that the property is well insured. Because the seller is offering the buyer a means to be able to buy a home, he/she can often charge more for the home than a conventional buyer would be willing to pay. If the seller charges a good interest on the loan, he/she can often make more money in the long run than elsewhere in the market. It’s a smart move on both sides to have an attorney draw up the contracts.

Selling at a Loss

Can a home seller sell a home for less than its mortgage?

It is possible for you to sell your home for less than what you owe on the mortgage, a process known as a “short sale.” It is not an easy process and not all lenders will allow it, but if yours does, the lender generally will split the difference between the sale price and the original loan amount; the original loan amount still must be paid however.

When does foreclosure begin?

Lenders will begin the foreclosure process when borrowers have become delinquent in their mortgage payments; this generally begins after three payments are missed. The lender has to notify the borrower in writing that he/she is in default. After this is done, the lender can sell the property at public auction, a process known as a judicial foreclosure. There is a grace period after a borrower is notified of being in default where he/she can catch up the late payments but this generally ends a few days before public auction. In some states, the new owner can take possession immediately, and the borrower is required to vacate immediately or they will be legally evicted. This is a one of the worst things that can damage ones credit history and should be avoided at all costs. Lenders will initiate foreclosure proceedings when borrowers become delinquent in their mortgage obligations, usually after three payments are missed. The lender will then notify the borrower in writing that he or she is in default. The lender can request a trustee’s sale or a judicial foreclosure, in which the property is sold at public auction. A borrower can cure the default by paying the overdue amount and the pending payment after the notice of default is recorded, usually no later than a few days before the property’s sale. Some sales allow the successful bidder to take possession immediately. If the former owner refuses to vacate the premises, the court can issue an unlawful detainer that allows the sheriff to come out and evict them. Borrowers should do everything they can to avoid foreclosure, which is one of the most damaging events that can occur in an individual’s credit history.

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