Charleston, South Carolina is an idyllic city characterized by its southern charm, pleasant weather, diverse architecture and rich cultural history. Since it was first settled in 1670, Charleston remains a cultural hub where people from all over the world come to live and experience the joys the Holy City has to offer.
Those hoping to move to Charleston face a few unique challenges in buying or renting their dream abode in the current seller’s market. While there are a number of spacious Charleston and Mount Pleasant homes for sale, you may want to take a few extra steps to ensure you beat out other buyers and win your ideal property.
Check out these ten tips for buying a house in a seller’s market to set yourself apart from other buyers and get into your dream home.
1. Get Preapproved
Obtaining preapproval for a mortgage loan is essential when buying a home in a seller’s market. The preapproval process looks at your credit history, FICO score, employment history and assets to determine the mortgage amount you can afford. With an approval letter in hand, you can set yourself apart from sellers. A preapproval letter tells them you are a serious buyer and appeases any fears they may have about running into problems during the selling process.
Most preapproval offers are valid for between 60 to 90 days. If you are ready to begin house hunting in Charleston, start seeking preapproval about three months in advance. If you are worried about your credit history, it may be a good idea to seek preapproval six months in advance so you can identify areas for improvement before you start looking at homes.
2. Know What You Want
In a seller’s market, the supply of homes is less than the demand. This creates a situation in which buyers need to know what they want and act quickly when they see it. Narrowing down the characteristics, location, type and price range of your ideal property helps you find homes that meet your criteria so you can make an offer when they become available. It also enables you to avoid getting sidetracked by properties that don’t check all the boxes.
To narrow down your property search, consider the following:
Identify where you want to settle down. Would you like to live in a small beach town or the heart of the city? Do you enjoy bustling nightlife and events or do you enjoy a more laid-back, natural setting? Knowing the location or environment you are looking for can help your agent find you the right property.
Determine what price range you can realistically afford. If you apply for preapproval, you should have an idea of your high-end price point. This helps you and your real estate agent look for homes that are just below your maximum and weed out options that are too expensive.
Define the characteristics you are looking for in a home. Consider elements such as an open floor plan, a spacious front or back yard or beachfront and updated kitchen or bathroom fixtures. Decide which characteristics are deal breakers for you and which you are willing to compromise on.
Decide what type of property you are interested in. Would you enjoy a beach house in Mount Pleasant or a striking historic downtown Charleston rental until you get a feel for the area? Maybe you are looking for a single-family home outside of downtown Charleston or rental property on Folly Beach. Being specific in your search can help you find your dream home more quickly.
3. Work with a Local Real Estate Agent
Working with a local real estate agent significantly increases your chances of finding and buying your ideal home in a seller’s market. New listings in the Charleston area have decreased 48.9% in the last year, making it difficult to find a new home without the help of an agent who is familiar with the area. Charleston-based agents are experts in the local market and know exactly where to look to find the right property.
When choosing an agent, opt for someone who specializes in the type of property you are looking for and who works in your preferred location. The right real estate agent will have a vast network of contacts throughout the area, which allows them to alert you as soon as a desirable property becomes available. They may also have working relationships with the seller’s agent, which can give you a leg up when making an offer.
4. Move Quickly
Make sure you’re clear on what you want before starting your search because, once you find the perfect home, you won’t have time to deliberate about making an offer. The cardinal rule in a seller’s market is to act fast.
If you have done your research, know what you want and are financially prepared, you must move quickly to secure the property when it comes onto the market. While some properties may not sell immediately, they probably won’t be available for long, so it is in your best interest to work with your realtor to schedule a viewing and make an offer as soon as possible.
Despite needing to move quickly, you will still benefit from approaching buying in a seller’s market strategically. It is essential to feel confident in your decision to purchase the property and only make an offer when you are entirely sure it is the one you want.
5. Put in a High Bid
In a buyer’s market, it is standard practice to make a low offer on the asking price to find out if the seller will accept a lower bid. In a seller’s market, the opposite is true. When house hunting in Charleston’s seller’s market, expect to bid more than the asking price to buy your home.
You may have to bid above the list price for Charleston sellers to consider your offer. From October 2020 to October 2021, the median sales price on single family homes in Charleston increased by 11.8%. You should be prepared to bid slightly above the market value of the home to win the property. However, avoid bidding so high that you lose money on the value of your home in the future.
6. Make a Large Down Payment
Like having a preapproval letter, coming to the table with a sizable deposit shows sellers that you are serious and ready to buy their home. A downpayment of at least 20% puts you at an advantage over other buyers who must wait for mortgage approval and slow down the sales of the home. Consider going above and beyond the 20% in a highly competitive seller’s market if possible. The more money you put down, the more enticing your offer is to sellers.
Offering a large down payment also shows the seller that you are financially prepared for the transaction. With preapproval and down payment, the seller can reasonably expect a quick, smooth closing process, which works in your favor. Most sellers want to move quickly through the home-selling process. By coming to the transaction with funds available, you make the transition easier for them, elevating you above other candidates.
7. Be Agreeable to Seller’s Terms
During the homebuying process, you and the seller negotiate on the terms of sale in a purchase agreement. The purchase agreement details the particulars of the real estate transaction. These include:
- Name of the parties involved
- The property to be exchanged
- The sale price
- Property, such as appliances that are included with the purchase
- Financing information
- Appraisal and inspection contingencies
- Closing cost responsibilities
In a typical housing market, the negotiating power is equal between both parties. In a seller’s market, the seller has more leeway to ask for specific terms and back out if you disagree. To obtain your dream home, prepare yourself to compromise on the seller’s terms within reason.
Consider agreeing to pay a larger portion of the closing costs or accepting responsibility for smaller repairs found during the inspection. While it’s helpful to be agreeable to the seller’s terms, do not agree to unreasonable terms for fear of losing out on the home.
8. Be Flexible with the Closing Date
Build flexibility into the bid to sweeten your offer on a dream property in Charleston. In some cases, a seller may want to push the closing date up as quickly as possible. This might be so they can move to a new location, get out from under a financial burden or any number of other circumstances. If you are prepared to close as soon as possible and move into the property, a seller in this situation may go with your offer over other bids.
You may also need to show flexibility by being open to pushing the closing date back much farther than anticipated. Perhaps the seller is waiting to close on a new home, or they are facing a personal situation that requires time to put their affairs in order. If you are amenable to moving the date back 60, 90 or even 120 days, they may appreciate it and accept your bid.
Although waiting this length of time may not be ideal, it is a small price to pay to get into a Charleston home you love.
9. Personalize the Transaction
Buying a home in a seller’s market means you may be just another bid in a pile of offers. With nothing to differentiate you and your offer from the rest, you run the risk of being overlooked.
To personalize your offer, compose a letter to the seller to accompany your offer on the home. A handwritten letter adds a touch of personality, allows the seller to connect with you and your vision for the home and personalizes an otherwise business-like transaction.
Your personal letter should be short, but genuine. Express your thanks for the seller’s consideration of your offer and give a brief hint at why you decided to make an offer on the home. Also, compliment the seller on a desirable characteristic of the property, such as its beautiful landscaping or architecture. Let them know you are looking forward to discovering what to do in Charleston, South Carolina when you move to the area.
10. Go into It with the Right Mindset
When buying in a seller’s market, go into the process with the right mindset. Be realistic about the market. Ask your realtor questions to gain a deeper understanding of how long it may take to find the right property and what the expected price range is. Take the time to prepare before you start your search so you’re ready to move when the time is right.
It is important to prepare yourself for a few disappointments before landing your ideal home. You may view several properties only to have them disappear from the market before you can make an offer. Be open to expanding your search to surrounding areas. If your dream is to live in Charleston, consider viewing homes in nearby Mount Pleasant or Folly Beach as well. You may find a perfect property that you would not have considered otherwise.
As a buyer in a seller’s market, go into the search with patience and determination. With the right mindset, you will eventually find a home that aligns with your needs and wants.
Find Your Dream Home in Charleston
Buying your ideal home in a seller’s market can bring a few challenges. However, with the right real estate agent, strategic actions and a little patience, you can set yourself apart and get into your dream property.
The real estate team at Dunes Properties is extremely knowledgeable regarding the Charleston real estate market. Our network of over 80 local real estate agents specializes in different housing needs, from historic properties to beach homes to first-time buyers looking in the Charleston and Mount Pleasant communities.
Contact us today to speak to one of our agents and start working toward finding the home of your dreams.