The Process, Step-by-Step
The Initial Agreement and Earnest Money
Once your offer is accepted, you’ll probably provide an earnest money deposit. This is your way of showing good faith to the seller. It’s applied toward your purchase at closing. By law in South Carolina, the earnest money is held in a trust account, usually with the closing attorney, until the transaction is complete.
- Keep Written Records. For clarity, every agreement, counter-offer, or addendum should be in writing and signed by all parties. Your agent will draft and organize all necessary paperwork and make sure you have copies for your records.
- Stick to the schedule. Once your contract is in place, both you and the seller will have specific deadlines to meet. Staying on top of these ensures the process keeps moving smoothly. Your agent will keep you updated step-by-step so there are no surprises.
The Closing Attorney
In South Carolina, closings are handled by an attorney. The attorney will hold your earnest money in escrow, review the contract, and ensure that the title is clear of liens or encumbrances before the property transfers to your name. They’ll also review easements, restrictions, or other items that could affect property use.
How to Hold Title
When buying a property, you’ll need to decide how to hold the title. This decision has important legal, estate, and tax implications especially in the event of a sale or the death of the titleholder. It’s a good idea to consult with an attorney or tax advisor to determine the best way to hold title.
Due Diligence/Inspections
After your offer is accepted, you will need to be aware of your due diligence expiration date. Prior to this date, you can terminate the contract in writing as long as you pay the applicable termination fee as stipulated in your contract. It’s highly recommended to schedule a licensed property inspector to evaluate the property within the timeframe agreed upon in your contract. If you prefer specialized inspections, such as for the roof, HVAC, or structure, you can schedule those as well. For commercial properties, an environmental audit may be required by the lender. Your agent can recommend several qualified inspectors.
Once inspections are complete, there are a few possible outcomes:
1. Everything looks good. The results are satisfactory and you move one step closer to closing.
2. Negotiation. If the inspector finds issues, you and the seller may negotiate a solution. This could be repairs, a credit toward closing costs, or a price adjustment.
3.Termination. If there are items you’re not comfortable with and/or you can’t reach an agreement with the seller, you may choose to terminate the contract during your due diligence period as per the terms of your contract.
The inspection phase is an important safeguard, It allows you to understand the property’s condition before moving forward.
Appraisal and Lending
Stay in close contact with your lender throughout the process. They’ll let you know if additional documentation is needed to finalize your loan application. If they request documents, it’s important to get it to them in a timely manner. If your agreement is contingent upon financing, the property will likely need to be appraised by a licensed appraiser. This helps the lender confirm the property’s value before moving forward. Appraisers determine value based on square footage,home features, and recent comparable sales. Ideally, your Realtor®, lender, and attorney will all communicate closely with you as a team.
Property Insurance
If you’re financing your property, your lender will require homeowners insurance. The coverage amount will vary depending on the property and loan amount. If your property is in a high risk flood area, you will have additional flood insurance. You may be able to save money on your policy by considering these tips:
- Increase your deductible. A small increase may reduce your premium significantly.
- Ask about discounts. Many insurers offer discounts for multiple policies, security systems, storm shutters, and other security/safety items.
Additional South Carolina Notes
- In South Carolina, the sale is official when the deed records and/or when funds are officially disbursed. Buyers and sellers almost never sit at the same table at the same time. Be sure you understand when you will receive your keys.
- Property tax rates in South Carolina are 4% for primary residences and 6% for second homes or investment properties. When a property transfers, it automatically defaults to the higher 6% rate. Your agent and attorney will guide you through applying for the 4% primary residence rate if applicable, as well as the homestead exemption if you qualify.
