Basic Tips: Purchasing Property on the Outer Banks

• Usage – Are you looking to relocate here permanently? Would you like a weekend getaway that is used strictly by friends and family? Do you want to offset the costs involved by offering it as a weekly or long-term rental?   
• Price range – You will certainly want to stay within your budget, but if you are planning to offer the property for rent, remember to take into account expected yearly income as well. For instance, a modest beach box between the highways may cost less than a newer cottage with amenities such as multiple master suites, pool, game room, etc., but the latter home should have substantially higher rental income.
• Location – Is there a special town or neighborhood that you enjoy? Also, vacation homes that tend to be closer to the ocean (oceanfront, oceanside or “between the highways”) generally command much better weekly rentals. Homes that are “Westside” are usually best suited for year round or second home use. Of course, there are always exceptions to this rule of thumb.
• Amenities – Some subdivisions and condominiums offer items like golf or boating access, clubhouses, community pools, tennis, etc. Remember though, there will probably be monthly or quarterly association dues to cover these extras. Be sure to analyze cost versus services provided.
• Type of home – A single family dwelling will require the owner to be responsible for all maintenance while condominiums usually include the costs of exterior maintenance in the association fee.  
• Holding period – For a sound investment strategy, plan to hold the property for at least 5 to 7 years. Based upon past history this time frame should allow you to enjoy a marked appreciation in land and property values. 
• Financing - Contact a local mortgage broker, as these people understand our specific market and can help you procure the smartest loan for your specific needs. Local lenders can also generate a “pre-approval letter,” which is essential to accompany any offer to purchase. Lenders can also generate a “pre-approval letter” which strengthens the validity of an offer to purchase property.

• Earnest money - In North Carolina it is customary to provide Earnest money to prove your sincerity in wanting to purchase the property. The amount is declared on the Offer to Purchase, and you will need to provide me with a check made out to Sun Realty before I present the offer. If the Seller accepts your offer, the check will be deposited and held in escrow until closing, at which point it will be applied toward the purchase.
• Loan application - Within 5 to 7 days, you will need to formally apply for the loan. The Offer to Purchase describes the terms of the loan, such as interest rate, loan amount, type of loan, etc. (If the lender cannot provide you with a loan that meets all these requirements, you have the right to not proceed with the contract and the earnest money will be returned to you.) 
• Obtain an attorney – In North Carolina the attorney will prepare legal documents pertaining to the purchase as well as perform the title search to ensure clear title. The attorney’s office will conduct the closing and complete the HUD closing statement that accounts for all funds involved in the transaction. I can make recommendations if you need help in this area. Price for this service varies, so it is a good idea to get a quote from the closing attorney’s office prior to engaging their services.
• Appraisal – The lender will require this to ensure that the property is worth the sales price. It will cost around $250 to $350. Since each mortgage company has a list of approved appraisers, your lender’s office will order the appraisal.
• Survey – The attorney’s office will order this for you if necessary. If the Sellers purchased a survey when they bought the property, they may be willing to sign a “survey affidavit,” which warrants that there have been no changes to the property since their survey was done. If you need to purchase a survey, plan to budget around $400 to $650. Waterfront surveys can cost more depending on the complexity of the property.
• Elevation Certificate – If your home is located in a flood hazard zone, the mortgage company will require flood insurance. A flood elevation should be done at the time of the survey and a flood certificate issued. This certificate denotes the buildings elevation (in feet, above sea level.) A surveyor will charge about $200 for one, but if you are getting a survey at the same time it should only be $100 to $150 more. 
•  Home inspection - This should be performed at the property as soon as possible. Generally it is scheduled within a week or two from date of contract, but during the summer months it may take longer due to limited access to rental properties. The cost is between $350 and $500 (depending on the size of the home) but it is money well spent. This gives you the opportunity to ensure that the major elements of the home (appliances, heating/cooling system, roof, foundation, etc.) are “performing the function for which intended and shall not be in need of immediate repair.”   If the home inspector finds that some systems are not working at all or are not functioning up to par, you as the Buyer have some remedies. You can choose to request that any or all of the items be repaired by the Seller, you can ask for partial credit and proceed with repairs/replacement after closing, or you can accept the property in “as-is” condition. The Seller can choose to make requested repairs and/or concessions, or can refuse to do anything. If no agreement can be made as to home inspection issues, the contract can be nullified and all earnest money is released to the Buyer. Luckily, this does not often come to pass. The home inspection verbiage is a standard clause in our North Carolina Offer to Purchase and Contract.

Why do a Pest Inspection

 

 

Rent or not to Rent

Vacation Rental Act for rental home purchases 

Financing Options

1031 Tax Free Exchange

Working with Real Estate Agents

 

 

 

 

 

 

  

Basic Tips: Purchasing Property on the Outer Banks

• Usage – Are you looking to relocate here permanently? Would you like a weekend getaway that is used strictly by friends and family? Do you want to offset the costs involved by offering it as a weekly or long-term rental?   
• Price range – You will certainly want to stay within your budget, but if you are planning to offer the property for rent, remember to take into account expected yearly income as well. For instance, a modest beach box between the highways may cost less than a newer cottage with amenities such as multiple master suites, pool, game room, etc., but the latter home should have substantially higher rental income.
• Location – Is there a special town or neighborhood that you enjoy? Also, vacation homes that tend to be closer to the ocean (oceanfront, oceanside or “between the highways”) generally command much better weekly rentals. Homes that are “Westside” are usually best suited for year round or second home use. Of course, there are always exceptions to this rule of thumb.
• Amenities – Some subdivisions and condominiums offer items like golf or boating access, clubhouses, community pools, tennis, etc. Remember though, there will probably be monthly or quarterly association dues to cover these extras. Be sure to analyze cost versus services provided.
• Type of home – A single family dwelling will require the owner to be responsible for all maintenance while condominiums usually include the costs of exterior maintenance in the association fee.  
• Holding period – For a sound investment strategy, plan to hold the property for at least 5 to 7 years. Based upon past history this time frame should allow you to enjoy a marked appreciation in land and property values. 
• Financing - Contact a local mortgage broker, as these people understand our specific market and can help you procure the smartest loan for your specific needs. Local lenders can also generate a “pre-approval letter,” which is essential to accompany any offer to purchase. Lenders can also generate a “pre-approval letter” which strengthens the validity of an offer to purchase property.

• Earnest money - In North Carolina it is customary to provide Earnest money to prove your sincerity in wanting to purchase the property. The amount is declared on the Offer to Purchase, and you will need to provide me with a check made out to Sun Realty before I present the offer. If the Seller accepts your offer, the check will be deposited and held in escrow until closing, at which point it will be applied toward the purchase.
• Loan application - Within 5 to 7 days, you will need to formally apply for the loan. The Offer to Purchase describes the terms of the loan, such as interest rate, loan amount, type of loan, etc. (If the lender cannot provide you with a loan that meets all these requirements, you have the right to not proceed with the contract and the earnest money will be returned to you.) 
• Obtain an attorney – In North Carolina the attorney will prepare legal documents pertaining to the purchase as well as perform the title search to ensure clear title. The attorney’s office will conduct the closing and complete the HUD closing statement that accounts for all funds involved in the transaction. I can make recommendations if you need help in this area. Price for this service varies, so it is a good idea to get a quote from the closing attorney’s office prior to engaging their services.
• Appraisal – The lender will require this to ensure that the property is worth the sales price. It will cost around $250 to $350. Since each mortgage company has a list of approved appraisers, your lender’s office will order the appraisal.
• Survey – The attorney’s office will order this for you if necessary. If the Sellers purchased a survey when they bought the property, they may be willing to sign a “survey affidavit,” which warrants that there have been no changes to the property since their survey was done. If you need to purchase a survey, plan to budget around $400 to $650. Waterfront surveys can cost more depending on the complexity of the property.
• Elevation Certificate – If your home is located in a flood hazard zone, the mortgage company will require flood insurance. A flood elevation should be done at the time of the survey and a flood certificate issued. This certificate denotes the buildings elevation (in feet, above sea level.) A surveyor will charge about $200 for one, but if you are getting a survey at the same time it should only be $100 to $150 more. 
•  Home inspection - This should be performed at the property as soon as possible. Generally it is scheduled within a week or two from date of contract, but during the summer months it may take longer due to limited access to rental properties. The cost is between $350 and $500 (depending on the size of the home) but it is money well spent. This gives you the opportunity to ensure that the major elements of the home (appliances, heating/cooling system, roof, foundation, etc.) are “performing the function for which intended and shall not be in need of immediate repair.”   If the home inspector finds that some systems are not working at all or are not functioning up to par, you as the Buyer have some remedies. You can choose to request that any or all of the items be repaired by the Seller, you can ask for partial credit and proceed with repairs/replacement after closing, or you can accept the property in “as-is” condition. The Seller can choose to make requested repairs and/or concessions, or can refuse to do anything. If no agreement can be made as to home inspection issues, the contract can be nullified and all earnest money is released to the Buyer. Luckily, this does not often come to pass. The home inspection verbiage is a standard clause in our North Carolina Offer to Purchase and Contract.

Why do a Pest Inspection

 

 

Rent or not to Rent

Vacation Rental Act for rental home purchases 

Financing Options

1031 Tax Free Exchange

Working with Real Estate Agents