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 - You will need to formally apply for the loan as soon as possible in order to obtain final loan approval in a timely manner.  Often lending institiutions request additional financial documents or information concerning condo/homeowners' associations.  You can request Good Faith Estimates from as many lenders as you choose.  These estimates will enable you to compare the loans on an "apples to apples" basis.
• Appraisal – The lender will require this to ensure that the property is worth the sales price. It could cost from $350 to $750. Since each mortgage company has a list of approved appraisers, your lender’s office will order the appraisal.
• 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.
• Survey –  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 $500 to $750. 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. 
• Inspections –You will want to gather as much information as possible about the property.  I reccommend obtaining a Home inspection .  I believe it is in your best insterest to perform a Pest Inspection as well.
  

5.).Transfer ownership - When all of the above tasks have been attended to, it is time to come to the closing table. Since many property buyers are not local, attorneys are accustomed to performing “mail-away” closings. It is better if you can be here in person, however, so that you can be present at the final walk-through to make sure that the property is in the same condition as the day that you placed the offer on the property. 

Why do a Pest Inspection

 

 

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 - You will need to formally apply for the loan as soon as possible in order to obtain final loan approval in a timely manner.  Often lending institiutions request additional financial documents or information concerning condo/homeowners' associations.  You can request Good Faith Estimates from as many lenders as you choose.  These estimates will enable you to compare the loans on an "apples to apples" basis.
• Appraisal – The lender will require this to ensure that the property is worth the sales price. It could cost from $350 to $750. Since each mortgage company has a list of approved appraisers, your lender’s office will order the appraisal.
• 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.
• Survey –  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 $500 to $750. 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. 
• Inspections –You will want to gather as much information as possible about the property.  I reccommend obtaining a Home inspection .  I believe it is in your best insterest to perform a Pest Inspection as well.
  

5.).Transfer ownership - When all of the above tasks have been attended to, it is time to come to the closing table. Since many property buyers are not local, attorneys are accustomed to performing “mail-away” closings. It is better if you can be here in person, however, so that you can be present at the final walk-through to make sure that the property is in the same condition as the day that you placed the offer on the property. 

Why do a Pest Inspection

 

 

Vacation Rental Act for rental home purchases 

Financing Options

1031 Tax Free Exchange

Working with Real Estate Agents