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How to Buy a House in South Carolina

Thinking about buying a house in South Carolina? There are many reasons why this southeastern state can be an ideal setting to make such a major investment. Whether you’re relocating because of your job, to be closer to family or to enjoy a change of scenery, we’re here to help you learn how to buy a house in South Carolina.

Why Consider South Carolina?

Many future homeowners will be attracted to the temperate climate and growing job market, while families will love the favorable student-to-teacher ratio of 15.8 to 1. And its varied scenery offers something for everyone, from the lush, natural beauty of the mountains and forested regions, to the cool blue waters and sandy beaches along the coast.

The Real Estate Market in South Carolina

There are two reasons homebuyers can benefit from investing in a home in the Palmetto State. One is the flourishing housing market. According to Bestplaces.net, the median cost of a home is $223,400. Over the last 10 years,  homes have appreciated at a rate of 6.9%.

The other is the cost of living; it’s roughly 11.5% lower than  the rest of the U.S..

Best Cities in South Carolina

If you’re not yet sure where to move in South Carolina, you might want to consider one of these cities:

Greenville

Located on the edge of the Blue Ridge Mountains, Greenville is one of the state’s largest cities. Buying a house here allows you to take advantage of its affordable housing market and the active job market. Home to the County Museum of Art and Upcountry History Museum, Greenville boasts a diverse culture of history, arts, and entertainment. Falls Park on the Reedy includes views of riverside gardens and waterfalls.

Spartanburg

If you’re looking for more of a small-town feel while still being accessible to other metropolitan areas, Spartanburg is a good option to consider. . Locating in upstate South Carolina, the city is walkable and surrounded by beautiful natural features, perfect for those who love the outdoors and want access to a lot of amenities.

Anderson

Nicknamed “The Friendliest City in South Carolina,” this could be a great destination if you’d appreciate being welcomed with open arms by the close-knit community, Anderson boasts diversity and proximity to culture-rich cities like Greenville, making it ideal for homebuyers from all backgrounds.

Charleston

Charleston is one of the most well-known cities in South Carolina. King Street hosts live music, a vibrant restaurant scene, and important historical sites all with a view of the Atlantic Ocean. The first shots of the Civil War took place there. Charleston is the location of several universities, including The Citadel, College of Charleston, Charleston Southern University, and Trident Technical College. 

Columbia

Columbia is the capital city of South Carolina and the home of the University of South Carolina. Located at the joining of the Saluda River and Broad River to form the Congaree, Columbia hosts Fort Jackson, the largest US Army area for basic training. Columbia is the 2nd largest city in South Carolina with a population of over 125,000 people.

How to Buy a House in South Carolina

Now that you’ve learned a little about the state and its local culture, let’s take some time to learn more about how to buy a house in South Carolina.

Save for a Down Payment

No matter what type of property you purchase, you’re likely to need a down payment. A conventional mortgage will often require a down payment of 3 to 20%, which means that you’ll want to have ample savings before you make an investment into real estate.

There are some options for a lower down payment, which we’ll explore below, but you’ll still likely need some savings to invest in closing costs, inspections, appraisals and other fees associated with this major purchase.

Determine Your Needs

Before you buy a home, you’ll want to spend some time thinking through your needs. This includes more than just choosing between a single-family home and a townhouse.

You’ll also want to consider more specific factors, such as:

  • The type of neighborhood you want to live in
  • The lot size
  • Proximity to work (commute time)
  • Proximity to schools
  • Access to local amenities (grocery stores, parks, etc.)

Additionally, you may also want to consider the condition of the property itself.

For example, many new homeowners can save money by buying a fixer-upper, though this will demand additional investment over time to make improvements.

This can be a great way to increase the value of your home, especially important if you plan on selling the home in the near future. But other homeowners may find this level of investment to be too costly or time-consuming. If that sounds like you, consider spending more money upfront to purchase a home that’s move-in ready.

Determine Your Assets

Buying a home is a major investment requiring a thorough evaluation of your available assets. Your mortgage lender will want to evaluate financial details such as your:

  • Credit score
  • Debts and income
  • Savings

These factors will determine the type of mortgage you qualify for, as well as your interest rates.

If you want to qualify for the best mortgage rates, you should have the following:

  • A credit score of 620 or better
  • A debt-to-income ratio of 36% – 43% at most
  • Enough savings for a 5 – 20% down payment
  • Three to six months’ worth of emergency savings

Knowing your financial situation beforehand can help you prepare for the type of mortgage you qualify for. Setting an appropriate budget for your future home makes a big impact on your future finances.

Get Preapproved for a Mortgage

Your lender will evaluate your financial information and determine which types of loans you qualify for, as well as your expected interest rate.

During this stage, you can also determine whether you’ll want to have a 15-, 20- or 30-year mortgage term.

If you can’t afford a 20% down payment, many lenders offer programs that require a down payment of just 3%. Putting down less than 20% might require private mortgage insurance (PMI) as part of your loan.

Find a lender that will explain your options in detail so that you can make an informed decision.

Determine Your Budget

Next, you’ll want to determine your budget. Just because you’re approved for a $300,000 mortgage doesn’t mean you should purchase a home for this price.

You might want to purchase a home for less than your approved mortgage price to keep your monthly payments low or simply to avoid biting off more than you can chew, financially speaking.

Additionally, your budget should include more than just the cost of the house itself. Think about the other fees that you’ll be responsible for during the purchasing process, which may include:

  • Closing costs
  • Appraisals
  • Title fees
  • Inspections

If you’re moving to South Carolina from out of state, don’t forget to factor in relocation expenses.

For these reasons, you should make sure not to overreach and exceed your budget. Leaving enough in your bank to cover three to six months’ worth of expenses gives flexibility for any unexpected emergencies.

Find a House

Now that you’ve covered all of the details, you’re ready to start the fun part of actually looking for a home!

If you’re already living in South Carolina, you might start by visiting the city you’d like to move to. Admittedly, this is the least efficient method of finding a home, but it will give you the best “feel” for the houses you see and their surroundings. That’s something you can’t get from a website.

You can also find options quickly with a local realtor, who can help you to narrow some of the listings that you see online. This will give you a more comprehensive picture of the homes that are available to meet your needs.

Get a Realtor

Don’t feel like you have to do all this on your own. You don’t have to have any homes picked out before you contact a real estate agent. A licensed realtor can help you refine your search, and even direct you to properties that might not yet be listed.

He or she can help you to navigate the process of securing financing and explain the process to avoid any confusion. Their input will be necessary during the sale process, as you make an offer, negotiate the final price, navigate inspections and nail down a timeline for closing. The process of buying a home can be overwhelming, but working with a realtor can keep you from feeling like you’re on your own.

Keep in mind that it’s usually best to secure your own realtor, rather than calling the listing agent for a property. The seller’s realtor will act in the interests of the seller, while a buyer’s agent can make sure that you have an advocate for your own needs. One of the main benefits of a realtor is the personalized assistance and experience that they bring to the table.

Make an Offer

Once you find a potential house in South Carolina, your realtor can help you put together an offer to present to the seller. The seller has the choice to accept, counter or reject your offer.

Be prepared for this process to have some back-and-forth before everything is said and done, especially if you’re asking for assistance with closing costs from the seller’s side.

Close the Sale

Congratulations! You’re now ready to close the deal. At the closing table, you may need to bring money toward closing costs to cover administrative fees involved in processing the loan, in addition to your down payment.

These costs are typically 2% to 5% of the cost of the home. In some cases, the seller may agree to cover some or all of these costs if this was outlined as part of your purchase agreement upfront.

Help for First-Time Homebuyers in South Carolina

Understandably, many homebuyers struggle to meet the financial demands of a conventional mortgage. First-time homebuyers especially may find it challenging to save for a 20% down payment, and others may find it challenging to obtain a low interest rate with their credit history.

Thankfully, there are several government-backed programs that can provide assistance.

FHA Loans

Backed by the Federal Housing Administration, FHA loans allow you to buy a home even if your credit score is on the low side. If your score is 580 and above, you only need a down payment of 3.5%.

If your score is 500 to 579, you’ll need a down payment of 10%.

USDA Loans

USDA loans are available for homes in rural or suburban areas and don’t require any down payment at all. These loans may be ideal for buyers with limited income or damaged credit, making home ownership a reality if you find a home in a qualifying location.

VA Loans

If you or your spouse have served in the military, the Department of Veterans Affairs can help you with a home loan. VA loans don’t require any down payment, nor do they require mortgage insurance like FHA loans. However, they may be subject to additional restrictions, eligibility requirements and a funding fee.

These loans can be a great benefit for those who have served our nation, putting a new home within reach.

Trust Agave to Help You Finance Your South Carolina Home

Need a helping hand? The staff at Agave Home Loans is here for you. Our experienced team can help you to purchase your dream home. Contact us today to learn more about the process.

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Marshall Gottlieb - Co-Owner and CEO
Marshall spent seven years in hospitality and the restaurant industry prior to beginning a career in real estate and lending. After obtaining a finance degree with an emphasis in investments from Northern Arizona University, he began working at Quicken Loans. He spent seven years there as a banker and then Senior Director prior to co-founding Agave Home Loans. (NMLS ID: #1107208)

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