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First-Time Homebuyers Guide Realtors’ Tips for First-Time Buyers

Understanding the Loan Process

What to Look for in an Agent

Loan Programs for First-Time Buyers

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CONTENTS Tips for 6 Realtors’ First-Time Buyers 8


12 16

Understanding the Process Key to Success

Understanding Your Loan Options

Mortgage Brokers Offer Tips for First-Time Buyers

State Offers Programs for First-Time Buyers

Assistance Available for Qualified Buyers

Finding the Right Agent


Tips for First-Time Homebuyers | 1534 Main St. Columbia, SC 29201 | 803.765.0707 Published by Portico Publications, LTD.

EDITORIAL EDITOR: Dan Cook | | x133 MANAGING ED.: Katie Alice Walker | CONTRIBUTING PHOTOGRAPHER: Jonathan Sharpe CONTRIBUTORS: Allison Caldwell, Mary Ellen Cheatham PRODUCTION PROD. MGR.: Lisa Willis | | x121 DESIGNER: Wilbert Fields | | x145 DESIGNER: Joey Ayer | | x150 ADVERTISING CLASSIFIEDS MGR: Cale Johnson | | x131 Katie English | | x141 Jason Stroman | | x132 ASSOC. PUB.: Kerry Powers | | x128 DISTRIBUTION CIRCULATION MANAGER: Tammy Figurski | x152 DOCK MANAGER: David Alexander DISTRIBUTORS: Nelson Baker, Travis Bland, Leverne Commander, Wesley Dabbs, Tom Ellis, Bob Folts, Andi Hearn, Chris Kammer, Donald McLane, Chess Moorer, Becky Pfeifer, Richard Shirah, Dave Shuler, Don Turner, James Williams BUSINESS PUBLISHER: Eric Hancock | | x129 OPERATIONS MANAGER: Jen Coody | x124 PORTICO PUBLICATIONS CEO: Bill Chapman GROUP PUBLISHER: Frank Dubec Advertisers in Free Times assume responsibility for the entire content and subject matter of all advertisements. In case of error or omissions in advertisement, the publisher’s sole liability shall be to publish the advertisement at a later date. Notice of error must be made within ten days of first insertion. Views expressed in Free Times reflect the opinion of the individual writer or artist and are not necessarily those of Free Times. Unsolicited submissions are welcome, but may not be returned. © 2011 Portico Publications, LTD. All rights reserved.

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Realtors’ Tips for First-Time Buyers Understanding the Process is Key to a Successful Purchase By Allison Caldwell


ou’ve scoped out the neighborhoods and know how much houses are listing for in which areas. You’ve taken a serious look at your monthly budget and know what you can and can’t afford, and you’ve saved enough for your down payment and closing costs. You’ve pinned hundreds of photos on for inspiration and have opened a brand new charge account at Lowe’s or Home Depot. Still, you might not be ready to make one of life’s most important decisions: buying your first home. From finding competitive mortgage loan rates to getting the most house for your buck, an experienced real estate agent can help you navigate this complicated process with ease. We asked two local real estate professionals to share some tips for first-time buyers. FT: What are some of the hottest in-town neighborhoods for first-time buyers, and why?   Madison A. Ballagh RE/MAX Metro Associates Broker/Realtor

Rosewood and Shandon are two neighborhoods that



first-time home buyers gravitate to here in Columbia. In regards to price range, Shandon is more expensive by at least 40-50 percent. Why reside here? That’s easy. Real estate is all about location, location, location!    Jennifer McBroom Russell and Jeffcoat Real Estate Agent

There are many popular areas for first-time buyers. In downtown Columbia, neighborhoods like Rosewood, Earlewood, Laurel Hill and Keenan Terrace all have homes in the first-time buyer’s price range. There are plenty of firsttime friendly neighborhoods in the Northeast, as well. Other hot areas include the Avenues in West Columbia and the area

Local first-time buyers often look in Shandon. For those who aren’t ready for Shandon-sized prices, though, there are many other options, including Rosewood, Earlewood, West Columbia the Northeast and Lexington. Photo by Katie English.

around Highway 378 in Lexington — still close to downtown and the Interstates, but a little more house for your money and lower taxes than inside the city limits. FT: What should first-time buyers look for: in a real estate agent; in a home or neighborhood; in financing or investment options?     Ballagh: In a real estate agent: honesty, integrity and 100 percent commitment of service is key in making a first-time home

professional.  For a home or neighborhood, several factors might influence a buyer’s decision: location and the state of the neighborhood and surrounding area — is it on an upwards appreciation in value, or is it stagnant and potentially on the decline? Many consumers look at the industry surrounding the neighborhood. Location and demand influences how prices are going to go.   In a home: Is it move-in ready, or does it need a lot of work? If so, does the price justify the

“There are many popular areas for firsttime buyers. In downtown Columbia, neighborhoods like Rosewood, Earlewood, Laurel Hill and Keenan Terrace all have homes in the first-time buyer’s price range.” — Jennifer McBroom, Russell & Jeffcoat buyer or any potential real estate consumer feel comfortable doing business with a real estate

work? Does the home meet the buyer’s current needs in regards to size of space and bedrooms?  

Earlewood and other neighborhoods in North Columbia are popular with first-time buyers. Photo by Katie English.

McBroom: Finding the right agent depends on where you want to buy. Look around the areas you’re interested in to see who’s listing where. If you see the same agent sign over and over again, chances are that agent will know that area well enough to make the best offers. Also, if a friend refers an agent and had a great experience with them, there’s already a built-in level of trust. You want an agent who will spend time to listen to your needs and find a house to suit those needs. In a home: Consider the age. New homes will have a warranty. If a home is more than 15 years old, find out how recently the roof, heating and air and other large expenses have been replaced. Most first-time buyers are looking for turn-key, move-in ready homes that won’t need major improvements in the first couple of years. When

you find a neighborhood you like, drive by at different times of day to observe traffic patterns, neighbors and nearby amenities. In financing: Pick an agent and ask them to recommend several lenders. There are special loan programs for firsttime buyers, 4-to-1 matching programs, state housing programs and lots of loan options — pick a lender that can do them all. It’s hard to compare interest rates until you have the house that you want, but an agent can help you compare multiple lenders and get pre-approved.   FT: What are some common mistakes that first-time buyers make, and how can those mistakes be avoided?    Ballagh: The biggest mistake is simply not knowing the process; there are so many intricacies with each transaction. What you don’t know will hurt you!

By hiring a true buyer-agent representative, first-time buyers can be assured that they’re making a well-informed decision with someone who will guide them through the process and protect their best interests.   McBroom: Many first-time buyers don’t realize that they don’t pay real estate commission for an agent. Instead of building a relationship with any one agent, they’ll call the listing agents on several homes and travel from appointment to appointment. One agent can pull the same listings and show them all, and the seller pays the commission either way. As a first-time homebuyer, choose a competent agent that will advocate for you and share their knowledge.

Ballagh: First-time buyers are so appreciative for my assistance with their first new home, and the joy really does show. They feel such a sense of accomplishment in beginning this new stage of life and owning a piece of the American Dream, and it’s exciting to be a part of it.

FT: What do you enjoy most about working with first-time home buyers?  

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McBroom: I love working with first-time homebuyers. I love that they’re going through a process that they’ve never been through, and that I’m able to help them understand the lender and contract terminology, answer their questions and hopefully prepare them for a lifetime of buying and selling houses. Buying a first home is a huge milestone in life, and I get to be a part of it.



Understanding Your Loan Options Mortgage Brokers Offer Tips for First-Time Buyers By Mary Ellen Cheatham


he bad economy might still have a strong grip, but buying a home is not impossible. Interest rates on mortgages are low, and financing options abound. There’s even hope for potential buyers with less-than-perfect credit.

We asked Kelly Hunt, branch manager of Homeowners Mortgage and Jacob Crowder, vice president of retail operations at 1st Choice Mortgage, for up-to-date tips on getting a mortgage these days. FT: There are several different mortgages a homebuyer can get, including mortgages through the Federal Housing Administration (FHA). How do they differ? Kelly Hunt: There are conventional mortgages and government-insured mortgages — FHA, VA (U.S. Department of Veterans Affairs), USDA (U.S. Department of Agriculture). Within those mortgage types there may be fixed rates, adjustable rates and buy-down programs. They vary by required down payment, source of the down payment, credit score requirements, debt-ratio requirements, property types and some other



differences.  Fixed rates give you an interest rate that will not change throughout the length of the loan. Adjustable rates can vary depending on the type of program and may adjust as often as every six months, year or longer. Buy-downs typically have a fixed rate, but the first year your rate is 2 percent below the permanent rate and the second year it is 1 percent below the perm rate. The third year you begin the permanent rate through the remainder of the loan. FT: How do I decide which one is right for me? Hunt: To determine the loan that is best for you, you should start by prioritizing the following: Out-of-pocket money, then monthly payment, and finally, long-term investment. Of course they are all extremely important, but only one can be most important. In discussing your situation and your priorities

with a knowledgeable and reputable lender, he or she can help you navigate the differences in programs and loan types to determine which loan best fits your needs. Knowing what is important to you — and being honest with your lender — will ensure you obtain a loan that best fits your needs. FT: What factors will affect interest rates? Hunt: While program types and down payment amounts are an important factor affecting interest rate, the biggest factor is your credit score. FT: What options are available if the buyer’s credit isn’t so good?  Hunt: If your credit is unacceptable to obtain a mortgage currently, it is still advisable to speak with a lender to map out a plan to implement and get you on track to purchase a home in the future. Depending on your situation, it could be a one-month plan, sixmonth plan or even an 18-month plan. You always want a lender to review your credit for you to

the correct advice in obtaining a mortgage is to speak with a reputable lender about what they think is needed for you to reach the goal of homeownership. FT: There are companies who advertise that they can eliminate or reduce debt. Is there a good way to clean up credit quickly?  Hunt: These are temporary fixes that usually will not get you the end result needed for a mortgage. Most of these companies can get items removed from your credit for a 30-day period, but mortgage lenders pull a credit report a few days before your loan closing and by then they will most likely reappear and will jeopardize your closing on the purchase of your home. FT: How much of a down payment will first-time buyers need to make? Hunt: Down payment requirements depend on the loan program, but there are some loans available with little or no money down. The USDA and the VA offer loans with no

“The USDA and the VA offer loans with no required down payment if you meet program requirements. There are down payment assistance programs available through Richland and Lexington counties, the South Carolina State Housing Authority and some lenders offer down payment assistance programs.” — Kelly Hunt, Homeowners Mortgage

know what aspects of it are and are not affecting your ability to obtain a mortgage. There is a lot of misinformation out there in regards to credit scoring. The best way to know you are getting

required down payment if you meet program requirements. There are down payment assistance programs available through Richland and Lexington counties, and the South Carolina

Pictured: Home in Shandon. Buyers should think about all the costs associated with buying and owning a home, as well as its investment value — not just the monthly payment — in deciding what type of loan makes the most sense. Photo by Katie English.

State Housing Authority. And some lenders offer down payment assistance programs. A knowledgeable lender should be able to help you navigate these programs.   FT: Should I opt for a 15-year loan or a 30-year loan? What are the benefits and drawbacks of each? Jacob Crowder: Homebuyers need to opt for a payment they are comfortable with for the foreseeable future. The benefit of a 15-year mortgage is a lower interest rate. Fifteen-year rates are typically a half to three quarters of a point lower than a comparable 30-year rate. The drawback is that the overall payment is higher because of the shortened amortization period. FT: How much of a down payment will buyers

need? Can you borrow money for that? Crowder: There are programs that allow first-time homebuyers to borrow 100 percent of the purchase price, but they are restricted by either location and/ or income restrictions. The FHA program requires a 3.5 percent down payment and also allows for less-than-perfect credit with no income or location restrictions. Conventional financing requires 5 percent down. My Community, a Fannie Mae product, only requires 3 percent down.  You cannot borrow money for a down payment. Most programs allow gifts from a relative that can be used as down payment.  FT: What costs will be associated with my mortgage loan?

Crowder: The cost of closing a mortgage is broken into two categories, closing costs and prepaid costs. Closing costs include bank fees (zero to 2 percent of the loan amount depending on the rate), title insurance ($3.60 per thousand), attorney fees ($600-$1000), appraisal ($350-$400) and recording ($25$55). Pre-paid costs include the first year’s insurance premium, starting tax escrows, and prepaid interest. Another cost that doesn’t fit in either of these categories is inspections.     FT: How do you negotiate the best interest rate?

important. Also, discuss different closing cost scenarios. Discount points are available on most products and lead to lower rates in return leads to lower monthly payments.   FT: Can a person with bad credit buy a home? If so, what mortgage products are available?

Crowder: I recommend finding a loan officer you are comfortable with and discussing your options. Different programs have different rates so making sure you are in the right program for your specifications is very

Let us know what you think: Email

Crowder: To buy a house, your last 12 months’ credit history needs to be good. People with marginal credit can still buy homes. Most commonly a FHA product is used that allows for a less-than-perfect credit history.



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State Offers Programs for First-Time Buyers Low Rates, Down Payment Assistance Available for Qualified Buyers


By Katie Alice Walker

irst-time buyers have many financing options, but if you don’t have a down payment — which is so crucial to securing a loan in this economic climate — your first home might be out of reach. Unless, that is, you apply and qualify for a loan through the South Carolina State Housing Finance and Development Authority’s First-Time Home Buyer Mortgage Loan program. 12


Last year, the South Carolina State Housing Authority financed 1,268 mortgages to qualifying buyers. Photo by Katie English.

Haven’t heard of the program? Last year, South Carolina State Housing financed 1,268 mortgages totaling $64 million. Since 1979, the program has financed 38,358 mortgages with loan amounts exceeding $2.3 billion. The average home price for those who have financed homes through South Carolina State Housing is $109,700. For those reasons alone, it’s a solid program that first-time buyers often find worthy of checking out. We talked with Clayton Ingram, South Carolina State Housing’s director of marketing and communications, about how first-time buyers can take advantage of the benefits the program offers. FT: When was the first-time homebuyer loan program implemented? Clayton Ingram: We’re 40 years old this year, so we’ve been around for a long time. We were implemented to be able to serve the first-time homebuyer in the middle price range, to help people get into homes, build neighborhoods and help the economy. Our lending fell off when the economy fell off, like everyone else, but we’re recently seeing a

bit of an uptick. Right now, we’re one of the best deals around. We can adjust our rates and drop them to fulfill our mission and make sure people can buy houses. FT: Who qualifies for the loan? Are there income limits or other limitations? Ingram: We’re an agency that helps people get into their first homes, which has a couple meanings. Essentially, it’s the average American home for the average wage earner. Either you’ve never owned a home before or you haven’t owned a home in three years. It depends on the number of people in the home, but for Richland and Lexington Counties, for two people starting out, the minimum income would be a matter of debt-to-income ratio, and the maximum yearly income would be $63,600. There are no restrictions on where you can buy the home, and any home up to $225,000 qualifies. FT: Who’s currently seeking the loans? Ingram: There’s not one specific type of customer: It’s everyone from people who are just starting

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Under the State Housing Authority’s Palmetto Heroes program, teachers, nurses, firefighters and veterans may be eligible for low interest rates and down payment assistance. Photo by Katie English.

out and buying first homes, and those just out of college. But we also have retirees using our programs. They might have moved to South Carolina and maybe lived in Florida or New York, and they come in. Because of their present income situation, they qualify for one of our loans. We also have a specific loan program called Palmetto Heroes that gives loans to specific groups of people that are vital to our community infrastructure, but who often can’t save enough for a down payment all at one time. Right now, we’re offering that program to teachers, nurses, firefighters and veterans. Those that qualify get a 4.00 percent interest rate and $5,000 in down payment assistance. It helps them clear the hurdle to live closer to where they work, thus becoming more integrated into the community, building equity



and stretching their salaries. FT: What are the advantages of using a South Carolina State Housing loan? Ingram: We have below-market interest rates. For our market, the middle-income home market, we can typically get a lower-thanaverage market rate. Right now, South Carolina State Housing offers a competitive fixedinterest rate of 4.375 percent. We offer down payment assistance of $4,000, which also sets us apart. A lot of people can make the monthly house payment that goes along with purchasing a home when two people in the household are working, but for whatever reason, they may not be able to save up the four or five thousand [dollars] to make a down payment.

We may also qualify borrowers with a credit score of 620 and above, and we also only offer fixed-rate mortgages. We’ve never used any exotic mortgage options, only fixed-rate. They are normally 30-year mortgages, but we also offer 20 and 25-year mortgages. Our mortgage programs also use no public or tax funding. We’re funded by securities sold to investors nationwide. FT: What’s the process for financing a home through South Carolina State Housing? Ingram: We don’t lend money directly to the person buying the home. Homebuyers should go to a lending institution, mortgage broker, or bank just the way any buyer would. It’s handled through the bank or the mortgage broker

and we buy the loan from them. It’s a good idea to start by going to get prequalified, and then armed with that information, you can begin shopping for homes. We want people to be aware of the program because if it’s the best loan for them, they need to get it. Our customers work with us. When you qualify for one of our loans, you’re one of our customers and we assign counselors, and our customers also make their monthly payments to South Carolina State Housing. So if you need assistance, you just call and ask for your counselor by name. For more information on South Carolina State Housing’s participating lending partners and additional details, including income categories and maximum home prices by county and household size, visit Let us know what you think: Email

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Finding the Right Agent Tips for First-Time Homebuyers by allison caldwell


uying your first home can be a daunting task. Chances are you’re unlikely to stumble upon the perfect house for sale in the trendiest neighborhood at a price you can afford ­— and even if you did, it might not be the best investment. For first-time homebuyers especially, finding the right real estate agent to help you through the process is essential to finding the right home that fits your needs, wants and budget.

There are tried and true methods of discovery: asking friends and family members for referrals, scouring print ads or websites for neighborhood experts and customer testimonials, and attending open houses to meet and greet potential agents in person. Finding someone you can trust for good advice will save you lots of frustration and money down the road. Part of finding someone you can trust is finding someone who will show you homes in the areas you are interested in. Not all agents are experts in all parts of town. Look at the “for sale“ signs in the neighborhoods you are interested in: Are there a few agents’ names that keep popping up? They might specialize in that area, so find out what their reputation is. Here are some tips from industry insiders to help you find the right agent. Nick E. Kremydas CEO, South Carolina Realtors

“As the largest professional trade association in South

Carolina, we are committed to becoming the moving force in improving the quality of life in our state,“ says Nick Kremydas, CEO of South Carolina Realtors, which has more than 15,000 members statewide. “The two best resources on the web for consumers are and houselogic. com. is the best place to search listings and find local realtors, and HouseLogic offers free information and tools from the National Association of Realtors to help consumers make smart and timely decisions.“ In deciding to work with an agent, Kremydas suggests asking certain questions: Does the agent have an active real estate license in good standing? To find out, check with the South Carolina Real Estate Commission. Does the agent belong to a Multiple Listing Service (MLS) and/or a reliable online homebuyer’s search service? These cooperative information networks provide descriptions of most of the houses for sale in a particular region. What real estate designations does the agent hold? ABR (accredited buyer’s representative), CRBsm (certified real estate broker manager), and CRS (certified residential specialist) are just a few of the value-added designations and certifications available to realtors. Which party is the agent representing, the buyer or the seller?

Quality homes at reasonable prices have drawn lots of first-time buyers to the Avenues area of Cayce in recent years. Photo by Katie English.



“This discussion should occur early on, at first contact with the consumer,“ Kremydas says. You’re bound to have lots of questions when you’re buying a home, and a good realtor will know more than just house



high-end range,“ Fowles says. “Prices are being reduced in all categories, so sellers in general aren’t going to fare as well. Until we see a significant increase in the number of buyers, the market will remain depressed.“ Fowles has worked with many first-time buyers over the years, and says his ultimate goal is helping them make a good investment. “New buyers often have so much emotion tied into finding that first home,“ Fowles says. “They’re not always thinking about resale value down the road, but their agent should be. I certainly don’t profess to know how much they’ll make, but I can recommend neighborhoods and areas with a good history of investment for the future. Single adults or young couples may be years away from having kids, but schools really matter when it comes to resale. If you pay too much for a niche home in an area that’s difficult to sell, you may not make much — if any — profit.“ Fowles says there are many

prices. “Realtors are already familiar with current real estate values, taxes, utility costs, municipal services and facilities, and may be aware of local zoning changes that could affect your decision to buy,“ Kremydas says. “They can often suggest simple, imaginative changes that make a home more suitable and improve its utility and value. [Buying a home] is a major commitment, and realtors are sensitive to that.“ Burton W. Fowles Jr. The Knight Company, LLC

A Columbia native and Midlands-area agent since 1996, Burton Fowles says buyers have the advantage right now. He manages sales and daily operations at The Knight Company, a locally owned agency specializing in in-town commercial and residential properties. “Buyers will continue to find great deals in the low and

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lending programs available for first-time buyers, and that a good real estate agent can guide them to the best solution. “We work with lenders that offer down-payment assistance, renovation loans and grants, and recommend lenders based on the buyer’s needs.“ Jeff Riley Russell & Jeffcoat Real Estate, Inc.

Jeff Riley is a top-producing licensed real estate broker with Russell & Jeffcoat, one of the largest residential real estate firms in the Southeast. He often hosts informative classes for first-time homebuyers, free to the public. “First-time homebuyers have a special place in my heart,“ Riley says. “They tend to have an excitement level that many repeat buyers have lost. Repeat buyers are often overwhelmed by life, simply don’t have time, and see buying a home as more of an annoying process. First-time buyers view it as an experience — almost a rite of passage. As an agent, they are just more fun to work with.“ Among many other resources, Riley shares five important tips with all first-time buyers: Educate yourself and form a game plan. “I compare buying a house to the preparation any professional athlete puts into winning a championship,“ says Riley. “A successful athlete must

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train, educate and follow a game plan to succeed. Homebuyers should do the same.“ Find an agent. “Under most circumstances, an agent is free to the buyer and can help you avoid pitfalls,“ says Riley. He notes that the relationship between buyers and agents is built on trust and wise counsel. “If an agent ever does anything that makes you uncomfortable or isn’t in your best interest, find a new one.“ Work your mortgage backwards. Instead of asking a lender how much money you qualify for, Riley suggests sharing what you are comfortable spending on a monthly budget. “Ask your lender to work that number backwards to tell you how much to spend.“ Get a home inspection. “Buyers sometimes try to bypass this step to save a few bucks, but the cost is minimal compared to avoiding a bad decision you’ll regret later. Consider it an investment.“ Realize that this market is an unprecedented opportunity. “Rates are extremely low, there’s free money available, prices have come down and the housing selection is vast,“ says Riley. “All the cards are in favor of the buyer right now, but the window is not going to stay open forever.“ Let us know what you think: Email

Your New Home Fall 2011