When buying a house in West Virginia, you might be attracted to the low prices or the growth occurring in the major cities. As a state that’s seeing job growth, it’s becoming worthwhile to look into the long and complex process of buying a home. However, if you don’t do your homework or don’t have an experienced local agent in your corner, you’re likely to overpay.
Before you get too deep into the home buying process take steps to prepare for becoming a West Virginian homeowner.
Step 1: Evaluate Your Current Financial Situation
Before you start looking for a house, clear up your financial situation first. It’s vital that any interested home buyer knows what their credit score is, how much savings they have to put into a down payment, and where to get financing.
Your credit score is going to determine not only how much money you could be getting but also how much it’s going to cost you to borrow it. Your credit score is going to determine the interest rate that you’re offered by lenders. Credit scores show how responsible you’ve been with money in the past but if you can get yours in good shape, you can prove you’re a reliable loan holder.
Your savings are going to come into play as a way to show what you have in assets and to pay your down payment and closing costs. Your down payment is going to be around 20% of the total cost of the house. Otherwise, your lender could ask you to pay for private mortgage insurance to protect them against you defaulting, causing you to pay potentially hundreds of dollars a month extra.
Your home value will improve over time, meaning your property tax burden could as well. Your home is going to be a valuable asset but you need to make sure that you’re ready to take on the costs of maintenance and upkeep. If you’re not planning to be in West Virginia for long, you might not want to plant roots yet.
Learn More: 7 Requirements You Need to Meet Before You Can Buy a House
Step 2: Find a Great West Virginia Real Estate Agent
It’s absolutely vital to find an experienced local agent who you feel like you can trust. When seeking out an agent, finding the best one shouldn’t be a matter of cost, given that their commission fees will most likely be paid by the seller.
Finding an agent who knows the ins and outs of your local market is vital. We can connect you with a Clever Partner Agent from right in your backyard. They can ensure that you find a home that’s within your budget and help you to negotiate the best price.
Finding a local agent gives you access to a comparative market analysis and Clever’s own Partner Agents will throw in a no-obligation consultation. At closing, they’ll help you to qualify for a $1,000 home buyer rebate to help cover costs.
Learn More: What Does a Real Estate Agent Do for a Buyer?
Step 3: Read Up on Local Real Estate Market Trends
Knowing what’s happening in your neck of the woods is essential to making a good decision about the best part of West Virginia to move to. With the median home values around $97,300, most homes in the state are still affordable, even though values have climbed in the past years. The housing market could start growing by even bigger leaps in the coming years as housing supply dips and demand goes up.
While homes stay on the market for longer in West Virginia than in other parts of the country, the gap is starting to close. As opportunities grow in the Washington, D.C region and in northern Virginia, that growth will spread to West Virginia.
In Charleston, home prices have seen massive jumps, by more than 50% over 15 years. A home that was worth just over $90,000 15 years ago could now be selling for more than $150,000 in the city.
Huntington is another city with a growing housing market. While prices dropped immensely just a few years ago, they’ve come back in a big way, doubling in some cases. Ohio River-front property never goes out of style.
Prices fluctuate between cities and even between seasons. That’s why it’s so important to have an experienced local agent by your side. They’ll guide you to find the best time to purchase so that you end up with the best price possible.
Learn More: Will it Be a Buyer’s or Seller’s Market in 2019?
Step 4: Get Pre-Approved for a Mortgage
Getting pre-approved is a powerful way to show sellers that you’re ready to take the plunge and that you won’t have trouble securing financing. When you’re pre-approved, you have paperwork to show that you’re ready to commit.
Some people throw around the terms “pre-qualification” and “pre-approved” interchangeably, but they’re not the same. In fact, pre-qualification is more of a first step to getting pre-approved.
When you pre-qualify, it means that you’ve reported your financial history to your lender giving them information about your income, debts, assets, and your credit score. What makes pre-qualifying different from pre-approval is that you can self-report this information.
If you want to be pre-approved, you’ll have to supply real proof of all of the information that you’re claiming. The documentation must verify that you have access to the assets you claim.
You should avoid applying for pre-approval on a whim though because each time you do it, you’ll be hit with a hard inquiry on your credit report. Too many of these can take your score down a few pegs.
Learn More: Pre-Approval vs Pre-Qualification: What’s the Difference?
Step 5: Start House Hunting
Once you know your financial limits and are ready to prove to sellers that you’re qualified to buy, it’s time to start hunting for your home. Make a list of your must-haves, figure out your budget, and then decide where you want to search.
There are going to be some general must-haves that you’re going to want. These may include a garage, basement for storage, a certain number of bedrooms, and adequate sunlight. While you might be tempted to get more specific, you need to avoid things that don’t matter. The color of the walls isn’t as important as the appliances the home comes with or the condition of the HVAC system.
Once you have your list, you need to ensure that it matches up with your budget. You’re not going to get an inground pool and solar panels if you can’t afford the median home value in a region. A good guideline is to make sure you’re not spending more than 35% of your total net income.
The area that you decide to move to is going to factor into your budget. If you’re looking for good schools but can’t afford the best region of Charleston, you might have to look for a nearby region of West Virginia. Most importantly, stick to your budget because going bankrupt on a house you’re trying to pay off is only going to make your financial situation worse in the end.
Ask your agent which tools are best to browse on. Every agent will have their own preferred search tool but Zillow Research can help you find places with median values that match your budget. You’ll also get information about school districts and long-term returns.
Ultimately, an experienced local agent is going to be your best resource during this period. They have their ear to the ground and know where the deals are.
Learn More: Free House Hunting Checklist
Step 6: Make an Offer
When you find a place that you’re interested in, you’ll probably want to make an offer that’s lower than the asking price. Your agent is going to start by reaching out to see if there are any current offers on the table or any pending. If there are, you’re going to have to offer more than the asking price to compete.
The seller might come back with a counteroffer or a rejection of your offer. If they have a counteroffer, then you need to decide whether or not that works for you. This might be your last chance to submit a counteroffer, so if you don’t accept their offer, let your agent guide your decision.
Set your expectations carefully and if you think someone could buy this property out from under you, make sure you don’t make an emotional decision that disregards your budget. Let your agent submit a competitive letter, which will be more likely be accepted.
Learn More: How to Make an Offer on a House
Step 7: Inspections and Negotiations
Before you agree to buy a property, it’s vital that you have a home inspection done. While most states require legal disclosures that let you know of issues with the property and most home sellers act in good faith, they don’t always catch every problem. Most homeowners know nothing about the current state of their foundation unless it’s in serious trouble.
An inspection allows you to find out about what’s in store and also might give you the chance to lower the price. If you find that something crucial to the home needs to be repaired, you can ask for “seller credits” where the seller is willing to lower the price you have to pay on the home.
When you hire an experienced local agent, they’ll know what problems homes in the region are known for and how to negotiate if they find a problem. This gives you the chance to push back on the price and still get a home that you’re excited about.
With the increase of natural gas production in the state, an inspection will look at the property as a whole to check for potential issues as a result. Termite inspections are another reality in West Virginia and your agent should be able to guide you through that.
Learn More: 3 Ways Inspections Help Home Buyers Get Better Deals
Step 8: It’s Closing Time!
In West Virginia, like many other states, a representative is required at the time of closing. You could hire an attorney or a rep from a title company to act as your settlement agent. They will prepare all the documents you need and facilitate the transaction.
The closing process is pretty straightforward but there are many associated costs that come with closing. Recent data from Bankrate estimates West Virginia’s average closing costs to be around $2,213 but this number doesn’t tell the whole story.
You’ll have to deal with the aforementioned agent commissions as well as the cost of your attorney. As the buyer, you have to cover the transfer taxes in the state if you’re buying new construction. You’ll also have mortgage fees and escrow costs to pay for during the closing.
Overall, expect to pay at least 3% of the sale price in closing costs. With the average Charleston listing being $169,000, this is going to be more than $5,000 that you have to cover during the closing.
Rates vary from market to market and you don’t want to end up on the hook for something you don’t need to pay. An experienced Clever Partner Agent is going to be able to help you determine exactly what your costs are going to be and help you navigate the process to avoid overpaying.