For prospective home buyers in South Dakota, we’ve developed a complete guide to finding your next dream property. Here, you’ll find everything you need to know about the home buying journey, from when to start house hunting to all the fees you should expect to arise in closing costs. We’ve got you covered.
How to Find a South Dakota Buyer’s Agent
The first step you should take when purchasing a new home is to partner with a great, local buyer’s agent for guidance and support throughout the home buying process.
A trusted real estate agent will be able to show you homes in your price range, guide you through the negotiation process, and help you close on your dream home with ease.
Clever can connect you with a top-rated buyer’s agent in your local market today. Get in touch with Clever to learn more and get connected with a Clever Partner Agent for a no-obligation consultation.
Learn More: What Does a Real Estate Agent Do for a Buyer?
South Dakota Housing Market Forecast for 2019 — and Beyond
The housing market in South Dakota is continually growing. According to Zillow, the median home value in South Dakota is $188,600. South Dakota home values have gone up 5.0% over the past year, and Zillow predicts they will rise another 2.7% within the next year. The median price of homes currently listed in South Dakota is $223,900.
Best Time of Year to Buy a Home in South Dakota
Choosing the most optimal time of year to begin the home buying journey could help ensure that you get the best deal possible. Seasonal fluctuations have a huge impact on the number of homes on the market, as well as the seller’s asking price.
For many reasons, fall is the most optimal time of year to purchase a home in South Dakota.
The Mount Rushmore State has a temperate continental type of climate with warm and moderately humid summers, and dry and cold winters.
Fall brings ideal weather conditions to the state of South Dakota; the heat of summer has just died down, and the brisk cold winters are far out of reach. This is when sellers gear up to list their homes, giving you plenty of potential homes to scout out.
Negotiations are much easier in the fall as well; sellers that listed their homes during the spring or summer months with no success are more likely to be burnt out by the time fall rolls around. If they have had their home listed on the market for months and have been unable to sell, it’s likely they will be more willing to negotiate, and ultimately coming down in price.
Learn More: When Is the Best Time to Buy a House?
Calculate Your Property Taxes in South Dakota
Property taxes are calculated based on an assessment of your property’s value. Money spent on local property taxes fund schools, fire departments, and libraries. These taxes can be a major source of funding for your city or county. Some property tax bills show details on how much of your money goes to specific government and public expenses.
Your property assessment is based on the tax assessor's estimation of the market value of your property. There are two main ways to determine the value of your home:
The assessor will compare your property to those that are similar to yours and have recently sold in the immediate area. From there, the assessor will adjust for variables that may make your property more or less valuable than those that have sold. This includes variables such as a renovated kitchen, or additional bedrooms.
The Cost Method
For this method, the assessor will calculate how much it would cost to reproduce your home from the ground up, which includes materials and labor. He will then factor in depreciation if your property is older, then add the value of your land.
Once that’s complete, your property's assessment will then be multiplied by the local tax rate, which is often referred to as a millage rate or mill rate. One mill is equal to $1 for every $1,000 of a property's value.
Different governments can charge varying mill rates. Rarely is anyone's property tax based on just one mill. Communities often determine how much tax revenue they will require in a given period, then set a mill rate commensurate with raising that amount of money through property taxation.
In the state of South Dakota, the median home value is set at $188,600. The local tax rate is 4.5%. To determine how much you will be paying in property taxes, multiply the property's value by 4.5% to arrive at your tax bill: which comes to $8,487 for the year.
It’s important to note that property taxes vary from region to region; that’s why it’s best to do the math on your specific location within South Dakota for the most accurate assessment.
For example, the median property value in Sioux Falls, SD is $191,000. The local tax rate is 4.5%, making that area of South Dakota’s property tax $8,595; which is $108 more than the state’s average.
Learn More: How to Calculate Property Taxes
How Much Are Closing Costs for Home Buyers in South Dakota?
On average, the closing costs in the state of South Dakota are about 3%. Since the median home value of the state is $188,600, you should expect to pay around $5,658 in closing costs.
A home buyer in South Dakota should expect to pay closing costs that include lender fees, escrow, form preparation, appraisal fees, home inspection fees, recording fees, and any attorney fees the buyer incurs. The buyer also pays for the pre-sale inspection.
Here’s are a few other fees to expect when closing on your new property:
Title insurance protects property buyers and mortgage lenders against defects or problems with a title when there is a transfer of property ownership.
If a title dispute comes up during a home sale, the title insurance company may be responsible for paying specified legal damages, which is dependent on the specific policy.
In the state of South Dakota, title insurance fees depend on the sales price of the home.
On average, between 70% and 80% of home buyers use a real estate agent or broker when buying or selling a home. Since agents work on commissions, they’re only paid when a home sells and don’t receive payment until after settlement.
In South Dakota, this is considered a full-service fee, and will cost you anywhere between 5% and 7% of the final sales price of the home.
Real Estate Transfer Taxes
In South Dakota, the seller usually pays the transfer taxes. The contract will specify who pays what fees, and is open to negotiation, which your local real estate agent can assist you with.
Learn More: Who Pays Closing Costs on a House?
Clever Will Help Pay Your Closing Costs!
Clever’s Home Buyer Rebate program is an additional cost savings opportunity for home buyers. Clever buyers who spend $150k and above in the state of South Dakota receive a $1k rebate to help cover their closing costs.
Clever has a nationwide network of top-rated real estate agents who have already agreed to offer a commission rebate of $1k of the purchase prices of your home. No negotiation is necessary.
Fill out our online form to learn more and connect with a top-rated, Clever Partner Agent for a no-obligation consultation.
Learn More: How to Get a Home Buyer Rebate