Here’s what Buyers want to know about purchasing a vacation home.
How much down payment is required to purchase a vacation home?
On a vacation home, lenders usually want the buyer to put in a minimum of 20% of the purchase price. When a Jumbo Loan is required for borrowing higher priced homes, lenders look for the buyer to put down at least 25% of the purchase price.
What kind of offer price should I make?
Ask your agent to provide you with price data of comparable homes that have sold in the last six months or so. What current prices were paid for a similar house? Your agent can advise you on the length of time the house has been for sale, the overall market temperature and any nuances he might know about the property. The decision of what price to offer is left up to you.
If problems come up with the home inspection, how do we handle repairs to the house?
Immediately after the buyer and seller sign the purchase agreement, the buyer will engage a professional home inspector to thoroughly examine the property and create a report on its condition. Your agent can give you names of recommended inspectors. No home is perfect, and usually the inspection will find items that need repair or replacement. If they are significant, the buyer may ask the seller to assist with some or all of the fixes. The buyer’s agent often has to negotiate with the seller’s agent to reach an agreement on handling the repairs that is satisfactory for both sides.
What if I don’t like the inspection report, find a better house, or change my mind about buying?
In North Carolina real estate law, the buyer may designate a “Due Diligence” period during which he may inspect the property and determine its suitability. The buyer is not obligated to complete the purchase if he decides to terminate the agreement during the designated Due Diligence period. Any earnest money paid would be returned to the buyer.
How does the arrangement with a rental company work?
The rental agencies work on behalf of home homeowners to market the property to rental customers and to be the point of contact for all the arrangements necessary to service the rental of your home. They are paid a percentage of your gross rent.
Are the furnishings in the house included in the sale?
As a convenience to the seller, generally, the personal property in the home is conveyed to the buyer. This includes the furniture, decorations, accessories, electronics, even the pots and pans in the kitchen. Sellers may exclude some items that they wish to keep by designating these in writing.
How far will my rental income go to cover the cost of owning the house?
Rental income makes owning a home viable for many buyers. Some choose to reserve the house for their own use, or rent it on a limited basis. Your agent can give you the rental income history of the home you are considering and factor the potential income against the expenses and cost of ownership.
What will be my typical expenses for the house?
The historical costs of utilities, insurance, taxes, and house expenses can usually be obtained for you by your agent so you can predict what future costs will be incurred.
Once my offer to buy is accepted by the seller, how long does the purchase process take?
Allow for an average of sixty days from date of contract to complete all the necessary steps. The financing aspect takes the majority of the time, so with a fast-track loan or cash purchase the process can be completed in a few weeks.
Do I have to be present at the attorney’s office for the closing?
Most buyers and sellers live outside the Outer Banks, so it is customary for sales transactions to be handled long distance. Local attorneys handle “mail- away” closings using email, electronic signatures and express mail. You are welcome to participate in person but it is not necessary. Your agent can handle most of the local arrangements for you.
When is the best time of year to buy?
Real estate sales are spread throughout the year, but many buyers like to purchase in the Spring in order to capture a full season of rental income. With interest rates so low, and home prices at their most affordable, right now is the time for buyers to get a good deal.