NC is a popular place to live! Many polls rank it high for livability, and we agree. Between the beaches, the mountains, and the tasty BBQ that we’re known for, NC has always been a popular vacation spot. But now, it’s becoming a relocation destination as well, from snowbirds escaping northern winters to an influx of tech folks leaving Silicon Valley and other regions where real estate is extremely pricey.
The Triangle, made up of the cities of Raleigh, Durham, and Chapel Hill, has a population of just over 2 million and is equidistant between the mountains and the beaches. Raleigh consistently shows up on lists of best places to live, and data from moving companies backs up the increasing numbers of new residents.
There are many big-city amenities our residents enjoy, including international airport RDU, innovative chefs and dining experiences, parks, greenways, and outdoor activities that take advantage of our moderate weather and temperatures.
What’s it like to buy a home in the Triangle? Here are the basics for buying a home in NC, including some advice on handling a “hot” market.
Using our advanced home search, create a search with all of the requirements for your new home. Make sure to adjust the price range, location, year built, and any other important criteria so that your listing alerts match your conditions. Keep yourself organized by adding each home that you are interested in to your "favorites" list. If nothing catches your eye right away, be patient! New homes are listed every day.
When are you are ready to compare homes in person, contact us to set up an initial consultation and showing schedule.
It’s always best to get a pre-qualification letter from your lender ahead of time. This saves a lot of time and enables you to move quickly when you find the right home. If you need recommendations, we can point you in the right direction. For more information on the home loan process, please click here. First-time home buyers may qualify for affordable housing programs in North Carolina.
When you find the right home, you submit an offer to purchase and then negotiate verbally with the seller until an agreement is reached and the new offer to purchase is signed by both parties and you are “under contract.”
This is the time you perform any needed inspections and, if you’re financing, the time when the bank appraises the property. You will put a due diligence deposit down, traditionally between $2000 and $5000. The due diligence money is separate from “earnest money” and is tied to the health of the market and the number of other offers, so in a highly competitive market, the due diligence can be much, much higher (we've seen $100,000).
Here’s where NC is different from other states. If you close on the property, the due diligence deposit is applied to the total sale price. But if you terminate - for any reason - you lose the due diligence monies and other money you may have paid for inspections or appraisals. This provision is designed to protect sellers who are taking their property off the market to allow you time to complete due diligence. It is a hot topic, but one that the Real Estate Commission has stated they do not intend to change any time soon.
After the due diligence period ends, you are in the “pending closing period.” This is the time when the lender provides a loan package and closing statement, which has all the charges associated with the purchase and gives you the dollar amount to bring to closing.
Technically the standardized offer form says that buyers are purchasing as-is, however most buyers and sellers do conduct some repair negotiations. The seller is not required to make repairs, but they are incentivized since if the buyer backs out of the contract their seller's realtor is required to disclose all repairs that came up during the due diligence period.
Depending on your attorney, closing usually takes about 20 minutes for a transaction without financing and 45 minutes with financing. You will need to bring all monies needed (usually in the form of a wire) and your driver’s license to closing.
Buying a new home is very different from a resale purchase, so we created a special guide for this process, available here: New Home Guide For NC. New Home Guide For NC.
If the builder hasn't started on the home, the average is between 6-12 months depending on which builder it is and the size of the home. Sometimes builders already have the permits or have the foundation done for a home, in which case the time would be shorter. Builder's also carry inventory homes, which are homes they have completely built already. These you can buy in a normal timeframe (30 or so days).
One thing to keep in mind is that with new construction I always recommend clients add an extra 1-2 months on the quote the builder gives them. It usually takes a little longer!
It's hard to time markets! Overall, it's best to buy when you know you will hold the property for a long time (experts recommend at least 5 years, but more is better).
If you wait to see prices drop, you could be waiting for several years. Once prices do drop it's also hard to know when the market has picked up again. Housing is a long-term investment, so it’s smart financially to purchase when you could see yourself in the home for at least 4 years. This is the time period that's generally accepted as a safe period to recoup transaction costs and still beat renting. The most important thing to keep in mind is that the Raleigh-Durham market is expected to grow over the long term so any long term property investment should do well.
Here’s another factor to consider. Every neighborhood in every city is actually its own market. There are slow neighborhoods in hot markets, and hot neighborhoods even during a buyer's market. The market is different within each city, which is why it’s helpful to have an agent who is familiar with each area. I have the good fortune to have lived in each of the 3 cities that make up the Triangle (Raleigh, Durham, and Chapel Hill) and am familiar with these areas.
Finally, when the 2008 housing crises hit it took roughly 2 years for the market to recover in the Raleigh/Durham area. This gives you an idea of how long you would need to hold the property in the event that happens again, which hopefully won't happen but it's always smart to prepare for the worst!
Although the market is more balanced than it used to be, sometimes certain homes can still go 50-100k over the asking price. Luckily that's more rare than it used to be, and even with hot properties the offers are typically more in the 25-50k over asking price range.
Because of my experience with real estate in the Triangle, I can take an address you’re interested in and give you a fairly accurate idea of how much over or under asking a house might go for. I can also help you figure out where your comfort point is. Let’s say you find a house you really want, and you ask what the chances are of successfully buying the house. I can advise you at different price points, so if you go “x” over, you have a 50% chance of getting the house, but if you can extend to “y,” your chances go up to about 90%.
An appraisal gap is where you’re paying what the market will bear, but the banks - although they consider the popularity of a market - still appraise under your purchase price. In less competitive markets, sellers might be willing to negotiate on the difference, but that’s not likely in a highly competitive setting.
It’s important to note that in North Carolina, the sale of a home is not contingent on a satisfactory appraisal. If the appraisal comes in lower than the contract price, then the buyer is not automatically let out of the contract. This is also where due diligence money comes into play again because if you back out of the deal, you lose the due diligence money.
This is more rare than it used to be, since the market isn't as hot. Some properties though are still very competitive and buyers will waive asking for repairs (usually they still do inspections).
The risk with this is proportionate to the age of the home. The newer the house, the less dicey it is for the buyer because building code improvements means fewer potential issues on average. So, if you’re putting $15k due diligence money down on a two-year-old house, that’s a safer choice than the same money down on a 50-year-old house.
If you have any questions about the process, or how to adjust your daily search alerts, please feel free to contact me at trianglehousehunter@gmail.com or 919-696-4254.