SC Real Estate: Have We Hit Rock Bottom?

With 2010 coming to a close, there is one burning question on everyone’s mind; Have we hit rock bottom?

In real estate, just as in any other facet of life, it is important to look at the past to see where you are going. Statistically we are in the year 2000. The party of 2005 is over and we are all dealing with the clean up.

What goes up, MUST come down. The home prices leading up to 2005 were ridiculously high. Mix ridiculous real estate prices with easy credit approvals and the outlandish belief that real estate always goes up and what do you have? Voila! The recipe for a Real Estate Market crash. We have arrived, my friends. This IS rock bottom.

Make no mistake about it, the foreclosures in the past two years have not all been due to job loss. A great number of foreclosures were simply people walking away (even when they could afford it) because they owed more than their property was worth and felt it was a “good business decision”.

No more “get rich quick”. Stabilization is here. While buying a home now is certainly a wise choice and a great investment, do not expect a quick return.

While the market is turning, it did not fall overnight and it will not rise overnight. Luckily, South Carolina did not suffer devastation to the degree that other markets did. We were fortunate.

We are sure to see a slight decrease in home prices in some areas and stabilization in others in 2011. If you are a seller, you need to list your property now to prevent any further loss.

If you are a buyer, there will never be a better time to buy. As the year progresses, we will see stricter lending practices and higher interest rates (they are climbing now), plus you will never see home prices this low again. 

For question on buying or selling in today’s tough market, contact Hope Dorn with ERA Wilder Realty at (803) 944-9544 or

South Carolina: Best Place to Retire

If mild winters, low taxes, plenty of recreational activity, and low cost of living sound appealing to you, then the Palmetto State is the best place for you to retire!

TAXES. All residents at age 65 are eligible for a deduction of up to $15,000 from income, regardless of the source. Social security and most disability payments are not taxable. People over 65 can exclude $50,000 of market value from property taxes. South Carolina does not collect inheritance taxes or estate taxes.

COST OF LIVING.  According to the Tax Foundation, SC has the 37th highest tax burden in the nation. Per capita income (in 2008 inflation-adjusted dollars) is well below the national average. The statewide average median home price in South Carolina is $121,800 (as reported by Zillow) while the national average (as reported by the US Census) is $218,200.

At age 65, you can apply for Social Security whether planning to retire or not (may apply 3 months prior to Social Security retirement age). You can also apply for Medicare (automatically eligible if qualify for Social Security benefits).
Part A – hospital insurance – free.
Part B – other medical services, which require a monthly premium. There is a penalty for late enrollment.
Medicare pays 80% of allowable charges after deductible. Individual must pay remaining 20% and any other additional charges.
Part D – Prescription drug benefit, effective January 2006.
**May be eligible for Supplemental Security Income (SSI) payments depending on resources and income. If you are eligible for SSI, you automatically receive Medicaid.

AUTO INSURANCE. Automobile insurance credit is mandated for persons who are 55 years of age or older and have successfully completed a driver training course approved by the Department of Public Safety. Contact local 55 Alive program through AARP.

EDUCATION. At age 65, free tuition at all state supported educational institutions that include state universities, colleges, and technical schools (subject to space restrictions and usual entrance requirements). To be eligible you cannot receive compensation as a full-time employee.

CLIMATE. South Carolina has a humid subtropical climate, with hot summers and mild winters.

HUNTING & FISHING LICENSE. State residents at age 64 may buy $9 senior lifetime licenses that include hunting and fishing privileges.

RECREATION. Lakes, rivers, mountains, and the ocean! With 368 golf courses, 47 state parks, and over 400 annual festivals- the possibilities are endless!

For more information on retiring in South Carolina, please contact Hope Dorn with ERA Realty at 803-944-9544 or

How to Trade Real Estate -Tax Free

Because of its favorable tax treatment, investing in real estate can be extremely advantageous.

If you are considering selling an investment property and intend to purchase another “like-kind” property with the proceeds, a 1031 exchange should be considered. A 1031 exchange is a legal provision that allows a seller to sell one property, purchase another property, and defer capital gains taxes. (Section 1031 exchange does not apply to exchanges of inventory, stocks, bonds, notes, other securities or evidence of indebtedness, ETC.) This is strictly for real estate.

How does it work?
  • Both properties involved must be investment properties and of “like-kind”;
  • You cannot experience any gain from the sale;
  • The purchase price on the new property must be equal to or more than the net proceeds from the sale of the old property;
  • You cannot act as your own facilitator. In addition, your agent (including your real estate agent or broker, investment banker or broker, accountant, attorney, employee or anyone who has worked for you in those capacities within the previous two years) can not act as your facilitator. Everything must pass through a qualified intermediary (QI);
  • The tax on the gain is deferred, not forgiven. When the replacement property is ultimately sold (not as part of another exchange), the original deferred gain, plus any additional gain realized since the purchase of the replacement property, is subject to tax.

For more information on Like-Kind Exchanges Under IRC Code Section 1031, please visit or consult with your attorney.

How a Few Hundred Dollars Can Save You Hundreds of Thousands

Title insurance protects you against financial loss due to defects in title.

Unlike life, auto,health, or homeowners insurance; title insurance coverage ends on the day of issuance and extends backwards.

More than likely your property underwent many changes in ownership prior to you contracting to purchase. Title insurance ensures that should a dispute ever arise, your equity is protected. (e.g.: forged deeds, inadequate legal descriptions, improperly recorded legal documents, defective acknowledgements, ECT.)

Although your closing attorney will search your title before closing, (typically the search is 40 years for residential and 60 years for commercial) disputes can still arise. No search is altogether dependable. This is why lenders require a lender’s policy. They want their interest protected!

While the lender will require a policy to protect their interest, this does not protect your interest. You will need an owner’s policy to accomplish this. 

Once you purchase your owner's title insurance policy, your interest is protected indefinitely. There are no further premiums. If you decide to refinance at a later date, the lender will require a new lender’s policy be purchased. This is because their policy terminates once you pay off the old mortgage. The owner’s policy remains in place.

Title insurance is relatively inexpensive. Purchasing an owner’s title insurance policy is a wise decision and one that you will surely never regret. It is amazing how a few hundred dollars can save you hundreds of thousands.

Stop Borrowing TROUBLE- 10 Steps to Healthy Credit

Mortgage lenders are in the process of raising credit score requirements from 620 to 640. Raising your credit score is more important now than ever! Further, it is estimated that the lifetime cost of poor credit is in excess of $200k.

Please review the following steps to ensure you are doing what you should be to stop borrowing trouble:

1.)   Obtain a FREE credit report at: FREE CREDIT REPORT

2.)   Dispute all inaccurate information to the reporting credit bureau(s). The goal is to make sure all information on your report is correct.

3.)   Dispute collections accounts with the credit bureaus as “not mine” or “unjust charge”. (eg: an unfair cell phone bill that went unpaid) The older and smaller a debt that has been sent to collections, the more likely the collection agency will not investigate your dispute.

4.)   Once you are financially able, start settling old debt. Contact the creditor and negotiate what you can afford. Once you reach an agreement, request that the creditor report the debt as, "Settled in Full" or "Paid in Full." Make sure you receive a copy of the settlement agreement.

5.)   Pay your bills on time.

6.)   Limit the number of inquiries on your credit.

7.)   Keep your credit card balances below 30% of their limit.

8.)   Use your oldest credit card. The older your credit history, the better!

9.)   If you’ve been a good customer, a creditor may agree to remove a late payment from your credit report. Make the request in writing. It never hurts to ask.

10.) Stay away from those companies that promise to "fix your credit".

How's the Market?

In an article published on June 24, 2010 and entitled America's Most Recession-Proof Cities,, Columbia, SC ranked the 6th strongest performing metro area by Brookings Institution.

Since Columbia and surrounding counties did not experience a housing bubble collapse that so many markets did during the financial crisis of 2007-2010, its market is fairly stable.

While sellers are not walking away from the closing table with tens of thousands in profit, like they did at the height of the market, most are able to sell at a reasonable price and within a reasonable time frame. Cities such Las Vegas and New Orleans have not been as fortunate.

Columbia, South Carolina continues to be a great place to live!

How To Be An Effective Seller

Price your home right.  While everyone would like to walk away with a large profit, the price you place on your home is essential. Since the first few weeks a home is on the market is the most crucial, you need to price it right immediately. If your home is priced too high you will lose exposure during the first few weeks of the listing. Of course you can always reduce it later. However, you will have lost the original listing period and your opportunity to sell quickly.

Make sure you home shows well. Look at your home from a buyer’s standpoint. Your home should be clean and remain that way for the duration of your listing. Touch up paint where necessary. Do whatever it takes to make your home look bigger. This includes de-cluttering the entire house…even the closets and kitchen drawers. Remove furniture if necessary. The bottom line is if you’re not using it, pack it up and store it away. You’re moving anyway!

Make sure your home is easy to show. When buyers are hot, they are hot! If you are called at 3pm for an immediate showing, make it happen. Chances are, your home is not the only home on the buyer’s list and the next house shown may be the one that gets the offer.

Marketing. This is key. If you are trying to sell your home on your own, chances are it is not being marketed well. You do not have access to the marketing tools that a licensed real estate agent has, plain and simple. Further, neither does discount brokers. After all, there is a reason they are discount brokers.

How Do You Want to Hold Title?

This is a question that should be asked by your closing attorney prior to your real estate closing, but if it is not, you should make sure that you are taking title the way you intend.

There are three ways to take title to real property in South Carolina:

1.)    Sole Ownership. When a person hold title this way, upon his death, title is passed to whoever s/he has named in their Will. If there is no Will, title will be passed to his/her heirs.

2.)    Tenants-in-Common. Two or more people who take title to property usually take title this way. Tenants-in-common do not have to own equal interest in the property. For example one owner may own ¼ and the other may own the remaining ¾. However, each owner has an undivided interest. For example, it cannot be broken down into, “you own two bedrooms and I own three bedrooms”, unless there is a separate agreement. With this type of ownership, one person can sell his/her interest to a third party without the consent of the other owners. More importantly, when an owner dies his/her interest is passed on to whoever is named in their Will. If there is no Will, interest will pass to his/her heirs. Even when a husband and wife take title this way, the property still has to be probated.

3.)    Joint Tenants with Right of Survivorship. This is the most common way that married people take title, although you do not have to be married to take title this way. The most important feature of holding title this way is that if one owner dies, the other automatically takes the deceased persons interest in the property. The property does not have to be probated.

If you do not specifically ask the closing attorney to convey title as Joint Tenants with Right of Survivorship, s/he may prepare a Deed that leaves you holding title as Tenants in Common and not as Joint Tenants with Right of Survivorship. Make sure you have the attorney review the Deed with you prior to recordation.

S.C Attorneys Violating Attorney-Client Privilege?

As of January 1, 2010,  HUD requires that loan originators provide borrowers with a standard Good Faith Estimate that discloses all key loan terms and closing costs and that the “settlement agent” provide the borrower with a copy of the new HUD1 (this includes the borrower's Good Faith Estimate, key loan terms, interest rate, etc.). The Seller is also given this document for his/her signature and provided with a copy.

In South Carolina, the “settlement agent” is an attorney and the buyer is always represented. Please note that in the case of a dual representation disclosure, an attorney may represent both parties to the closing but still owes the duty of confidentiality to both.

As far as I know, there are no documents produced for a closing that are of public record that disclose loan terms, interest rates, etc.

In the past closing attorneys separated buyers and sellers so as not to disclose the buyers confidential loan information to the sellers. After all, this information really isn’t any of the seller’s business.

Are the new RESPA regulations forcing South Carolina attorneys to violate the attorney-client privilege?

Looking for a deal?

You are not alone.

Everyone is looking for a real estate bargain in today’s market. While buying a foreclosed home is certainly an option--- that is just what it is…an option. By only viewing foreclosed homes, you are doing yourself a huge injustice.

There are MANY motivated sellers out there who are pricing their homes at a discount in order to get them sold. In fact, nearly 30% of listed homes owned by individuals have had at least one price reduction. There is also the possibility of purchasing a home through short sale. Further, when you are working with an individual, you can negotiate repairs, warranties, and closing costs. There is little flexibility in negotiating with the banks.         

Make sure you view ALL homes in the price range you can afford and never underestimate the value of purchasing from an individual on your quest in finding a deal.

Listing Your House During the Holiday Season

Waiting until after the New Year really is not the best decision.

Consider this. During the winter months, there is far less competition. By listing during this time, you are able to sell high. When Spring rolls around, the market picks up and you will have the opportunity to buy low. It’s all about supply and demand. Less inventory means more demand. More demand means more money in your pocket. Sell high, buy low!

Even though your home is listed during the holidays, restrictions can be set on showings and houses actually show better when decorated for the season. Further, buyers are more emotional during this time and are more likely to buy.

It’s amazing how tire-kickers disappear during the winter months. Folks looking during this time are serious buyers.

In short, selling during the holidays is a smart choice!