American Dream: With careful study, Charleston area first-time shoppers can buy the homes they desire
By JIM PARKER
The Post and Courier
The indelibly etched image of a first-time homebuyer shows an ecstatic couple, maybe holding a child, oohing and aahing over their purchase.
At least that is how it's marketed, demonstrating how families can share in the “American dream of homeownership.”
Randrea Graham, for one, says those aren't just stories. She's been there, and witnessed that.
“I see so many people; they have been told they can't buy a house, (that) we will not lend to you for 2 or 3 years,” says Graham, home purchase lending manager with nonprofit financial advocate Family Services Inc. in North Charleston.
“We work with the primary lender, help with credit,” she says. Within eight to 10 months, the first-time buyers own a home. “They get tears in their eyes,” says Graham, noting she's been invited to more than one housewarming cookout.
She says buyers exclaim, “We did it. It's the best thing ever.”
For all the glum news of foreclosures and short sales, happy-ending deals involving first-time purchasers have gone on at a level pace even during the housing downturn from 2008 to 2012.
David Kent, owner of The Real Buyer's Agent, estimates that 20 percent of his business is representing first-time homebuyers. At that rate, more than 250 of the 1,277 metro Charleston home sales in May would have involved first-time purchasers.
The individuals, couples and families just entering the market tend to be anxious, he says. “I guess it's so new to them, normally they're stretching to buy with not a lot of money to put down as equity,” says Kent, whose business is based in Mount Pleasant. Often, working couples must apply both incomes to meet lenders' financial criteria.
Kent says the local market is seeing rising home prices and declining inventory, but the figures vary from neighborhood to neighborhood.
“Under $500,000 in Mount Pleasant is a very active market; over $1 million is not the same way,” Kent says.
In dealing with first-time homebuyers, he urges them first to talk to a lender to find out what they can afford. The figure can be used as a benchmark, giving shoppers a price range in which to look for homes.
The next step is to visit with an agent to spell out their wants and needs for a home and determine how their choices match up with their funds available. Perusers must figure out how much they would be willing to pay for a property. “In this market, there could be multiple offers,” he says.
Especially with first-time home shoppers, they should feel comfortable that they can cover the costs of a house purchase as well as accessories such as furniture.
At the same time, first-time homebuyers need to know when's the best time to make an offer.
“In a hot market, the time to buy is now,” Kent says. “In a downward market, the question is when will it get to the bottom. That's the anxiety. I tell people all the time, normally people can't time the market. You never know (the bottom) until you've passed it.”
Financial considerations can't be the sole objective, though. Buyers “absolutely” should look in their price range but not necessarily jump at the first good deal if they have questions about the residence. “At some point, they find the right house,” he says.
The number of first-time homeowners is quite sizable considering everyone who has ever bought a home is a first-timer at some point. In addition, the U.S. Department of Housing and Urban Development considers residents to be first-time homebuyers if it's been at least three years since they've owned a house. Meanwhile, some people may have lived in the same house all their adult lives.
Kim Melanson was a chef on a yacht docked at Charleston City Marina in 2005 when she got the inspiration to buy a starter home on Johns Island. She later married and lives in the same place with husband Eric Melanson and daughter Jade, 5.
“It was exciting, and scary,” she says of buying a home. “I like the rural aspect of Johns Island. I love the neighborhood. It's safe.” And the house? “I'm still here after eight years,” she says.
Melanson says if she had to do it all over again, she would have spent more time researching the regions and neighborhoods and would have had an independent home inspection.
“I learned a lot,” she says. “It was a huge learning curve.”
Graham, with Family Services, oversees monthly first-time buyer workshops that draw 20 or so people a month, or 250 a year, with nearly all moving forward to buy a home. They're typically clients who are already within 90 days of buying a home. The program helps them line up the most advantageous mortgage rates and determine if they are eligible for down payment assistance.
With its range of programs, the group also can help shoppers land a real estate agent or choose a lender.
Graham agrees that first-time homebuyers should figure out their resources before eying homes to buy. That's especially the case when home prices and incomes are fluctuating.
If shoppers are looking at houses with $1,000 a month mortgage payments and they are eligible to pay $750, “You need to look at other houses,” Graham says.
Reach Jim Parker at 937-5542 or firstname.lastname@example.org.
Program: Family Services Inc. Home Purchase Program
Type of help: Workshop
Date: Third Saturday of the month (excluding holidays)
Time: 9 a.m.-4 p.m.
Specifics: Work one-on-one to learn about down payment assistance, fill out a mortgage form, get referred by a real estate agent and apply for homeowner insurance. Also learn about down payment assistance programs and lending options including 100 percent financing.
Topics: Matching mortgage programs to buyers, housing affordability, buying foreclosed and HUD properties, working with a Realtor, home inspections, fees and credit scores, down payment and closing cost assistance if eligible.
For more information: Call Randrea Graham or Revena Dawson at 843-735-7862.
Successful completion of program: May be able to receive help on mortgages for first-time homebuyers, closing cost assistance grants via the State Housing Program.
Source; Family Services Inc.