Are you wanting to settle down in Charlotte? If your heart is set on this city, the next step is figuring out how to buy a house in Charlotte. The good news is that you’ll have a lot to choose from. According to Redfin’s insight, buying a house in Charlotte may mean there’s a decent amount of competition involved thanks to an adequate job market growth, demand for housing, and plenty of home buyers like yourself.
Charlotte has experienced a booming housing market that has, for the most part, been unaffected by the pandemic. Of course, it’s no mystery as to why so many people want to begin living in Charlotte, NC. The vibrant city of Charlotte is home to warm weather, low taxes, endless amenities, friendly residents, and a remarkably high quality of life.
Nonetheless, there are things you’ll want to be aware of such as Charlotte’s overvalued and growing home prices. Charlotte home values have risen over 28% in 2022 so far compared to the 14% nationwide. Of course, if you’re an investor, this isn’t a negative thing at all. Regardless of your intentions, there’s no doubt you can find a suitable home in Charlotte as long as you journey through the correct process to get there.
We understand that any home buying process isn’t a piece of cake. There’s a lot of time, research, and decision-making involved. That’s why we’ve put together this article that will guide you through everything you need to know about buying a house in Charlotte.
Steps to Buying a Home in Charlotte
Buying a house in North Carolina for the first time? Not sure about what to expect with the Charlotte real estate market? We’ll take you through the step-by-step process of buying a house in Charlotte along with the market statistics.
How Much Can You Afford? How Much Does it Cost to Buy a House in Charlotte?
It’s easy to get excited about Charlotte home buying so much that you get carried away. The last thing you want to do is overlook the crucial step of determining what you can afford to pay.
You can begin your home buying budget by figuring out your current debt payments and gross monthly income. You can subsequently apply the standard 28/36 rule that is often used by lenders. This rule suggests that your mortgage payment shouldn’t surpass 28% of your monthly gross income whereas no more than 36% of your gross income should go toward debt payments. Take note that HOA fees, principal, homeowner’s insurance, interest, and property taxes are included in the mortgage payments.
To calculate the maximum amount you should pay for housing, multiply your gross monthly income by 28%.
Although the 28/36 rule is highly useful, it should stand as only the very beginning of the process. Also, keep in mind that homeownership comes with hidden costs that can add up quickly.
Charlotte HOA fees can be as much as $600 a month depending on the location and home. The average premium homeowners insurance in Charlotte sits at $1,131. If you’re wanting a 30-year fixed loan in Charlotte, expect to pay a mortgage rate of 4.96% and 4.21% for a 15-year fixed loan. Charlotte has a property tax rate of 1.3119% per $100 which means that a house valued at $200,000 will have a $2,624 annual property tax bill attached to it.
How is the Housing Market in Charlotte, NC?
With the housing market in Charlotte being somewhat competitive, another important factor to remember before buying a house here is that the housing market in Charlotte is among the top ten most overvalued in the country according to researchers from Florida International Universities. In fact, the rising home prices have caused many houses in Charlotte to be overvalued by up to 50%! Mortgage rates are also expected to increase in the next year which could cause the house prices to plateau. Considering this, the inventory in Charlotte is 24% below what it was last year and you’ll be competing against many cash investors. The best way around this is to be willing to move quickly with an offer and have loans ready in advance.
What are the Average House Prices in Charlotte, NC?
Hopefully, you now have a better understanding of what you can afford while still leaving space for taxes, insurance, and additional expenses. The next step is figuring out the cost of your desired home and what you can get that stays within your budget.
The median price of houses for sale in Charlotte is $382,000– up 20.3% year-over-year. This is a bit above the U.S. median sales price of $412,000 which is up 17.1% year-over-year. The average sales price for Charlotte homes for sale sits at $383,000 whereas the average price per square foot is $221– a 25.6% increase since last year. Houses in Charlotte are on the market for a median of 26 days. If you’re thinking about buying a condo, the median sales price for condos in Charlotte is $310,000.
On the flip side, Charlotte has a cost of living that is around 5% lower than the national average. According to the Economic Policy Institute, this means that a family of four living in the area should be making about $85,510 to live the most comfortably.
As you probably know, home prices are dependent on the neighborhood and type of house. Here’s an idea of what to expect with median home prices of homes for sale in Charlotte’s most desirable neighborhoods:
- Uptown, NC: $385,000 ($373/square foot)
- SouthPark, NC: $475,000 ($259/square foot)
- Ballantyne, NC: $347,500 ($218/square foot)
- University City, NC: $335,500 ($184/square foot)
- NoDa, NC: $415,000 ($324/square foot)
- Myers Park, NC: $1,175,000 ($427/square foot)
- Cherry, NC: $341,000 ($360/square foot)
- Plaza Midwood, NC: $645,000 ($381/square foot)
Find the Right Mortgage and Get Pre Approved
As soon as you’ve come up with a realistic budget, the next step is qualifying and getting pre-approved for a mortgage. The house hunting should be subsequent to the pre-approval so sellers will take your offer seriously and you are aware of what you can get approved to borrow.
Deciding on a lender and mortgage program should be based on your circumstances. If you are a first-time home buyer in Charlotte, an FHA loan may be a good option. But due to the expensive mortgage insurance premiums, these FHA loans are often more pricey. A conventional home loan may provide lower mortgage payments and better savings if your credit score is good.
Below are the basic requirements to buy a house in North Carolina and get approved for a mortgage:
- Satisfactory credit. Most lenders require a minimum credit score of 620.
- Ability to repay. Stable employment without a change of employers in the last year is typically required as well as a DTI of 43% or less.
- There is a 3% minimum down payment on a conventional mortgage. If you’re eligible for a VA loan or a USDA loan, a down payment may not be required.
- The down payment and closing cost funds are sourced (lenders can see where the money is coming from) or seasoned (your account has withheld the money for 90+ days).
- If you plan to use a relative’s gift money, you’ll need a gift letter.
Explore Charlotte First Buyer Programs
Buying a house in Charlotte for the first time? A first-time homeowner program in Charlotte can make homeownership more affordable. Take a look at some of them below.
- HouseCharlotte Program. The program provides up to 3 months of mortgage payments (principal, interest, taxes, and insurance) of up to $47,150.
- Charlotte Mortgage Relief Assistance Program. The HouseCharlotte program provides 5-year,10-year, or 15-year deferred, forgivable loans to qualified applicants.
- Community Heroes Homeownership Program. This program is for public school employees, frontline essential workers, and local first responders that will provide them with up to $30,000 in down payment assistance.
Find a Charlotte Real Estate Agent
A good buyer’s agent will help show you homes, find the most suitable neighborhood, negotiate with you, and offer professional insight and guidance.
To choose the best Charlotte real estate agent, you can start by interviewing several agents with experience with your circumstances and what you are interested in. Make sure they represent you well and make time for excellent communication.
Go Charlotte House Hunting
After you and the buyer’s agent sign the contract, let the fun part begin!
The best place to buy a house in Charlotte will be based on factors like schools, location, lot size, style of home, size of the property, and so on. You can make a list of all these features you want in your new home while keeping in mind your current and future lifestyle, budget, and priorities.
Check out these guides that help Charlotte home buyers determine which is the best place to buy a house!
- Safest neighborhoods in Charlotte
- The best neighborhoods in Charlotte
- Top 55+ communities in Charlotte
- Best Charlotte Suburbs
- Charlotte vs Raleigh —which should you choose?
Submit an Offer!
When you find the right home, your next step is to make an offer! Considering the competition, this can be an anxious experience.
Along with helping you to review comparable home sales and the best possible offers, your agent may also recommend strategies for competition including:
- Starting with your best price
- Reducing contingencies
- On the home inspection, making an as-is offer contingent, so the seller won’t stress over delays or repairs
- Offering a rent-back clause
Understanding real estate statistics during this process. Charlotte, NA homes for sale are on the market for 26 days whereas 60.4% sell over list price. 12.4% of homes for sale in Charlotte experience price drops.
After you submit your offer, the seller can accept it as-is, reject it, or make a counter-offer–the most common. The seller may request fewer contingencies, higher sales price, reduced seller assistance, or they may reject your request of performing repairs or giving your desired credit.
You are officially under contract once both parties agree and the purchase agreement is signed!
Close on your new Charlotte Home!
Before you close, there’s more to do after your offer is accepted. Within a time frame, you’ll have to perform due diligence based on the agreement such as completing the home inspection, getting an appraisal, and so on. Your earnest money will have to be deposited and in order to secure your mortgage, you’ll have to go through underwriting.
As soon as the financing is set and the contingencies are met, the closing date will be set. Before signing the paperwork and getting your new home keys, you’ll have the opportunity of doing a final walkthrough of the home.
Congratulations on buying a new home in Charlotte! Whether you’re in need of downsizing, packing, or transporting, we’re here to help! Give our professional moving team at Make A Move a call at 704-378-8588 for a free and affordable moving quote.