Now that the housing market is finally calming down after the pandemic, buyers are facing a new challenge: Soaring mortgage rates.
In South Carolina, the average 30-year fixed mortgage rate is 5.54% — up from 2021's historic lows. This raises the average monthly mortgage payment to $1,365 (assuming a 20% down payment at the median home value).
But buying a home in South Carolina is still possible, even for first-time home buyers. Many markets are seeing frequent price drops and fewer offers, giving motivated buyers the upper hand in negotiating for the best price.
In this guide, you’ll learn how to buy a house in South Carolina with confidence no matter what the market brings. Learn why you can trust our advice.
Whether you're actively house hunting or just starting to browse homes on Zillow, it's never too early to find a great local realtor to guide you on your search. An experienced agent can help you navigate a tricky housing market, explore your financial options, and negotiate the best deal possible.
Best of all, hiring a real estate agent comes at no extra cost to you — since the seller typically pays both their listing agent and your buyer's agent.
Ready to find a great local realtor, but not sure where to start? The best (and easiest!) option is to try a free agent matching service like Clever Real Estate. Answer a few simple questions about your home buying goals, and Clever will match you with hand-picked agents from Keller Williams, RE/MAX, and other top brokerages in your area. Find a top local agent and make your home buying dreams a reality today!
Step 1: Save for a down payment
Your down payment is the first part of your home's purchase price that you pay at closing. Your mortgage lender will pay the remaining balance.
Typically, mortgage lenders in South Carolina want you to contribute 20% of the purchase price as a down payment. That would be $59,835 for a $299,173 home — the typical home value in South Carolina.
However, you have options to lower your down payment amount.
Government backed loans, like VA and FHA loans, allow you to contribute 0% and 3.5% of your home's purchase price respectively. Even conventional loans allow for down payments as low as 3-5% (though the minimum varies by lender).
Minimum down payment (%)
Down payment ($)
Based on typical home values from Zillow (August 2022)
But making a down payment of less than 20% comes with some risks.
First, because you're borrowing more money, you'll have a higher monthly payment and pay more in interest over the life of your loan.
Based on home values from Zillow (August 2022) and a 5.54% interest rate for a 30-year loan.
Second, you may have to purchase mortgage insurance.
Conventional loans require private mortgage insurance (PMI) until your loan balance reaches 80% of the purchase price. FHA loans, on the other hand, require a mortgage insurance premium (MIP) for the life of your loans.
Mortgage insurance costs around 1% of your mortgage balance annually. However, rates vary based on your down payment and credit score. Typically, your mortgage insurance payment is added to your mortgage payment each month.
VA loans don't charge mortgage insurance. Instead, you'll pay a VA loan funding fee at closing, which can range from 1.4% to 3.6% of the purchase price.
South Carolina down payment assistance programs
There are several down payment assistance (DPA) programs throughout the state that can offer financial aid to first-time and low-income homebuyers. If you're eligible for one of these programs, you could receive a grant or a second mortgage to cover closing costs or a down payment.
Check out these resources and find out if you qualify for assistance:
SC Housing Homebuyer Program
SC Housing's Homebuyer Program offers a forgivable DPA option for eligible borrowers. The financial aid can come as a 0% interest 10-year or 20-year mortgage, depending on the household income.
Eligible participants must occupy the property for the duration of the loan in order to have the mortgage completely forgiven.
SC Housing Palmetto Home Advantage Program
The Palmetto Home Advantage Program also offers forgivable down payment assistance of up to 5% of the loan amount. The financial aid is a forgivable 10-year loan that accrues no interest.
This program is available to first-time and repeat homebuyers who have credit scores of 640 or higher. Home purchase price and household income limits apply and vary by county.
SC Housing County First Initiative
SC Housing's County First Initiative offers forgivable financial assistance of up to $8,500. This program is available to first-time and repeat homebuyers, but certain counties in South Carolina are not eligible.
Household income and home purchase price limits apply and vary by county.
U.S. Department of Housing and Urban Development
You can find additional DPA resources in South Carolina through HUD here.
Step 2: Find a great real estate agent in South Carolina
Your real estate agent will be your main ally during the home buying process. Besides finding and showing you properties, your agent will help you make offers, negotiate contracts, and navigate the closing process. Plus, they can recommend other service providers like title companies and inspectors to help you buy your home in South Carolina.
Don't rush into choosing an agent. Instead, take the time to research and interview multiple real estate agents who have experience in the neighborhoods you're interested in. You should pay attention to a realtor's:
- Years of experience
- Number of transactions in the last year (the more the better!)
- Experience in your price range
- Overall review score
- Individual reviews and complaints
Step 3: Get preapproved for a mortgage
A mortgage preapproval letter is an offer to lend you up to a certain amount of money to purchase a home. It shows sellers that you are a serious buyer who is financially qualified to make an offer on a home.
Most sellers in South Carolina will require preapproval before showing you their home.
You don't have to decide on one lender right now. In fact, you should compare interest rates and preapproval amounts from several lenders to make sure you're getting the absolute best terms when you buy your South Carolina home.
Step 4: Choose the right location
Currently, the typical home value in South Carolina is $299,173, but don't worry if that doesn't perfectly match your budget. Home prices vary dramatically from city to city and even from neighborhood to neighborhood!
Also, look at past home value trends. This will give you an idea of how much your home's value could go up over the next few years.
To give you an idea of how appreciation could impact what your house is worth in the future, consider these examples from three neighborhoods in Columbia:
Home value appreciation in Columbia
Step 5: Start house hunting in South Carolina
Searching for homes in South Carolina is the fun part of the home buying process! You'll get to look at a variety of homes and discover what you really want in a home.
Make a list of everything you want in a home and prioritize them. At the top of the list should be the items that are most important to you. This will help you separate your "must-haves" from your "nice-to-haves."
Your agent can help you understand if your wants are realistic for your budget and favorite neighborhoods or if you need to rethink what you're looking for.
Look at current housing inventory
The timing of your house hunt in South Carolina can have a big impact on your number of options. For example, in South Carolina, May has historically seen the most homes for sale. Searching in this season could give you more options and a greater likelihood of finding your dream home.
On the other hand, December gives you the fewest choices in South Carolina. Historically, there are 38.6% fewer homes for sale than during South Carolina's peak season.
Housing inventory in South Carolina by season
New listings per month
Based on data from Realtor.com (September 2022)
Step 6: Make an offer
Once you find a South Carolina house you love, it's time to make an offer. Your real estate agent will help you write a compelling offer that gives you the best shot of convincing the homeowner to sell to you.
Currently, in South Carolina, homes stay on the market for 76 days before going under contract. However, every market goes through seasonal changes. During busier months, homes get snatched up more quickly than others.
Historically, South Carolina homes sell fastest in April, where the average property is only on the market for 67 days. If your home search falls around this time, you should be prepared to move quickly and potentially make offers on several homes before yours is accepted.
On the other hand, if you buy in December, you have a bit more time to search. Homes typically stay on the market 17 days longer than South Carolina's annual average.
Average time homes spend on market in South Carolina
Based on data from Realtor.com (September 2022)
» LEARN MORE: What should an offer include?
Step 7: Inspections and appraisals
Inspections and appraisals are an opportunity for you to better evaluate the home's condition and value before officially purchasing it. You may have an opportunity after this step to renegotiate the terms of your contract with the seller if something unexpected pops up.
Home inspections in South Carolina
Having your South Carolina home inspected by a licensed inspector gives you peace of mind about the condition of the property before you commit thousands of dollars to purchase it.
Your inspector should check out the following parts of the property:
- Electrical system
- HVAC system
If the home has a septic system, you should also pay for a septic inspection to make sure it doesn't have any problems that wouldn't be covered in a typical home inspection.
South Carolina-specific inspections
South Carolina law requires sellers to complete disclosure forms to the best of their knowledge, but some property issues may go unnoticed. That's why it's highly recommended for buyers to take extra precautions and have specialized tests completed before closing on a home.
In addition to a general home inspection, here are a few important tests you should consider doing as well:
- Radon testing: The state of South Carolina recommends radon testing for all homes, but it isn't required. If the seller hasn’t done a radon test in the past year, you can request a free radon test kit from the South Carolina Department of Health and Environmental Control here.
- Pest inspection: Certain lenders may require you to get a pest inspection, but you should consider getting one even if you aren't obligated to do so. Termites and other pests can cause serious damage, and early detection is vital to prevent an infestation from getting out of hand.
Appraisals determine the value of the property. If you're using a mortgage to buy your new home, your lender will order an appraisal to make sure the home is worth the money that it's loaning you.
Step 8: Close on your new home!
Closing on a home in South Carolina is pretty straightforward when you work with a title company. On closing day, you'll meet at the company to complete the paperwork for the title transfer and settle your closing costs.
Prepare to spend about an hour reading and signing legal documents. There will be a lot of information to get through, but each page is required to transfer the title into your name.
Some important forms you'll have to review and complete will include:
- Your final loan application
- The deed
- The mortgage promissory note
- The disclosure statements
After you're done signing the documentation, it'll be time to pay your closing costs. The title company will make this easy for you by collecting the total amount you owe and distributing the funds to the right recipients on your behalf.
Homebuyers can generally split their closing costs into four categories:
- Lender fees: Fees that your mortgage lender charges for preparing your loan. Sometimes, these charges may cover other costs associated with your loan, such as appraisal or survey fees.
- Title and escrow charges: Fees that the title company charges for facilitating the closing process and conducting the title search. Buyers and sellers often split this cost.
- Prepaid costs: Ongoing fees for homeowners, such as property taxes and homeowners insurance. Some mortgage lenders require borrowers to pay for expenses like these up front.
- Other closing costs: Miscellaneous expenses that vary for every buyer. Natural disaster certification fees, real estate attorney fees, and pest inspection fees are a few common miscellaneous costs.
Buyers in South Carolina typically pay 3–5% of the purchase price in closing costs. For a $299,200 home — the typical home value in South Carolina — that's between $8,976 and $14,960!
Frequently asked questions
In South Carolina it's required for a real estate attorney to be part of every home sale. While your agent can make recommendations, remember you get to make the final decision. Interview lawyers before hiring them to make sure they have the experience you need.
- Save for down payment
- Get pre-approved for a mortgage
- Choose your preferred South Carolina neighborhoods
- Partner with the right real estate agent in South Carolina
- Go house hunting
- Make a strong offer
- Inspections and appraisals
- Do a final walkthrough and close
Yes! SC Housing’s Homebuyer Program is available to first-time homebuyers and buyers in target areas. Eligible participants can receive a fixed-rate mortgage with the option to apply for down payment assistance as a forgivable second mortgage.
Household income and home purchase price limits apply and vary by county. Other eligibility requirements differ depending on your loan type:
- FHA loans require a 3.5% down payment and a minimum credit score of 620.
- Conventional loans require a 3% down payment and a minimum credit score of 640.
- USDA RHS loans and VA loans both require a minimum credit score of 640.
Federal Reserve. "Housing Market Tightness During COVID-19: Increased Demand or Reduced Supply?." Accessed October 11, 2022. Updated July 08, 2021.
Consumer Protection Financial Bureau. "The Fed is raising interest rates. What does that mean for borrowers and savers?." Accessed October 11, 2022. Updated March 17, 2022.