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Whether you’re thinking about taking a midnight train to Georgia or planning to arrive at a more reasonable time of day, buying a house in the Peach State can put you in plenty of great places. There’s the cosmopolitan feel of Atlanta, the youthful collegiate energy of Athens and the coastal beauty of St. Simons Island, to name a few. Georgia ranked seventh in inbound migration in 2021, according to the U.S. Census Bureau, which means you’ll need to be prepared for some competition in your home search. Follow this guide to check off the most important steps to buying a house in Georgia.
How to buy a house in Georgia
Decide where to live in Georgia
Do you want the big-city energy of Atlanta? It’s the 20th-best place to live in the country, according to Bankrate’s most recent rankings, and it’s on the rise: Median sale prices have hit $435,000, according to data from the Atlanta Realtors Association, up nearly 18 percent from the previous year. The number of listings has increased, though, helping to alleviate some of the challenges of the metro area’s supply shortage.
Are you better suited for the coastal calm of Brunswick? You’re in luck: The small-town vibe here also comes with a smaller price tag. Median sale prices are $328,000 as of July 2022, according to Redfin.
As you compare employment opportunities, nightlife and safety data in different Georgia cities, be sure to tally up the total bill for calling it home — transportation, food, utilities and other necessities. Bankrate’s cost of living calculator can be a helpful resource to compare those numbers. For example, Atlanta’s cost of living is nearly 20 percent higher than Savannah’s. So, if you’re on a smaller budget, perhaps a smaller city is the way to go.
Outside of the cost of living in your chosen city, you’ll want to pay close attention to the cost of your mortgage. Compare mortgage rates in Georgia to find the best deal that saves on interest. Every little bit helps. For example, consider the savings from a $320,000 30-year loan with a 5 percent interest rate versus the same loan with a 5.5 percent interest rate. That seemingly small difference saves you $99 per month, according to Bankrate’s mortgage calculator.
Tips for buying a house in Georgia
As you start shopping around for a loan, it’s important to know how much you can borrow before exceeding conforming loan limits in Georgia. For conventional loans, that number is the same across the entire state: $647,200. So, if you need to borrow more than that, you’ll be in the market for a jumbo loan. FHA limits look different depending on the county where you want to buy. For example, FHA borrowers are capped at $420,680 in most places, but the limit is higher in more expensive areas like Fulton County (where Atlanta is) and Greene County.
Things to know about buying a house in Georgia
- Property taxes: In addition to making regular mortgage payments, you need to budget for property taxes. According to data from the Tax Foundation, homeowners in Georgia typically pay a 0.91 percent property tax rate. That comes out to around $1,290 per household.
- Dual agency: As you’re looking for a home to buy, keep in mind that in Georgia, your agent can also represent the seller of that home. It’s called dual agency, and you will need to sign a consent form allowing it to happen.
- Seller’s disclosure: Unlike most other states, Georgia sellers are not required to complete a disclosure statement to share with prospective buyers. Instead, they can simply tell you verbally about certain conditions of the property. Sellers are, however, required to answer any direct questions you ask honestly.
- Closing costs: In addition to your down payment, you need to factor in how much to set aside to cover closing costs. According to data from ClosingCorp, the average tab for title insurance, appraisal, settlement, recording fees, land survey and transfer taxes in Georgia added up to $3,762 in 2021 — an average of 1.3 percent of the purchase price. Keep in mind that you may also need to cover lender costs, too, such as an origination fee for the loan.
- Attorneys: Georgia requires a real estate attorney to oversee the closing and final settlement of the transaction. You should consider hiring a lawyer earlier in the process, though, to help you navigate the complicated maze of paperwork.
- Climate and weather considerations: Living in Georgia means escaping the winter and enjoying the beauty of the Southeast. However, as you shop around for homeowners insurance, be sure to consider the need for additional coverage to protect your home from flooding and hurricane damage. If you’re buying a house near the coast, that means you need to think about the potential risks of rising sea levels.
How much house can I afford in Georgia?
Should you buy a house? Answering that question involves answering three other questions first.
- Do you have good credit? A 620 credit score is a good starting point, but anything 740 or greater will put you in better shape for a lower-cost loan.
- Will you be in the home for a while? Buying a home comes with a lot of work and a lot of transaction costs, so you need to be reasonably sure that you will live in it long enough to justify those upfront expenses.
- How much can you contribute to a down payment? You’ll need at least 3 percent of the purchase price — and potentially as much as 20 percent, especially if you don’t want to pay for private mortgage insurance.
Once you’ve decided to buy, it’s time to do the math on what you can comfortably spend on the purchase. Bankrate’s new-home calculator can help you simplify the earnings, debts and other expenses to help you understand the maximum monthly payment you should consider.
Saving for a down payment in Georgia
Saving up enough for a down payment can feel like an impossible goal. Fortunately, there are some options that can help you get assistance with that big expense. If you’re a first-time homebuyer in Georgia, consider the Georgia Dream program, an initiative led by the state’s Department of Community Affairs that can help eligible homebuyers score up to $7,500 to help cover all or part of the down payment, with no interest.
There are local programs in many cities, too, including up to $25,000 in down payment funds for buying a home in Macon’s College Hill neighborhood. In many cases, these programs are designed to help those most in need. So, if you’re a low-income borrower, don’t despair; you may be able to use your small earnings to your advantage.
Get preapproved for a mortgage
Before you move on to any of the next steps to buying a house in Georgia, it’s time to get preapproved for a mortgage. A lender will comb through your credit report, your bank accounts, your pay stubs and a range of other information about your personal finances. It might not take that long, though: Some online lenders have automated underwriting systems in place that can issue preapprovals in 15 minutes. Regardless of how long you have to wait, the preapproval letter indicates that you’re likely to have no trouble getting official approval with your formal application.
Find the right lender
You don’t have to get your mortgage from the lender that preapproves you as a buyer. In fact, you should make sure that you consider offers from other lenders; comparison shopping is key to saving money on a home loan. Be sure to compare the best lenders licensed to operate in Georgia, and go into the process knowing what you want out of the experience. If you need in-person assistance, you’ll want to look for a mortgage lender with physical locations. However, if you’re comfortable with an all-online process, there are quite a few lenders that can deliver a good balance of service and low fees.
You may also want to look into a cast of emerging companies like Ribbon and Opendoor, which offer cash-backed offers for buyers. So, instead of submitting an offer that outlines your financing terms, your offer can go toe-to-toe with a buyer who is willing to pay all-cash. It’s a way to look extra competitive in a hot market like Atlanta, where more than 25 percent of recent sales were all-cash offers.
Find the best local real estate agent in Georgia
In addition to having a great lender on your team, you should find the right real estate agent to help you buy a house in Georgia. A good agent with expertise and connections can make a difference for any buyer, but it’s even more essential if you’re trying to buy a home from out of state. In some Georgia markets, hot listings might go to contract in just a few days — it might be impossible for you to get there quickly enough to even see the house. But a good agent can be your eyes and ears on the ground, telling you whether you should submit an offer, sight unseen.
Start house hunting
Ideally, you won’t need to go the sight-unseen route. After all, touring properties is the fun part of buying a home. It’s wise to start your search online and then pick a weekend to devote to attending open houses and touring potential homes. Go into the process with an open mind, and make a list of your must-haves — a garage and a home office, for example — versus amenities you’d love but can do without, like a pool or a remodeled kitchen. And think about checking out some townhomes and condos in Georgia, too: They currently have median sale prices approximately $48,000 cheaper than single-family homes.
Make an offer
When you’re ready to make an offer, your agent will help you understand how quickly you need to move and what number to use as a starting point. Be prepared for some back-and-forth negotiations, and possible competition from other buyers. If you do wind up in a bidding war, there are plenty of strategies to help increase your odds of winning.
Get a home inspection and appraisal
Once your offer is accepted, it’s time to make sure that the home is indeed worth the price you’re paying. A home inspection is a critical piece of the homebuying process. While it’s technically optional, you shouldn’t skimp on this expense — especially in Georgia, since the seller isn’t legally obligated to complete a written disclosure statement. If the inspection uncovers any issues, you’ll need to think about how to address them, whether you ask the seller for concessions, get the problem fixed before you move in or walk away from the deal.
In addition to an inspection, your lender will require a professional appraiser to assign a value to the home. This is simply a way for the lender to protect their investment: If you stop making payments on your mortgage, they need to know they can make back their money.
Take a final walk-through and close on your new Georgia home
You’re almost there. Before you head to your official closing, though, schedule a final walk-through of the home to verify that the home is in the condition you’ve been promised. You shouldn’t need to deal with removing any of the seller’s items, and you certainly shouldn’t have to deal with any damages that occurred during their move-out. As long as everything looks good, head to your closing with a certified check or cashier’s check to cover settlement costs, typically between $1,000 and $5,000. Note that if your closing costs are more than $5,000, Georgia law requires a wire transfer. Sign your name in what will feel like 1,000 different places, and finally, let your pen rest. You are officially a homeowner in the Peach State — what a sweet feeling.
Yes. Georgia is expected to continue to attract new residents, which means that property values here are likely to continue to appreciate. According to population data from the Georgia governor’s office, nearly 12 million people will live in the state by 2032 — an increase of approximately 1 million residents from today’s count. So, whenever you’re ready to sell in the future, you should be able to get a good return on your investment.
You will need a minimum credit score of 620 with most mortgage lenders, a debt-to-income ratio less than 43 percent, a down payment of at least 3 percent of the purchase price (and likely more) and enough cash to pay for your closing costs. FHA standards do allow for borrowers with credit scores as low as 500, but it’s ultimately up to lenders to set their own standards, and you’ll qualify for better deals with a higher score.
It’s a seller’s market in Georgia, so be prepared to deal with a few pitfalls. The median sales price of a home in Georgia increased by 20 percent in the past year, and the typical home spends just 22 days on the market, according to the Georgia Association of Realtors. Buying here may be a bit frustrating, especially if you’re looking in competitive cities like Marietta, Athens and Columbus. However, if you’re serious about spending your future in Georgia, be patient and buy now to avoid even higher prices in the future.
The median down payment in Georgia is currently $21,880. However, the amount of any down payment depends on the home you want to buy and the way you finance the purchase. Consider a few scenarios for a down payment on a property that costs $360,000, which is the median sale price in the state. With a conventional loan, you may be able to put just 3 percent down, which adds up to $10,800. If you don’t want to pay mortgage insurance, you will need a down payment of 20 percent, which yields a much higher price tag of $72,000. The more you can put down upfront, the lower your monthly mortgage payments will be.
Yes — anyone can buy a house in Georgia. If you’re going to apply for a mortgage to purchase the home, you just need to make sure that all lenders you are considering have a license to operate in the state.