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If you’re hoping to move to Raleigh, you’ve picked a great spot to land. The city is one of the best places to live in the entire country, according to Bankrate’s most recent rankings. North Carolina’s capital city has attracted loads of newcomers in recent years, which makes the process of actually buying a home here a bit frustrating, as its housing market continues to favor sellers. Read for everything you need to know to buy a house in Raleigh.
Deciding where to live in Raleigh
Raleigh is one-third of the popular Research Triangle region, which also includes Durham and Chapel Hill. (The area is so named for the three cities’ major research universities: NC State, Duke and UNC.) The city itself had a fairly high average sale price of just under $580,000 as of August 2023, according to the Raleigh Regional Association of Realtors (RRAR). That’s well above the national median home price of $410,200, but several nearby towns offer prices closer to that national benchmark. For example, RRAR data shows that homes average $418,749 in Garner, just south of the city, and $405,040 to the east in Wendell.
Just as the price tag varies across the metro area, so will your quality of life. Make sure that you’re thinking about your daily commute, local schools and other criteria that might matter to you and your family. Buying a house incurs a lot of closing costs, so it’s important to find a home where you can feel comfortable for at least the next five years to justify all those expenses. No matter where you choose, you’ll enjoy a relatively affordable lifestyle: The Raleigh area is less expensive than other Southeastern hubs like Charlotte and Atlanta, according to Bankrate’s cost of living calculator.
How to buy a house in Raleigh
Which neighborhoods should you consider? What kind of mortgage makes the most sense for your finances? How much do you need for a down payment? Consider these factors as you move through your homebuying journey.
Saving for a down payment in Raleigh
How much have you saved up to put toward your down payment? Some conventional lenders require just 3 percent of the purchase price if you qualify: On a median-priced $580,000 home, that’s $17,400. However, the less you pay upfront, the more you have to borrow, and so the more you’ll pay in interest. And to avoid private mortgage insurance, which can add hundreds of dollars to your monthly payment, you’ll need to put down a full 20 percent — a considerable chunk of cash at $116,000.
Get preapproved and find the right mortgage lender
The best way to know how much house you can really afford is to get preapproved for a mortgage. A lender will conduct a preliminary review of all your finances — bank accounts, tax returns, credit history and more — and let you know how much they’d be willing to loan you. This gives you a solid starting point to budget with.
You may wind up getting your mortgage from the lender that issues your preapproval, but you don’t have to. It’s smart to compare offers from other North Carolina mortgage lenders first. Look for one that offers a combination of competitive rates and low fees (which will help keep your closing costs in check).
Find the best local real estate agent in Raleigh
You can look at listings online anytime, but when you’re really ready to enter the market, find a local real estate agent. Agents are licensed pros who can help you successfully navigate what can be a very overwhelming process. Homes in Raleigh typically receive an average of three offers, according to Redfin, which means you’ll likely be competing against other buyers. An expert agent can help you craft a compelling offer, maneuver in a bidding war — or know when it’s better to walk away.
Start house hunting and make an offer
Make a list of what you absolutely must have, and what you’d be willing to do without. You’re unlikely to find every single thing you want in a home, so think about where you can compromise — for example, do you need to be within walking distance of nightlife and dining, or would you rather have more space and a big backyard? The one area where you should not compromise is your budget. When you’re ready to make an offer, make sure you feel comfortable about the price.
Get a home inspection and appraisal
The seller accepted your offer — congratulations! But you still have some work to do. Hire a home inspector to examine every inch of the property and identify any potential red flags, like plumbing or electrical issues, that could wind up costing you a lot of money later. Depending on the results of the inspection, you may be able to negotiate for the seller to pay for part of your closing costs or cover the price of repairs. Such concessions are very common: A recent Redfin study found that more than 64 percent of sellers in Raleigh agreed to them in the first part of 2023.
While a home inspection is optional, an appraisal is not. Your lender will require it to verify that they’re not lending you more than the home is worth. If your appraisal is too low, you’ll need to make up the difference somehow, either by paying out of pocket or renegotiating the price.
Requirements to buy a house in Raleigh
Can I afford a house in Raleigh?
This area has been exploding in popularity, which means that home prices have risen over the past few years. According to Redfin data, for example, the median home price here three years ago was just $292,500, while the RRAR shows today’s average price to be about double that. These much higher prices, combined with persistently high mortgage rates, make buying a Raleigh home tough right now.
One thing that can help is having a strong credit score. A higher score will qualify you for a lower mortgage interest rate, which will save you money. If your credit score is on the low side, work to boost it before you start house-hunting. A score of at least 620 will be required for most conventional loans, while 740 or higher will put you in the running for the best terms a lender can offer.
In addition, North Carolina offers financial assistance programs that can make the daunting dollar signs associated with purchasing a home feel less overwhelming. There are many programs aimed directly at first-time homebuyers as well — if you’re a first-time buyer with a low to moderate income, you may qualify for the city of Raleigh’s assistance programs, too.
After all your work to find a property, negotiate a contract and secure a mortgage, there’s one more item to check off your list: the closing. Closing involves signing your name on a mountain of documents and handing over a lot of cash to cover your closing costs.
According to data from Core Logic’s ClosingCorp, closing costs in North Carolina typically add up to 1.1 percent of the purchase price. On a median-priced $580,000 Raleigh home, that’s another $6,380. You’ll have a firm idea of your exact costs once you receive your closing disclosure — review it carefully before closing day to make sure there are no surprises. Once you’re paid up and the documents are all signed, you’ll get the keys to your new Raleigh home.
Homes here can be pricey. According to the Raleigh Regional Association of Realtors, the average sale price of a home in the city as of August 2023 was $579,886 — well above the National Association of Realtors’ nationwide median price of $410,200.
According to Redfin, yes they are — but not by much. The company’s data shows that the median price of a home in Raleigh fell by 2.1 percent between June 2022 and June 2023.