Preparation is what turns a browsing buyer into one a seller takes seriously. Most of it is paperwork, and all of it is easier to do before you find the property than during the days you have to act on it.
Financing, or proof of funds
If you are borrowing, talk to a lender before you start looking rather than after. Not because anyone will refuse to show you a property, but because the answer shapes what you look at, and because the strength of your offer depends partly on how far along that conversation is.
If you are paying cash, the equivalent is proof of funds: a current statement or a letter from the institution holding the money, showing that it exists and is available. A seller weighing two offers is weighing certainty as much as price, and an unsupported claim about cash is not certainty.
I do not make lender recommendations in this guide, and I make no promise about what any lender will do. What I will say is that coastal property has features an inexperienced lender meets for the first time on your file — flood zones, elevation, wind coverage, rental use — and meeting them for the first time takes longer.
Prequalified is not the same as reviewed
These words get used loosely, and the difference matters. The Consumer Financial Protection Bureau puts it plainly: lenders use the terms differently, and some issue a prequalification on information you simply reported, while a preapproval generally follows information the lender has actually verified.
Either way, and this is the part worth holding on to, neither letter is a guaranteed loan offer. It tells a seller you are likely to be able to finance the purchase. It does not tell them the loan will close. The distance between those two things is the underwriting, and the underwriting happens after you are under contract.
So the question worth asking your lender is not “can I get a letter” but “what have you actually looked at”. A letter written after someone has reviewed your income documents, your assets and your credit is a different instrument from one written after a five-minute phone call, even when the two documents look alike.
The money you need that is not the down payment
This is where buyers most often get caught short, because the down payment is the number everybody plans for and it is not the only one. Some of these are due at or near the start of the contract, in cash, well before closing.
- The due diligence fee. Paid to the seller, up front, for your right to investigate the property and to terminate during the due diligence period. The amount is negotiated in each transaction.
- Earnest money. A separate deposit, held by an escrow agent rather than paid to the seller, and credited to you at closing. Also negotiated.
- Inspections. The general inspection, and any specialist you bring in after it. Each is a separate professional with a separate fee, and each is generally paid whether or not you go on to buy.
- The appraisal. Ordered through your lender if you are borrowing, and usually charged to you.
- Insurance. Coverage has to be in force at closing when there is a loan, and the first premium is commonly paid before or at closing.
- Closing costs. Your attorney’s work, recording fees, lender charges, and the amounts a lender collects in advance for taxes and insurance.
- Survey, and anything the property specifically needs. Not every purchase involves one, and some very much do.
You will notice there are no figures in that list. That is deliberate. Every one of these is either negotiated between the parties or quoted by a third party for a specific property, and a number printed on a website would be a guess wearing the clothes of a fact. Ask for written estimates early, and ask your lender for the Loan Estimate that lays the loan-side costs out in a standard form you can compare.
Second homes and investment property are financed differently
Lenders classify a purchase by how you will occupy it — primary residence, second home, or investment — and the classification affects the terms and the requirements. It is not a formality and it is not a box you get to choose freely: telling a lender a property will be your second home when you intend to rent it out is a misrepresentation on a loan application, and it is not worth doing.
If you intend to rent, ask your lender early how they treat rental use, whether any projected or historical rental income can be counted, and what documentation they would need to count it. Lenders differ, and they differ enough that the answer can change which property makes sense.
Ask, too, whether the lender has closed loans on this stretch of coast. A property in a Special Flood Hazard Area, or one with a lift or a dock or an unusual foundation, is a routine file for a lender who sees them and a slow one for a lender who does not.
What to have ready before you make an offer
- Your lender letter, or your proof of funds. Current, and specific enough to be worth something.
- The cash you will need up front. Actually liquid, and not in a form that takes a week to move.
- An insurance agent you have spoken to. Someone who writes coastal property here and can quote a specific address quickly.
- A closing attorney in mind. In North Carolina you will need one, and choosing under time pressure is worse than choosing now.
- Your must-haves separated from your would-likes. Written down, because they blur the moment you walk into somewhere you love.
- A clear answer on how you will use it. Because your lender, your insurer and the town will each ask, and the answers had better match.
Where this comes from
- Consumer Financial Protection Bureau — prequalification and preapproval letters (opens in a new tab)
- Consumer Financial Protection Bureau — what a Closing Disclosure is (opens in a new tab)
- NCREC — when a due diligence fee is refunded (opens in a new tab)
General information about how a North Carolina residential purchase usually works. It is not legal, tax, insurance, lending or engineering advice, and it is not a substitute for advice about a particular property. Every property and every contract is different. Your closing attorney, your lender, your insurance agent and the inspectors you hire are the right people to ask about yours.