Before You Fall in Love With a Home, Get Comfortable With the Language

Buying a home is one of the biggest decisions you’ll ever make — and in South Carolina, the process has a few parts that are unique to our state. One of the best ways we can set you up for a confident purchase is to make sure the terminology feels familiar before you fall in love with a home. Here’s a plain-language breakdown of the terms that come up most often during the home buying process.

Financing Terms

Credit Score

Your credit score is a three-digit number — ranging from 300 to 850 — that reflects your history of borrowing and repaying debt. Lenders use it to evaluate how likely you are to repay a mortgage. The higher the score, the more favorable the loan terms you’re likely to qualify for. If your score needs some work, a good lender can walk you through steps to improve it before you apply.

Pre-Approval Letter

A pre-approval letter is a written statement from a lender confirming how much they’re willing to lend you based on a review of your income, assets, and credit. In today’s market, sellers expect to see one before they’ll take your offer seriously. It also helps you shop with a clear budget in mind so you’re not falling in love with homes outside your range.

Down Payment

The down payment is the portion of the purchase price you pay out of pocket at closing — not through your loan. Depending on the loan type and your qualifications, this can range from 0% to 20% or more. Your lender can walk you through what’s required for the programs you qualify for. Your down payment amount also affects your monthly payment, interest rate, and whether private mortgage insurance (PMI) applies.

Affordability

Affordability is a measure of how much home you can realistically purchase given your income, savings, and current mortgage rates. With home prices and interest rates both elevated in recent years, affordability is something we talk through carefully with buyers so there are no surprises when monthly costs come into focus. Getting pre-approved early helps clarify what’s truly comfortable for your budget.

Contract & Contingency Terms

Earnest Money Deposit

Earnest money is a good-faith deposit you submit with your offer to show the seller you’re serious. In South Carolina, this is typically paid to an escrow account shortly after the contract is signed and is credited toward your purchase at closing. The amount varies by transaction, but it is a separate payment from the due diligence termination fee (more on that below).

Due Diligence Period

South Carolina residential contracts include a negotiated due diligence period — a window of time after the contract is signed during which you can complete inspections, review findings, and negotiate repairs. If something comes up that you can’t resolve with the seller, you have the right to terminate the contract during this period, but the due diligence termination fee will go to the seller (see below).

Due Diligence Termination Fee

This is a separate payment from earnest money — and one that trips up a lot of buyers who aren’t familiar with SC contracts. The due diligence termination fee is only owed if you, the buyer, choose to terminate the contract during the due diligence period. If the seller terminates or you terminate for a contract-allowed reason outside of due diligence, different rules apply. We always walk our buyers through exactly how these payments work before they’re under contract.

Contingencies

A contingency is a condition that must be met for the sale to move forward. Common contingencies include a financing contingency (your loan must be approved), an appraisal contingency (the home must appraise at or above the purchase price), and a CL100 contingency (findings must be satisfactory or resolved). Contingencies protect you as the buyer — but they also affect how competitive your offer looks. We help you think through which contingencies make sense for your situation.

CL100 (Wood-Destroying Organism Inspection)

The CL100 is a South Carolina-specific inspection that checks for wood-destroying organisms — including termites, wood rot, and moisture damage. It is a separate contingency in the SC residential contract of sale, distinct from your general home inspection and due diligence process, and may be required depending on the type of loan you are taking out. Given our warm, humid Lowcountry climate, we strongly recommend having this as a contingency in your contract. Should the inspection reveal infestation or damage, the seller will be responsible for treatment and repairs before closing.

Appraisal & Closing Terms

Appraisal

An appraisal is an independent, professional assessment of a home’s market value. Lenders require one to confirm the home is worth what they’re lending you. If the home appraises below the purchase price, it can trigger a renegotiation or require you to cover the gap out of pocket — which is why your appraisal contingency matters.

Closing Costs

Closing costs are the fees and charges due at settlement to finalize the purchase. They can include lender fees, title insurance, attorney fees, property taxes, homeowner’s insurance prepayments, and more. Your lender is required to provide a Loan Estimate that outlines expected closing costs early in the process. Budgeting for these in addition to your down payment is an important part of your overall financial planning.

Questions? We’re Always Happy to Talk Through the Details.

Buying a home in the Charleston area is exciting — and we want you to feel informed and at ease every step of the way. If any of these terms raise questions, or if you’re just starting to think about what a purchase might look like for you, we’re here for that conversation. There’s no pressure and no obligation — just honest guidance from a team that knows this market well.

Ready to get started? Schedule a buyer consultation with our team — we’d love to learn more about what you’re looking for.

Warmly, Lauren, Tina and Gigi | Lauren Zurilla & Associates — Your Charleston Area Real Estate Experts