Hatteras Island Home Buyers FAQ's

Answering Your Hatteras Island Home Buying Questions

Buying a Hatteras Island home is both thrilling and a bit unnerving, especially if you're a first-time home buyer. Both experienced home buyers and first-time buyers alike will benefit from the frequently asked questions below. Before you begin your Hatteras Island home search, it is recommended that you prepare yourself for the journey by educating yourself. This will ensure you are a knowledgeable home buyer prepared to make a confident home buying decision.

Q- Where should I begin my Outer Banks home search?

A- You’ve already started the process. Fact‐finding and reading articles is a great way to become a smart consumer. The highest priorities to focus on before you begin searching for specific areas, neighborhoods, or homes would be to:

• Identify your reason for purchasing: investment property, second home, full‐time occupancy or your retirement plan
• Learn about the Hatteras Island real estate market.
• Consult your financial advisor and/or accountant as well as an Outer Banks lender to get preapproved.
• Have a down payment and earnest money ready when the time comes to act and make your offer.

Q- Can I use a lender from my hometown?

A- You may use your local lender, but history has shown us that it is much more efficient to use an Outer Banks lender who is accustomed to second home and investment purchases that include the Vacation Rental Act and Bill of Sale for furnishings to be included. Unfamiliar lenders could promise a “second home loan” initially, but underwriters could suggest a last minute switch to an “investment loan” due to their unfamiliarity.

Q- What is the benefit of a Buyer’s Agent during the search and purchase of a property?

A- Finding the right investment property requires knowledge of the local market, as well as the ability to estimate the earning power of a property.

• The average buyer does not know how much to offer on a home. Your NC 12 Realty agent will prepare a Current Market Analysis and/or an Investment Analysis that will strongly support an offering price.
• We will help negotiate the offer, schedule inspections, collect estimates and negotiate repair concessions, transfer utilities, and assist all the way to closing.
• We are knowledgeable about the market, flood prone areas, and locations suitable for your purpose of purchasing an Outer Banks home.

Q - Which Hatteras Island Village should I buy in?

A - There are seven villages located on Hatteras Island (Rodanthe, Waves, Salvo, Avon, Buxton, Frisco, and Hatteras), each with their own unique characteristics. Our advice is to visit each of the villages, drive or walk around, and consider which one may be the best fit for you and your family. All seven of the villages are also listed on our website.

Q- What are Earnest Money Deposits and Due Diligence Fees, and how much do I need to offer?

A- On Hatteras Island we typically see earnest money deposits of approximately 1% of the offer amount whilw Due Diligence Fees are rare in the this real estate market.

• Earnest Money is a deposit of “good faith” that is held in escrow until closing. Earnest Money is refundable during your Due Diligence Period if you choose to terminate the contract.
• A Due Diligence Fee is made to the Seller at the time of contract and is not refundable. It is like “option money”, where a Buyer pays for the right to conduct their Due Diligence. A Buyer may terminate the contract within the Due Diligence Period and have Earnest Money refunded, but Due Diligence Fees remain the Sellers’ and are not refundable.

Q- What can I expect my closing cost expenses to be?

A- Average closing costs are approximately 2.5‐3.5% of the purchase price.

• The lender will provide a loan estimate outlining expected closing costs once you have identified a property to purchase. A year’s insurance cost, plus 2‐4 months of escrows, are included in your average closing costs.
• There will be some upfront costs associated with due diligence. These costs may include an appraisal fee, home inspection, pest inspect, survey, etc. Many of these services expect payment at the time of service but there may be options for some of these costs to be charged at settlement of the sale.

Q- What is the average cost of taxes and insurance?

A- Taxes in Dare County are roughly 0.6%‐0.7% of the home’s tax value and insurance can differ depending on the policy.

• Flood insurance is available through both the National Flood Insurance Program (NFIP) as well as private insurance companies. Getting flood insurance coverage for most properties on Hatteras Island is much more reasonable in price than most people think. The average policy will cost under $1,000 per year. There are even some locations in which flood insurance may not be required.
• The average homeowner’s insurance policy with wind and hail coverage (wind driven rain) is approximately 1%‐1.5% of the replacement cost.
• General Liability and Theft Coverage policies are available at very affordable prices. Many homeowners add General Liability Coverage to their primary home policy.

Q- We would like to rent our home when we are not using it. How does this work?

A- There are several professional property management companies on Hatteras Island that, for a fee, will provide you with comprehensive property management program options. Services may include scheduling rentals, cleaning, maintenance, advertising your cottage, and accounting.

• There are also options to manage the property yourself with Vacation Rental By Owner (VRBO) and AirBnb.com. With options like these, you would most likely want to hire a company to take care of the cleaning, maintenance, etc. of your property. These services are also available on Hatteras Island through local companies or individuals that your agent may help you locate.
• Hatteras Island seemingly has a shortage of full‐time rental options, should you be interested in renting your home until a time when you may want to use it personally.

Q- Which homes have better rental income?

A- Historically ocean side homes rent better. Location matters when it comes to rental income but you should determine if rental income is your main factor for purchase.

• We will help you fine tune your search with specific examples once we narrow down your personal preferences, amenity needs and price point. As your Realtor®, we will consult with you about small changes and added amenities that may increase the homes rental income potential.
• The number of bedrooms and baths are important factors in a home’s rental ability. Vacationers are also willing to pay a premium for amenities such as game rooms, media rooms or home theaters, elevators, swimming pools and hot tubs.

Q- Are furnishings included

A- In most cases personal property, including furniture, transfers with a separate “Bill of Sale” for $1. Some personal items such as favorite art pieces, antiques, fishing equipment, etc., will be excluded and do not convey. Owner Occupied homes may not be sold furnished.

Q- Is Hatteras Island a good place to call home year around?

A- Everyone at NC 12 Realty thinks so! Each of us are here by choice, not by birth. The 2010 Census indicates that we share the island with over 4,300 other year around residents.

• Cape Hatteras Elementary School and Cape Hatteras Secondary School of Coastal Studies are excellent schools with small class sizes and personal attention. Students who meet the criteria can earn college credits while still in high school through College of the Albemarle for free.
• Vidant Family Medicine in Avon employees three Doctors who reside on Hatteras Island. Nags Head is home to the Outer Banks Hospital. General Dentistry is available in Frisco and Buxton offers Chiropractic Care.
• Hatteras Island offers a wonderful sense of community that visitors may not get to understand during their weekly visits. You can count on community dinners, dances, and fundraisers throughout the year. You can also count on community support during weather related events and times of personal distress. Welcome to the Hatteras Island family!

Let's Get Started!

Are you ready to schedule your home buying consultation?  If so, contact us today and together we will review your needs and your budget to help you find the right Hatteras Island home for you!