Tips for Buying a House in Utah
If you’re thinking about buying a home in Utah, you have options. No matter what you decide, talk to Revere Homes professionals who understand the housing market and have years of experience, they will be invaluable to you during this process. Talk to them and let their experience be a guide for your home buying journey.
There are some realities that the new home buyer in Utah will have to contend with. Demand for houses, lumber prices, and in-migration from big cities are all factors that will have a significant effect on your home buying experience in Utah.
A Hot Utah Market
The housing market in Utah is hot. A hot housing market means that home buying is not easy. It means low inventory and high prices. If you’re thinking that a hot market means houses are cheap and plentiful and going fast, well, you’d be wrong on most of that.
According to a Wall Street Journal article this year, there are more real estate agents in the US than houses for sale. This reflects a tight supply of houses for sale and the rocketing prices of those homes. More people see the high housing prices as an excellent time to try their hand at real estate and make a bundle.
A buyer needs an intelligent realtor, one who gets what the hot housing market means and one that can position you and your bid to be seen and accepted. Take time to pick a good agent who has experience and didn’t just sign on for the boom.
Utah is the Place to Be
Something to keep in mind as you look for a new home in Utah, due to Covid, many people are out-migrating from major cities, and one of their prime destinations is Utah.
According to Dave Robison, the Utah Association of Realtors president, over 500,000 California-based people have browsed UtahRealEstate.com. Prices across the Wasatch front have exploded, and the end of the rise is nowhere in sight. You should expect to pay more for that dream house than you would have two to three years ago.
Adding to the high cost of homes is the country’s current lumber crisis with lumber prices seeing a record high. In the past year, lumber has seen a price hike of over 400%. This price hike is a factor in slowing down the production of more houses and the rise in new home prices. Armed with that knowledge, let’s look at some tips for buying a new home in Utah.
Don’t Take Risks with Your Credit
If you’re applying for a home loan, one factor that lenders look at is reliability. Three to six months before you apply for a loan, don’t move your money around or make any big-ticket purchases. Don’t open any new credit cards or amass any kind of debt. The cleaner your paper trail, the better chance of getting a good loan that will help you compete for the right home in this market.
Don’t Clock the Market
Many people will try to time the market as to the best time to buy a house. Right now in Utah, that is not a wise plan. The market is entirely unpredictable, so trying to anticipate it is virtually impossible. The best time to buy is when you find the perfect house, and you can afford it. If you try to anticipate when a better time will be, chances are excellent you’ll miss the opportunity and miss out on your dream house.
Get Pre-approved for Your Home Loan
It is essential to keep in mind; there is a difference between being pre-qualified and pre-approved when it comes to a mortgage. Anyone can get pre-qualified. Pre-approved means a lender has looked over all your financials and they will let you know how much you can afford and how much they will lend.
If you know how much money you have to spend, then a lot of time is saved. You’re not looking at homes you cannot afford. In this housing market, time is of the essence. Knowing what your pre-approved rate is will allow you time to shop and get the best interest rates.
Leave Your Emotions at Home
Do not buy a house with your emotions, instead, trust your instincts. Emotions will help you fall in love with a home and thus, lead you to make some questionable financial decisions. Your instincts will tell you when you’re getting a good house and a good value. Emotions will cloud your head with images of puppies and kids in the backyard. All while ignoring the crime rate of the neighborhood and the fact that the pool in the side yard is actually a sinkhole.
Any money management professional will tell you never make an investment driven by emotion. Buying a home is an investment. Stay calm, ask questions, be wise, make the best deal possible.
Spend Time in the Neighborhood
During the buying process, it’s easy to become hyper-focused on the house itself. Then, after you buy, you look around and realize that your dream home is in a nightmare location.
Drive past your prospective house at different times of the day. Morning, afternoon, and late-night if possible See what’s going on. Do your daily commute. How much time does that add? If you do use public transit to get to and from work, how does that factor?
Where is the nearest grocery store, park, nightspots, restaurant? How about schools and getting your kids to and from?
Even if you don’t have kids, checking out the school system is essential. Here’s a little secret; if you buy a home in a good school district instead of a bad one, even in the same town, the house’s value can be affected as much as 20%.
Your opening bid on a new home will be governed by two factors: what you can afford and what you believe the property is worth. You want your opening bid to be fair; however, you don’t want to offend the seller.
There is a thought that the opening big should be lower. The market will dictate this, and the housing market in Utah is extremely hot and volatile, so the market dictates no on the low first bid.
Find out what other homes in the neighborhood have gone for and compare the average price per square foot. Sizing up by square footage is a wonderful equalizer when you’re bidding.
See what the neighbors have in mind for the future. Are they adding an addition, putting in a tennis court? These things will detract from the prospective property’s value down the line. Resale will be a factor that should be weaved into your buying.
Here’s an obscure fact, sellers are more apt to respect an oddball bid and take it more seriously. A well-rounded number will sound very much like every other bid. However, an oddball number is going to feel more specific, like you’ve really put time and thought into the bid, and your offer has been carefully considered.
Bigger Isn’t Always Best
Don’t buy the biggest, best house on the block. A large house appeals to a relatively small market. Ask yourself how much room you genuinely need. If you buy an enormous house, think about how that is going to affect your resale chances.
Your home’s resale value will be measured against the homes around it. It will only go up in value as much as the houses surrounding it. If you pay $450,000 for your house and your neighbor pays $230,000, your appreciation is limited. In some cases, buying the worst house on the block makes sense because, per square foot, the worst house always trades better than the biggest house.
It’s best to stay within the boundaries of what you can honestly afford in this Utah housing market and get that house now before it disappears. Again, being pre-approved will help you in this decision.
Have You Considered Sleeper Costs?
When you’re buying a new home, think about the mortgage payment; however, you want to consider sleeper costs if you’re putting a budget together for your purchase. Sleeper costs may include property tax, utilities, and home association dues. You’ll also want to budget for repairs and be prepared for property taxes to rise. Budget for sleeper costs, or you could lose your home.
Hire A Home Inspector
Take the time, spend the money and hire an experienced inspector to come in and give the home a thorough going-over before you even think of buying it. A home inspector is brought in to give you all the information possible about the home so that you can make an informed purchasing decision. The inspector’s work is an unbiased, honest appraisal of the condition of the home.
They can also give you a heads up about what may occur down the line due to the home’s condition. The information you get from a home inspector can be used as a bargaining tool to lower the cost of the home. A home inspector will cost about $200; however, the information you gain from an inspector could save you thousands later on.
Know What You’re Getting Into
In cold months with snow and ice, a steep driveway is going to be a problem. Are you willing to deal with that four months out of the year? If not, what’s it going to cost to change that situation? What about when guests come by or older family members?
How are your allergies? In warm weather, cottonwood trees burst; what kind of trees and flowers are growing around your property? Will they cause you misery for seven or eight months a year? What will the cost be to have trees or plants removed?
If you are looking to purchase in the summer months, find out about the heating system. Does it still work? Easy to overlook when it’s 102 in the shade outside. You’ll be sorry when the winter comes, and you’re suddenly facing the need for a new furnace.
If you’re buying during the winter, check on the air conditioning system. When summer comes, and the temperatures are rising, will you have an excellent cooling system, or will you have to replace it?
This is a massive step in your life; don’t take anything for granted.
Building a Home
A great option, especially in this market, is to build a semi-custom home. Personalized details, good neighborhoods, well built, with good resale values make this an excellent option to buying a pre-owned home.
If you decide to go this route, your first step should be to talk to the folks at Revere Homes. They have decades of home building experience, a deep knowledge of the Utah housing market, and trusted financial people.
If you cannot find the perfect home for sale or want something more unique and personal, a good tip for buying a house in Utah would be to build one through Revere Homes.