Is Now a Good Time to Buy in Our Market?

In Salt Lake City, sales are increasing and homes are getting more expensive. Does this mean you should buy now or wait?

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Is now a good time to buy a home in Salt Lake City? As 2016 comes to an end, I thought I’d share with you a few stats from the residential real estate market to help answer that question.

It’s certainly been a crazy year. We’ve continued a four-year trend of rapid appreciation, and 2016 didn’t disappoint. In Salt Lake County, the market bottomed out in 2012 as far as median price goes, but since then we’ve seen a 38% appreciation. In fact, the NAR predicted that our county’s median price would grow 4.2% this year. They were wrong—we nearly doubled that. The final numbers through December haven’t been released, but it looks like the median price will see a rise of about 8%.

According to Zumper, Salt Lake City was the 53rd fastest growing market for rental prices, which puts us in the middle of the pack. We saw a 2-bedroom apartment, on average, increase in rental price by 12%. Around the nation, rental rates are slowing down as far as price appreciation goes, but they’re getting more expensive in Salt Lake City.

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Buying now will get you the cheapest possible price.

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As we’ve been saying for a while now, interest rates are going to go up. In fact, they’ve already gone up. Earlier this year, the national average rate for a 30-year fixed loan was around 3.5%. For most of our clients closing now, that rate is closer to 4%.

Sales were strong heading into the year, and they’re still increasing. In October, for example, there were 1,077 single-family home sales, which was a 2.6% increase over October 2015. In October 2016, the median price was $298,000, which is up 10.4% over October 2015.

So, should you buy now? If you care about money, then yes. Homes are getting more and more expensive. I do expect to see a softening in the next two to three years, but we won’t see an extreme downturn by any means. If you factor price appreciation coupled with interest rates, especially if you’re renting, waiting for that possible softening is not worth your time. 

If you have any questions about our market or you’re thinking of buying or selling, feel free to reach out to me. I’d be glad to help!

What Happens During Your Due Diligence Period?

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Buying a Wasatch Front home? Click here for full MLS access

You saw a bunch of houses and now you are under contract for the one you like. Before you can move in, you have to check on the health of the property. The due diligence period is your opportunity to make any repairs or get any inspections you want.

We recommend doing a basic home inspection, but you can also order a mold test, radon test, soil test, structural engineering inspections, or a title search.

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In Utah, homes are sold as-is, so the seller can refuse your repair requests.

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After your inspections are completed, you will create a list of things you would like to be fixed and send that list to the seller. The seller will then review your request. Be aware that the seller can simply refuse all of your requests because in Utah, homes are sold as-is. The seller is not required to fix anything you have a problem with.

As a buyer, what can you do? Basically, you have three options: you can cancel the transaction and get your money back, negotiate with the seller to find a middle ground, or proceed with the purchase regardless of the needed repairs.

If you have any questions about the due diligence period or about real estate in general, give us a call or send us an email. We would be happy to help you!

What’s the Difference Between an Improved and Approved Lot?

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Buying a Wasatch Front home? Click here for full MLS access

Today, I want to talk about lots and land in the Wasatch Front area. People tend to think of land just like they think of residential homes. They look at the information online, feel excited, and call us to build a house! However, it’s not that simple. There are a lot of factors involved with buying a lot, including if the property has been improved or approved.

When we ask if a lot is approved, we ask if the city has approved building on the lot. Does the zoning for the area fit the lot? Is the lot meant for a residential property? There is much to consider to ensure a home can be built on a lot.

Most of the lots for sale in Salt Lake County may be buildable but they haven’t been approved yet. It’s quite rare to buy a lot that has already been approved. You have to check in with the city because there’s a laundry list of things that have to happen before the home can be approved. You need house plans, paid permits, utilities, and so much more.

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Not all lots are approved to build on.

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You should also check to see if the lot is improved, which means the lot has had physical improvements added to make the property buildable. Some of these signs are not visible to the naked eye. However, if you see a green power box on or near the property, or if there is piping coming straight out of the dirt, those are signs that improvements have been made because you can tell that utilities have been brought to the property.

Subdivisions that are newly improved with roads, curbs, gutters, and sidewalks have lots that are most likely improved and approved. Some house plans might not have been approved yet, but most of them should be buildable. These subdivisions will be in rapidly growing areas, like South Jordan and Daybreak.

We often handle eastside Salt Lake projects and many lots purchased in that area are not improved or approved. Clients call all the time asking for a number, but the costs for improving a lot can vary wildly. We’ve had lots that cost more than $175,000 to improve, and that’s before you even build a house.

For example, there’s a lot right now on Kennedy Drive that’s listed for $160,000. That sounds like an amazing deal, but this lot has been for sale for years because $160,000 is a fake price. It’s going to cost hundreds of thousands of dollars to improve that lot. You will probably be half a million dollars in before you can even build on that lot.

If you have any questions about lots and land or about real estate in general, give me a call or send me an email. I would be happy to help you!

You’re Not Saving Money by Finding a Home on Your Own

Selling your Wasatch Front home? Get a free home value report

Buying a Wasatch Front home? Click here for full MLS access

Today, I want to give you an analogy in order to clue you into one of the most common misconceptions we see here in real estate.

A listing agreement is a form signed between a seller and any brokerage and agent that represents them. Prior to the home being listed on the market, this agreement has been signed and agreed upon between both parties. Why is this important?

Well, on this document, the seller and the brokerage have already agreed to a commission that will be paid. Throughout the years, it’s been common that this number is right around 6%, with 3% being set aside for the listing agent, and the other 3% set aside for the buyer’s agent.

We find buyers all the time who think that if they just go out and find a home themselves, they will be able to knock off 3% of that commission, but they are mistaken. To explain how this works to buyers, we use what is called “The Costco Analogy.”

When you go to Costco and get your groceries, you can pay with either your credit card or cash. If you pay with cash, would you demand that Costco whack 3% off your purchase price because they didn’t have to pay the credit card transaction fee?

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Hiring a buyer’s agent doesn’t cost you a thing.

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Of course you wouldn’t, that’s ridiculous. Well, that’s the same idea as somebody “saving” 3% on a commission when they don’t hire a buyer’s agent. The listing agreement has already been signed and whether you are represented or not, that 3% commission is set aside for a buyer’s agent. All you accomplish by not using an agent to help you find a home is giving the seller’s agent a bonus.

This is probably the most common question I’ve gotten in my entire career. The reality is, Costco has a preexisting agreement with the credit card companies before you walk in the door, the same goes for the seller and listing agent.

So, hire a buyer’s agent if you’re out looking for a home. They don’t cost you a thing, and can really help you sort through all the listings out there in order to find the perfect one. They can also negotiate on your behalf to make sure you get the best deal possible.

If you have any questions for us or are looking to buy a home on the Wasatch Front, give us a call or send us an email. We would love to hear from you!

Are Rising Interest Rates on the Horizon?

 Selling your Wasatch Front home? Get a free home value report 

Buying a Wasatch Front home? Click here for full MLS access. 

Today we are going to talk a little bit about interest rates here in Utah. There has been a lot of hysteria lately about what’s going on with them, and a lot of people are concerned about what’s going to happen with them and how it will affect the market as a whole.

Inevitably, interest rates are going to go up, and the increase should start within the next 30 days. What effect will this have on the market? When interest rates go up, your purchasing power will likely go down as well. We are probably not going to see interest rates hold down prices at all in Salt Lake City, as is expected to happen nationwide. Our market is just too strong for this to happen.

This is something you really should take into consideration if you’re thinking about buying. There are plenty more details I can go over in person, but if you have any questions for me, feel free to shoot us a quick email or give us a call, and we can get you pointed in the right direction. We look forward to hearing from you soon!

Are You Really Ready to Buy a Home on the Wasatch Front?

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Today, we want to discuss the "what if's" of real estate and how they can affect your ability to make informed decisions in the marketplace. 

A common question we hear is, "What is the first thing I need to know in order to make smart decisions in real estate?" We explain that it all depends on how they handle the "what if" scenario. Whenever we walk into a home with a client, we immediately start thinking of "what if" scenarios. Examples include: What if you lose your job? What if an accident happens? What if you have kids? What if you get a promotion?

Life is unpredictable, but you can prepare yourself for the unexpected by running various "what if" scenarios through your head. Doing this will help you make a wise value decision. This means you'll ask yourself what the home has to offer in terms of location, what the upsides of the property are, and what potential downsides the property has.

Helping you determine the worth of a property according to your specific situation is where we come in. We're big on stats, so we can give you the real value of the home as well as its value relative to you. We provide you with the information so you can make the best possible decision.

If you're looking to buy or sell a home, ALWAYS keep the "what if's" in mind. If you have any questions about this, or if you would like our assistance with anything real estate related, we would love to hear from you. Give us a call or shoot us a quick email for the best service in town! 

This New Loan Program May Be Your Ticket to the Home of Your Dreams!

The Wasatch Front real estate market is diverse with both buyers and sellers alike seeking a variety of different properties. As a prospective seller, you can find out the market value of your property with a free home value report right here, or if you're looking to purchase in the Wasatch Front area click here for full MLS access. Always feel free to reach out to us for any questions regarding the current market conditions, or the value of your property at 801-882-7427.

Some interesting news just came out a few days ago we felt we should share.

Freddie Mac and Fannie Mae have recently announced a new 3% down payment conventional loan. This is fantastic news, as the FHA lowered loan limits to $300,000 in Salt Lake County just last year.

With this new 3% down loan program, loan limits go up to $417,000! This is great news for home buyers out there looking for a fantastic program with a lower down payment. It's also good news for sellers, as more buyers are eligible to purchase your home. 

This new program opens a lot of doors for a lot of people, so we thought we should share it with you! 

If you have any questions about market conditions in the Wasatch Front area, or would like us to cover a particular topic in a future video, please give us a call or shoot us an email. We would love to hear from you!