Whether you are buying your first home or looking to downsize, it pays to
understand the current housing market.
April marked the first rise in the Utah median home price in four years. With
this market stabilization, conditions have shifted from an extreme buyer’s
market to one more in favor of both buyers and sellers. With the change in
real estate conditions, here are some tips for home buyers and sellers who
are just now getting in the market.
Tips for Buyers
1. Be prepared for homeownership. Today’s record-low interest rates
will greatly expand your buying power, but you still must be mindful of your
financial situation. Remember that your mortgage payment won’t be your
only housing expense. Be ready for other costs like yard care and regular
maintenance. Also think about how long you want to stay in the property
since there are costs associated with buying and selling. A general rule is to
plan to be in a home three to five years so you can recoup your closing costs
should your home increase in value. Finally, you should learn about any tax
consequences you might incur with your purchase.
2. Get pre-approved for a mortgage. This is advisable in any
market, but this is essential for today’s buyers. Pre-approval will give you
credibility with the seller when you submit an offer on a house. This is crucial
for situations where there are other buyers who want to purchase the home.
Talking with a mortgage lender in advance of your home search will also help
you evaluate a variety of diverse mortgage programs that cater to various
types of buyers.
3. Learn about the market. After you speak with a mortgage
lender, you’ll have a better idea of your price range and can begin assessing
the market. Within your price range and designated areas, your Realtor can
assist you in evaluating how many homes are available, how fast they’re
selling and the sales price. This will help you know how much competition
there is from other buyers, and you’ll be able to better gauge how fast you
need to act when new properties are put up for sale.
4. Be ready for multiple offers. If you do find yourself competing
with another buyer for a property, be ready to submit your highest and best
offer. You don’t want to overextend yourself and go out of your price range,
but you do want to offer enough so you are competitive. Be aware that you
could lose a favorite property to another buyer if you put in a low-ball offer.
Submitting a large earnest money check will also help your offer stand out.
5. Be flexible. As your Realtor helps you learn more about the
market in your specific area, you’ll be able to set realistic expectations about
what you can afford and competition you’ll receive from other buyers. Know
that every house isn’t perfect and determine what items you’re willing to
compromise on. Once you have a signed contract, make sure to meet all your
deadlines and be flexible with the seller if it’s feasible.
Tips for First-time Buyers
1. Be pre-qualified for a mortgage and know what you can afford.
2. Be careful not to overextend yourself and buy a home that eats up most
of your budget.
3. Be prepared for additional homeownership costs that are in addition to
the mortgage payment, including maintenance, repairs and utilities.
4. Buy a house that has some room to grow since many people spend
longer in a home than they originally intend.
5. Plan to stay in the home at least three to five years to help recoup
Tips for Move-up Buyers
1. Determine whether it makes more sense to sell your existing home or
rent it out. Consider all your options.
2. Price your existing home competitively. Even if you sell your home at a
lower price than you intended, you’ll save money in the long run because
you’ll be buying the more expensive home at a competitive price. In other
words, you’ll save more on the higher-priced home.
Tips for Downsizing
1. Determine whether you’d like to remain in your neighborhood or
whether you’d like to move to a retirement community.
2. Discuss what you’re going to do with excess furniture and personal
items. Decide whether you’re really ready to get rid of some of your stuff.
3. Consider whether you want a maintenance-free community or whether
you’d like to take care of your own yard.
Tips for Sellers
1. Price your home competitively. To do this, you need to know the selling
price for homes that have recently sold in your neighborhood. You also need
to look at your competition, which will be the homes near you that are
currently for sale. Then list your home according to the facts and figures. If
the price doesn’t match you’re willing to sell for, then you may want to
reconsider selling the home.
2. Don’t wait to lower the price. You will receive the most interest in your
home during the first 30 to 45 days it is on the market. Avoid starting out
with a high price and then lowering it later because you’ll have lost much of
the interest it would have initially received.
3. Make sure the home is exceptionally clean. Get rid of clutter and make
the house look as close as possible to a model home.
4. If you’re not receiving many showings, ask potential buyers who tour
the house what they thought of the property. Based on their feedback, you
can make adjustments to help the home be more attractive to buyers.
5. Be willing to accommodate buyers’ requests for showings. If you allow a
buyer to tour the property when they would like, you’ll receive more
showings, making it more likely that you’ll sell the house.
Lori Chapman is the president of the Utah Association of Realtors.