Salt Lake City—Competition to buy a home along the Wasatch Front remains at an all-time high due to positive net migration, a strong economy and low housing inventory levels. Multiple offers on the same property are common. Windermere Utah Real Estate, a leading residential and commercial real estate company, offers five tips for home buyers to be successful during the busy spring home buying season.
1. Hire a profession –Putting together the right offer and knowing how much earnest money to put on the table are crucial when competing against other buyers. Why risk the biggest purchase of your life without any help? Make sure an experienced Realtor® is helping you. Windermere has more than 270 agents in eight offices across the Wasatch Front to help home buyers and sellers.
2. Get pre-qualified – Talk to a lender and determine how much home you can afford, what your debt-to-income ratio is, and what your down payment will be. A family earning the median household income in Salt Lake County of $65,000 could qualify for a $430,000 home, assuming a 4.5 percent interest rate, 10 percent down payment, and no other debt. That’s a $2,360 monthly mortgage payment including taxes and insurance. The median priced single-family home in Salt Lake County is $335,000.
3. Know what you want – Focus on the features that are important to you. How many bedrooms do you need? What neighborhoods and school districts are at the top of your list? In this fast-paced market, when an agent calls you about a new listing, see it right away. New listings in the Salt Lake Valley are selling within 30 days.
4. Make a full price offer with a larger earnest money deposit – Sellers are typically getting 98 percent to 100 percent of asking prices. In the past, earnest money deposits were small, but in today’s fast-paced seller’s market a larger deposit is more attractive and shows the buyer is serious. An offer filled with contingencies, like asking the seller to purchase a home warranty, is less likely to be chosen over offers with little or no contingencies.
5. Buy sooner rather than later – A new study by realtor.com reveals home prices across Salt Lake County in February jumped 16 percent from a year earlier. In addition, interest rates increased to roughly 4.5 percent for a 30-year fixed-rate mortgage. These two factors mean that today’s Salt Lake home buyers are paying 9 percent more per month (an additional $152) on a mortgage based on the area’s median listing price of $381,000, according to the study. Experts point to future interest rate hikes, which translates to tens of thousands of dollars more in payments over the life of a mortgage.