Buying your First Home in Utah
Congratulations on your decision to buy your first home in Utah! Buying your primary residence is a big step and it’s very important for first-time home buyers to be well-informed about the home-buying process. The better informed you are about your mortgage payment, first-time home buyer programs, loan options, etc, the better you will feel about taking the leap as a new home buyer.
There are a number of factors to consider when buying your first home in Utah where the cost of living may be different from where you live- if you’re coming to us from out of state.
I am sharing 10 tips that I hope will make the process smoother and easier for you.
Tip #1: Get pre-qualified for a mortgage
The first step is to get pre-qualified for a mortgage. This will make your offers stand out and send the message that you’re a serious buyer. Meeting with a trusted loan officer will give you a better understanding of your budget, and the types of loans you qualify for such as FHA loans, Conventional loans, and VA loans. You will fill out a simple loan application and in no time you’ll have a good idea of how much you will need to save to put down as a down payment and your loan amount. A mortgage financial institution can also explain the options for getting the best loan with the best interest rate for you and your situation.
The more money you can put down, the lower the loan amount, and the better the terms of the loan. If you’re a doctor or dentist you can get pretty amazing terms on loans, even if you’re still in residency. Lastly, when pre-qualifying, I recommend you ask your loan officer to run the numbers based on the monthly payments you’re comfortable with. Try to avoid asking “What’s the most I can qualify for”? It may be more than you’re comfortable with. Ask for a price range and go from there. Keep in mind that a pre-qualification is not the same as a pre-approval.
Once you are pre-qualified, you can start shopping and touring homes with a buyer’s agent. Once you’re under contract your lender will ask for a few more documents (paystubs, tax returns, bank account statements among others) and send everything for review by a third party to do what’s called “underwriting’, which is where they look at your situation closer and before they issue the final pre-approval. Lastly, if you don’t know where to start when it comes to choosing a lender, I am happy to give you recommendations of reputable, trusted lenders I work with.
Tip #2: Research the market in the area where you want to buy your first home in Utah
Look at factors such as median home prices, trends in home values, and the supply and demand for homes in the area. At this point, it would be a great idea to speak with a real estate agent who can help with providing recent and accurate statistics. Utah is a non-disclosure state, which means that recently sold data is not available to the public except through a licensed agent. If you’re not ready for that or you’re “just wondering” you can find fairly good recent data HERE. In addition to home sales for the state, be sure to research the counties themselves. Buying in Weber County won’t be as much money as buying in Salt Lake County. It all depends on your needs, budget, preferences, and of course your commute. If you need a bigger home you will get the most bang for your buck in Weber and Davis counties. If you don’t need that much space but you want to be close to downtown Salt Lake City, then perhaps you would like the Avenues or Sugar House, or a condo right in the city!
Tip #3 Make a list of your must-haves
This will help you narrow down your search and focus on properties that meet your needs and budget. First-time buyers can get caught up and overwhelmed and sometimes want to look at everything, which can lead to more confusion. When searching for homes, narrowing it down as much as you can help! Consider location, number of bedrooms and bathrooms, layout/floorplan, house vs condo vs townhome, kitchen features, outdoor space, storage space, age, and condition of the home. Are you ok with a fixer-upper?. It’s also important to think about the features and finishes you prefer as well as your future plans.
Tip #4 Work with a real estate agent
An experienced agent can help you navigate the home-buying process and provide valuable advice and guidance. The good news is that as a buyer in Northern Utah, using an agent incurs no cost to you if you buy your home from the multiple listing service (MLS). First-time homebuyers in particular need guidance. If that’s you, this will likely be the largest purchase you’ll make. An agent can help you understand the legalities of the purchase contract, advise you in determining if the asking price is fair or if there is room for negotiation, and get you a lower purchase price. A good agent will know the area and you find the perfect place for you. I recommend you get your own representation and not use the seller’s agent. Why? Because it’s in your best interest to have your own representation and not share it with a person in the same transaction.
Tip #5 Don't Rush Into Making An Offer On A Home
Buying a home in Utah or anywhere else is a huge commitment, so take your time and make sure you’re comfortable with your decision. Drive the area at different times of the day and on weekends. Research the schools. Even if you don’t have kids, high-rated schools equal good neighborhoods. How long do you have to drive to buy groceries or to the gym? How’s the area in general? Sleep on it.
Tip #6 Understand The Closing Process And Any Fees Or Closing Costs You May Be Responsible For
The proceeds you’ll need will depend on the purchase price and the terms of the contract. In real estate, there is nothing worse than getting to closing day and realizing you don’t have enough money to close. Staying in touch with your agent and your lender will avoid any misunderstandings. Take a close look at your closing disclosures and make sure you have all of your questions and know exactly how much you need to bring to the closing table.
Tip #7 Consider the Location
Think about factors such as proximity to work, schools, and amenities. Here’s a story- I once worked with a young couple of first-time buyers. They were SO excited about putting in an offer on this cute townhome that checked all of their boxes. I then noticed that there were some train tracks very close to the complex. We asked the sales agent about it and he said he heard there was a train “maybe once a day”. It was a new townhome complex with no one living in it yet. My clients were concerned about the train tracks but still excited. So, they slept on it. The next day, the wife and her friend went door-knocking in a nearby neighborhood to ask about the train. Nearby residents reported the train ran at least 3-4 times a day and 1-2 times at night- and it was very loud! My clients decided to shop in a different location.
Tip #8 Inspect the home thoroughly
It’s a good idea to hire a home inspector to check for any issues with the property. Yes, it’s a cost for you but it’s worth it. Once the home is inspected we can further negotiate a seller credit if there are any serious repairs. I once helped a buyer buy their first home and their home inspection showed the roof needed to be replaced. We asked for a seller credit, which they agreed to give us. My clients closed on the home and 3 months later had a new roof installed.
Tip #9 Think about the long-term
While it’s important to consider your current needs, it’s also a good idea to think about your future plans and how the home may meet those needs. I always tell my clients to think about where they want to be in 5 years. Most people move out of their first home in 5-7 years. If that’s the case for you, consider the resale value of the home you’re buying. It is also smart to find the best deal you can and find ways to improve the home by doing upgrades that will increase value.
Tip #10 Don't be afraid to negotiate
When buying a home in Utah It’s common to negotiate on things like the price, closing costs, and repairs that need to be made. I recommend you think about what’s most important to you. If it’s price, we can focus on that. If it’s the monthly payment, we can focus on negotiating a buy-down of your interest rate. If it’s cash at closing, we can ask the seller to pay closing costs. Your real estate agent can help you navigate the negotiation process. depending on your goals.