making an offer

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If you’re planning to refinance or sell your home, perhaps the first thing you need to consider is how much it’s worth. Unfortunately, getting an accurate estimate of your home’s value today takes some homework.

How accurate are online calculators?

You’ve probably encountered calculators on real estate sites that make it look easy to value your home. By entering your address, you get a number or a range of values. Unfortunately, not all of these are accurate.

Try out a few calculators and you’ll end up with an uncomfortably wide range of values. The reason is that the quality and currency of their data varies. Moreover, none can look inside a home and see how well it has been maintained or improved.

Appraisals are the most effective

Whether you are refinancing, selling or buying, the only valuation that counts is the appraisal from a licensed appraiser hired by the lender who is doing your refinancing or financing a prospective buyer.

Even if the buyer and seller agree on a price, an appraisal lower than the agreed on price will force the buyer to come up with more cash or the seller to lower his price to save the deal. During times like these when prices are rising, appraisals often are lower than contract prices.

In fact, studies show that owners overestimate the value of their homes about 11 percent of the time.[1] In February, appraisal issues killed 11 percent all deals that were terminated before closing.[2]

Should you get an appraisal before listing?

Getting the home’s value right is the first step in pricing a home before it is listed. Real estate agents can help you decide how to price your home for the market, but if you want to what it’s actually worth before you list it, you should hire an appraiser (generally around $500).

There’s one more reason that a current appraisal makes sense for sellers. Appraisal data is collected and aggregated by data services who sell it to websites with home valuation calculators. Getting a fresh appraisal into the mix increases the odds that the value that buyers see when they surf your listing will be more accurate and current.

Buyers can also hire their appraiser if they do not trust their lender’s appraisal, but fighting an appraisal is rarely a successful strategy. It is better to do some homework before making an offer, especially if you are relying on the values generated by website calculators.

How to find comps

When appraisers determine valuations, they select three or more houses of roughly the same number or beds and baths, same square footage, age and lot size that have sold within the past six months—or ideally, the past 90 days. In a busy time of year, like the spring or early summer, market trends can change prices significantly. These comparable homes, or “comps,” should also be located as close as possible to the house being appraised.

Finding this data can be difficult for the layperson. Real estate agents have access to it, though. They can locate comps using the same criteria as an appraiser and create an estimate of a house’s value, called a comparative market analysis or CMA. A good CMA provides a useful analysis of current market conditions as well as a range of the house under consideration. Best, of all, it is usually free.

What does the future hold?

New methods of valuing houses using “Big Data” techniques that require extensive data from millions of properties are now being developed for use by investors, appraisers and lenders. Someday soon, they also will be available to real estate consumers.

[1] http://www.sciencedirect.com/science/article/pii/105113779290008E

[2] Realtors Confidence Index, February 2016.

Source: totalmortgage.com

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Are you frustrated by the small selection of homes in your price range on real estate sites? Do most fall short of the “must haves” that you need?

The vast majority of the listings you see come from multiple listing services run by local Realtors. Only members of the MLS can place their properties on it, and that means it’s not a complete listing. There are other sources of affordable homes for sale if you are willing to look.

Many of these properties are in “as is” condition and may require some elbow grease and the services of professional contractors to get them in shape. These are costs you should figure into the purchase price before making an offer.

As a general rule, the hotter and more competitive the local market, the fewer affordable homes you will find, either on or off the MLS. Here are some sources that will help you find more affordable homes to consider:

Fannie Mae’s HomePath Program.

Fannie Mae created this program to offer foreclosed homes directly to home buyers who wish to make the home their primary residence. If you wish to put 3%-20% down, you must have a 660 or greater credit score needed for a mortgage.

The program is limited to first-time buyers who have not owned a home in the past three years, and buyers are required to graduate from Fannie’s home buyer education course, which is online. After graduation, you are eligible for closing cost assistance worth up to 3 percent of the purchase price. If you wish to put more than 20% down, standard guidelines may allow a lower credit score.

Fannie’s “First Look” policy makes newly listed properties available to individual home buyers for a 20-day period before investors can buy them. For more information, go to https://www.homepath.com/

Freddie Mac’s HomeSteps Program.

Freddie’s program is very similar to Fannie’s, with a few exceptions. Freddie Mac also features a first look program to give home buyers an advantage over investors and a mandatory online homeownership education program, without the assistance on closing costs. Freddie’s program, however, is not limited to first-time buyers. For more information, go to https://www.homesteps.com/

For Sale By Owner (FSBO) Sites.

When home prices rise steadily, as they have been lately, more owners choose to sell their homes without the help of a real estate agent who charges a commission. Some will use an agent who simply lists their homes on the MLS for a flat fee. They can also list their properties on a site dedicated to FSBO properties.

Last year, the median FSBO home sold for $35,000 less than the median home represented by a real estate professional.[1] Note that if you buy a FSBO, and you are working with a real estate agent, you will be asked to pay his or her fee. In transactions involving a seller’s agent, the brokerages on each side of the transaction typically divide the commission paid by the seller.

Some of the better know FSBO sites are Owners.com, FSBO.com, ForSalebyOwners.com, Byownermls.com. Zillow also lists FSBOs.

Cash-for-Homes Sites.

Companies like HomeVestors, which has more than 600 franchises, buy homes quickly for cash and rehabilitate them to sell to investors or homeowners. They sell homes on local MLSs through real estate brokers. However, it could be worth a call to local cash-for-homes companies to see if they have any properties or to find out names of brokers they use.

Short Sales and Foreclosure Resource (SFR).

The National Association of Realtors certifies Realtors who specialize in selling foreclosures and short sales. To qualify, they must obtain specialized training. To find an SFR-certified Realtor in your market, search the web for that designation. Have your real estate agent contact SFR Realtors to find out what they are listing and properties they are preparing to list. Ask they to notify you in advance on new listings that you might be interested in.

The Next Steps

When you find a home you’re interested in, be ready to move fast with a pre-approval letter from your lender, the name of a good home inspector you trust who’s readily available, and an offer that is attractive as you are willing to make it.

Investors scour these markets using expensive databases of foreclosures to find properties they can flip or convert to rentals. You may find you have to increase the geography of your search to increase the odds you will find a property that will work for you.

[1] National Association of Realtors Profile of Home Buyers and Sellers, 2015.

Source: totalmortgage.com

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If you’re currently in the market to purchase a home, you’re probably pretty frustrated. After all, it has become increasingly difficult to find a property thanks to ongoing inventory constraints.

Factor in investors you have to compete with and renting starts to sound a lot more realistic.

Over the past few years, investors have been leading the recovery, namely the big gun hedge funds buying up thousands and thousands of distressed properties.

But they’ve been going with the buy and rent strategy, as opposed to the classic buy and flip approach.

Still, classic flippers have been able to get back in the game thanks to the rebounding real estate market, though after a steady increase in business, numbers are on the decline again, according to RealtyTrac’s Q1 2014 U.S. Home Flipping Report released yesterday.

During the first quarter, single-family home flips, which RealtyTrac defines as two sales that occur within six months, accounted for 3.7% of all home sales.  That number is down from 4.1% in the fourth quarter and 6.5% a year earlier.

However, flippers have gotten better at what they do because the average sales price of a flipped home during the first three months of the year was $55,574 higher than the average original purchase price, up from $51,805 a year ago.

And the unadjusted return on investment was 30% of the average original purchase price, up from an unadjusted ROI of 28% a year earlier.

House flippers appear to be benefiting by purchasing more expensive homes, which increases their margins, according to some real estate brokers referenced in the report.

However, that means flips are turning over more slowly, with flips completed in the first quarter taking an average of 101 days to complete, up from 92 days in the fourth quarter and 79 days in the first quarter of 2013.

New York Is the Flippiest Metro in the Nation

Wondering where the most flips are taking place? Well, New York led the large metros with a 10.2% share, followed by Jacksonville (10%), San Diego (7.1%), Las Vegas (6.7%) and Miami (5.9%).

New York was also the volume leader with 1,791 flips completed in the first quarter, followed by Phoenix (894), Los Angeles (828), Miami (749), and Riverside-San Bernardino (627).

Metros that saw the biggest year-over-year increases in flips included San Antonio (up 52%), Nashville (up 50%), Indianapolis (up 47%), Austin (up 35%), and Providence (up 33%).

Conversely, flips as a share of home sales were down big from a year earlier in New Orleans (-83%), Baltimore (-81%), Minneapolis (-80%), Richmond, VA (-80%), and Detroit (-76%).

They also took a dive in New York (-37%), Phoenix (-39%), Riverside-San Bernardino (-22%), Atlanta (-57%), and Chicago (-29%).

Are Flips Worth Buying or Simply a Ripoff?

Unsurprisingly, an overwhelming 82% of flipped properties went to owner-occupants, seeing that investors don’t typically flip homes to sell to other investors.

But 18% did go to a buyer with a different mailing address than the subject property, and 43% were all-cash sales.

Flipped homes are clearly very appealing to home buyers, namely because they’re designed to be exactly that.

Flippers know precisely what to upgrade/update/fix/renovate to make the home extremely attractive in today’s market.  They also know how to list homes properly.  If you browse through listings, you’ll probably be drawn to the flipped homes for that reason.

But if you scroll down to the transaction history of the home, you may be a little perturbed to see the list price 50-100% higher than the last sales price that occurred just months before.

Sadly, this market is so constrained that people don’t even care and will bid full price regardless of the huge markup.

At the end of the day, plenty of buyers want a move-in ready home, so paying a premium to get something all ready to go makes sense.

The downside to flips, other than the ridiculous price tags, is the quality of the work. When you walk into some flips, it’s immediately obvious that the flipper used the cheapest materials they could find to get the job done.

Often going as far as to mix and match materials to make things work, even if they don’t actually go together. So flips aren’t necessarily in better shape, they could just be hiding a lot of the bad with superficial upgrades.

As always, do lots of homework, ask a ton of questions, and inspect homes thoroughly before making an offer.

Source: thetruthaboutmortgage.com

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At first glance, the headline doesn’t make a lot of sense. Why would all-cash home sales increase if mortgage rates were hitting new lows for the year?

Not only that, but why would all-cash sales rise when distressed homes sales are down and institutional buying is lower?

Two separate reports came out today with the same basic message, that cash is still king despite the low rates and lack of investor activity.

The National Association of Realtors noted today that all-cash purchases increased to 33% in the first quarter of 2014, up from 31% in 2013 to 29% in 2012.

More than half of all homes purchased in Florida were paid for with cash, while roughly four out of 10 sales in Arizona, Nevada, and West Virginia were all-cash transactions.

At the same time, the distressed home sale share fell to just 15% in the first quarter, down from 17% in 2013 and 26% in 2012.

Over at RealtyTrac, all-cash sales hit a record high of 42.7% of all residential property sales in the first quarter, up from 37.8% in the fourth quarter and 19.1% from a year earlier.

That coincided with a large drop in institutional investor purchases, which fell to the lowest level since the first quarter of 2012.

Such buyers, which are defined as those who purchased at least 10 properties in a calendar year, accounted for just 5.6% of residential sales in Q1, down from 6.8% a quarter earlier and seven percent a year ago.

In large metros, all-cash sales made up more than half of all transactions in Atlanta, Detroit, Las Vegas, Miami, and New York.

The highest percentage of all-cash sales in cities with a population of at least 500,000 were all in Florida:

– Cape Coral-Fort Myers (73.6%)
– Miami (67.1%)
– Sarasota (65.1%)
– Palm Bay (64.1%)
– Lakeland (61.8%)

Additionally, 15% of all-cash purchases in the first quarter were in the foreclosure process, while 10% were bank-owned properties.

Interestingly, these numbers were released on the same day rates on the 30-year fixed-rate mortgage hit 4.21%, which is the lowest point it has been all year. And not really that far off from record lows seen in late 2012.

Why Are There So Many Cash Buyers If Rates Are Still Very Low?

For one, inventory is still tight, so paying with cash is the best way to get your offer accepted, even if you can qualify for a mortgage. Think bidding war.

But NAR also noted that mortgage lending standards remain too restrictive, though they always say that, and would say that even if you could get a mortgage with no money down with just your credit report.

They also pointed to cash sales coming from aging baby boomers, who are trading down or using retirement cash and/or years of home equity to get the job done.

Then there are foreign investors, who tend to use cash, and a recent trend of pulling money from the stock market (now near record highs) to put into real estate. Simply put, it has become an attractive investment again.

RealtyTrac attributed the trend to strict lending standards as well, coupled with low inventory, which gives cash buyers the upper hand when making an offer.

They looked at the brighter side of things, highlighting the fact that individual investors, second-home buyers, and owner-occupants have quickly filled the void left by institutional investors.

Because of that, home prices have continued to appreciate fairly rapidly, though at a slower pace than a year ago.

However, it is somewhat unfortunate that most home buyers can’t even take advantage of the low mortgage rates because they can’t get an offer accepted when competing with a cash buyer. Go figure.

Source: thetruthaboutmortgage.com

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A home for sale by owner opens the door for you to buy the property without a middleman—though you may choose to use your own real estate agent to facilitate the transaction.

Here’s a look at how the homebuying process with a for-sale-by-owner deal can differ from a typical real estate transaction.

For Sale by Owner: Good for Buyers?

When homeowners choose the FSBO (“fizz-bo”) route, they take on all of the responsibilities real estate agents would typically shoulder, from listing the house and showing it to negotiating and closing the deal.

The main motivation for doing so is often cash. Sellers who go it alone can save money on the commission that real estate agents would normally earn. If neither side uses an agent, the deal sidesteps the typical 5% to 6% for agent commissions.

On the buyer’s side there can be a number of benefits of buying a house for sale by owner. First of all, the lack of a listing agent means you have more direct contact with the seller, which might give you more negotiating power.

The seller will also likely have detailed knowledge of the house and neighborhood, which can be a bonus as you decide whether or not you want the property.

However, you may run into some pitfalls with FSBO properties. A seller may love her home and overprice it, potentially complicating matters when you get an appraisal.

Recommended: How to Buy a House Without a Realtor

Using a Buyer’s Agent

Just because a home’s seller doesn’t want to use a listing agent doesn’t mean you can’t engage the services of a buyer’s agent.

You may already be working with an agent who can contact a FSBO seller for you. Or you may need to look for an agent who is willing to take on the job.

In some cases, buyer’s agents may be hesitant to work on a FSBO property. They may be wary of taking on extra liability, or extra work for which they will not necessarily be compensated.

That said, a buyer’s agent can negotiate the sale on your behalf and walk you through the complicated paperwork. If the seller is putting the contract together, your agent can also check the work to make sure you don’t run into any problems.

Sellers typically pay the agent commission. Just be sure the seller agrees to pay the buyer’s agent commission in the purchase agreement.

Here’s what to expect in the buying process when using a buyer’s agent.

Shopping for a Mortgage

Before making an offer on a home, it’s a good idea to shop for a mortgage to get an idea of the terms different lenders offer and how much you are likely to pay each month.

A mortgage calculator can help you understand how down payments of various sizes will affect the numbers. And you may consider getting preapproved for a mortgage to see exactly how much you can afford to spend.

In an FSBO situation, homeowners may have no experience with the home financing process, and getting prequalified or preapproved for a home loan may remove some roadblocks on your path to making a purchase.

Viewing the Home

Your agent can contact the seller and set up an appointment to view the home.

Be on the lookout for sagging floors or cracks in walls that might indicate structural issues. Test windows. Look for water damage on ceilings or walls that may indicate a leaky roof.

Since the seller will most likely be showing the house, take this opportunity to get as much detail about the home’s history as possible. What repairs have been made recently, and which ones haven’t been made in a while? It’s smart to ask about any warranties, and to be sure they will remain after a sale.

Recommended: What to Look for When Buying a House

Getting an Inspection

When buying a home for sale by owner, it’s not in your best interests to skip an inspection. Home inspectors go over the house with a fine-toothed comb, looking at structure, plumbing, electricity, and appliances to see whether they need repair now or in the near future.

If the inspector finds any problems, you can ask the seller to fix them, credit you the cost of repairs, or reduce the sales price. If you’ve already signed a purchase agreement, severe problems found during an inspection can be a reason to pull out of the contract.

Recommended: The Ultimate Home Inspection Checklist

Negotiating a Sale Yourself

If you decide not to use a buyer’s agent, you and the seller will have to negotiate the sale and write up the purchase contract yourself.

You may also choose to hire a transactional agent or attorney who can help you write the contract and ensure it is done legally and in a way that protects your rights.

If you do decide to go it alone, there are a few things to keep in mind.

Recommended: Guide to Buying, Selling, and Updating Your Home

Making an Offer

Before making an offer on a house, check comparable properties in the neighborhood and see if the listing price is reasonable. Doing so can help you pin down what a reasonable offer is.

Consider offering less than the listing price. The seller may ask you to come up in price, but if you start too high, it’s difficult to negotiate down again. You can use the neighborhood comps you’ve researched as a negotiating tool.

Including Contingencies

Contingencies are certain conditions that must be met in order to close the deal. Some common contingencies are a satisfactory home inspection and appraisal.

If a home is appraised at less than the agreed-upon price, a lender may be unwilling to loan the buyer the money. In that case, the appraisal contingency can be an opportunity to negotiate the sales price.

A clear title is another common contingency. The title is a document that shows who has owned and now owns the home. The title company will make sure there are no liens or disputes associated with the property. If there are unresolvable issues, the clear-title contingency gives the buyer a way out of the contract.

Negotiating Fees

It can’t hurt to ask for seller concessions, closing costs that the seller agrees to pay. A seller may agree to help pay for property taxes, attorney fees, appraisal inspections, and the like.

Even in a seller’s market, if the property has been sitting, possibly because the price was too high, a seller may offer a financial incentive to move the home.

Putting Earnest Money in Escrow

Your earnest money deposit is the money you submit with your offer to demonstrate your serious intent to buy.

The listing agent would usually put this money into escrow. But if you’re going it alone, it’s a good idea to engage a title company or escrow company to hold the money for you until the sale goes through.

If you give the money directly to the seller, they may refuse to give it back to you if a contingency causes the deal to fall through, which could mean suing to retrieve your cash.

Determining When You’ll Get Possession

It’s a good idea to be sure your purchase agreement specifies when you will take possession of the new house and receive the keys. Possession may take place immediately after closing, or the contract may give the seller time to move.

The Takeaway

Buying a house for sale by owner can come with challenges and opportunities. It may make sense to engage a professional to help you negotiate, safeguard your interests, and deal with the documents.

If you’re in the market for a mortgage, check out SoFi’s line of fixed-rate mortgage loans that may allow you to put less than 10% down.

SoFi also offers investment property loans.


SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Source: sofi.com

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Embarking on the path to homeownership in Utah? Look no further – this Redfin guide is your key to understanding the nuances of purchasing a home in the Beehive State. Whether you’re a nature enthusiast seeking the perfect mountain retreat, an adventure seeker drawn to the state’s outdoor playground, or someone eager to become a part of its warm and tight-knit communities, Utah is a wonderful place to call home. 

You might be interested in the buzz of Salt Lake City or the quiet charm of smaller towns – either way, Utah’s housing market covers all bases. Whether you’re a first-time homebuyer or a seasoned homeowner, this Redfin guide will help you navigate the homebuying process in Utah. Let’s dive in.

What’s it like to live in Utah?

Living in Utah seamlessly combines natural wonders and inviting communities. With mountains hovering over cities like the snow-clad Wasatch Range, you’ll be able to hit the slopes in renowned ski destinations like Deer Valley. Alternatively, you could visit the beauty of Zion National Park, a testament to Utah’s diverse geography. Utah is also known for hosting lively events throughout the state, such as the prestigious Sundance Film Festival in Park City, one of the largest independent film festivals in the world. Check out this article to learn more about the pros and cons of living in Utah.

Utah housing market insights

The Utah housing market is currently undergoing a series of interesting trends. The median sale price is $543,700, marking a 3.3% decline from the previous year. This shift is accompanied by a decrease in housing demand and a corresponding reduction in supply. Despite the lack of demand, notably competitive cities include Taylorsville, West Valley City, and Cottonwood Heights, where the housing market activity is particularly pronounced. On the flip side, cities like Vernal, Pleasant Grove, and Riverton are making their mark with rapid growth in sale prices, positioning them among the top 10 metros in Utah experiencing this upward trajectory. These dynamics create a diverse landscape within Utah’s housing market, offering challenges and opportunities for those looking to buy.

Finding your perfect location in Utah

Discovering your ideal location in Utah is pivotal to crafting a fulfilling lifestyle. Utah offers diverse settings that cater to individual preferences. Choosing the right spot by using tools like a cost of living calculator ensures access to activities and communities that align with your values, setting the stage for your journey in the Beehive State. To kick-start your exploration, here are five popular Utah cities.

#1: Logan, UT

Median home price: $360,000
Logan, UT homes for sale

Living in Logan includes a blend of a college town and stunning natural surroundings. Home to Utah State University, the city boasts youthful energy with cultural events and educational opportunities. Residents can stroll along the charming Main Street, explore the nearby Cache National Forest for outdoor adventures, and savor local produce at the Cache Valley Farmers Market.

#2: Ogden, UT

Median home price: $365,500
Ogden, UT homes for sale

The city’s revitalized downtown hosts lively art galleries, restaurants, and seasonal events, creating an exciting cultural scene. Outdoor enthusiasts can easily access nearby attractions like Snowbasin Resort for skiing or hiking in the stunning Ogden Canyon. At the same time, the scenic Ogden River Parkway provides a serene backdrop for leisurely walks and biking. 

#3: Provo, UT

Median home price: $440,000
Provo, UT homes for sale

Home to Brigham Young University, the city exudes a youthful atmosphere with cultural events. Some events include the First Friday Art Gallery Stroll and the Freedom Festival. Residents can hike up Y Mountain for panoramic views, explore the historic downtown with its local shops and eateries, and take advantage of the Provo River for recreational activities like fishing and tubing. The cost of living in Provo is 4% higher than in Ogden, mainly attributed to housing, groceries, and lifestyle experiences. 

#4: St. George, UT

Median home price: $523,000
St. George, UT homes for sale

The city’s warm climate makes it an ideal destination for golfing, hiking in Snow Canyon State Park, and exploring Zion National Park’s stunning red rock landscapes. Residents can also enjoy cultural events like the St. George Art Festival, showcasing local artists, and immerse themselves in the city’s historical sites, such as the Brigham Young Winter Home. However, the cost of living in St. George is 7% higher than the national median, so if you’re on a budget, you’ll want to check out affordable suburbs outside downtown.

#5: Salt Lake City, UT

Median home price: $595,000
Salt Lake City, UT homes for sale

With a backdrop of the majestic Wasatch Mountains, moving to Salt Lake City, you can enjoy skiing in nearby resorts like Alta and Snowbird or hiking in Millcreek Canyon. The city’s cultural scene thrives through events like the Utah Arts Festival, and residents can explore historical sites such as Temple Square or immerse themselves in contemporary cuisine and art galleries in the vibrant downtown area.

The homebuying process in Utah

Now that you’ve discovered some popular locations, let’s dive into the homebuying process.

1. Prioritize your finances

Prioritizing your finances first in the homebuying process in Utah is crucial to ensure a stable investment and a comfortable financial future. With factors like varying home prices, mortgage rates, and property taxes, a solid financial foundation, coupled with tools like an affordability calculator, allows you to navigate the market more effectively and make well-informed decisions.

Various programs are available for first-time homebuyers in Utah, including the Federal Home Loan Bank: Home$tart Program, which can assist with up to $7,500 in down payment assistance.

2. Get pre-approved from a lender

Getting pre-approved from a lender is essential when purchasing a house in Utah. The pre-approval clearly understands your budget, strengthens your negotiating power, and expedites the buying process by demonstrating your seriousness to sellers.

3. Connect with a local agent in Utah

Local real estate agents possess in-depth knowledge of the area’s neighborhoods, market trends, and potential pitfalls, ensuring you make informed decisions and find a property that aligns with your needs and budget. So whether you need a real estate agent in Salt Lake City or an agent in Provo, they’re here to help. 

4. Start touring homes

During home tours, focus on the home’s condition, layout, and potential for future renovations. Additionally, pay attention to the neighborhood, nearby amenities, and commute times to ensure that the property aligns with your lifestyle and preferences in the beautiful Utah environment.

5. Make the offer

Making an offer in Utah involves careful consideration of the property’s market value, recent comparable sales, and any unique factors that might influence the negotiation. Your local real estate agent can provide valuable insights into crafting a competitive offer that reflects the current market conditions while aligning with your budget and goals.

6. Close on the house

The closing process in Utah is the final step of the homebuying process, where ownership is officially transferred. It involves legal and financial procedures, including signing documents, paying closing costs, and finalizing the mortgage. Working closely with your real estate agent and lender ensures a smooth and successful closing experience in Utah’s real estate landscape.Check out Redfin’s First-Time Homebuyer Guide for more in-depth information about the homebuying process.

Factors to consider when buying a house in Utah

Along with the geographical location of Utah, there are essential factors to consider when buying a home.

Climate and weather 

Utah’s weather varies significantly between regions, with colder winters, potentially heavy snowfall in mountainous areas, and arid, hot summers in lower elevations that can contribute to wildfires. It’s essential to consider the weather when buying a house, not only for lifestyle reasons but also for practical matters like homeowners insurance that may vary based on the climate and potential weather-related risks.

Water rights and usage

Understanding water rights and usage is crucial when purchasing a house in Utah due to its arid climate and unique water management system. With water scarcity a potential concern, comprehending how water is allocated, any restrictions on usage, and the availability of water sources ensures you can sustainably maintain your property and lifestyle.

Homeowners associations

Many homes in Utah come with homeowners associations (HOAs) which are essential to note when buying a property, as these associations often have rules, regulations, and fees that can significantly impact your ownership experience. Understanding the HOA’s requirements, fees, and any restrictions they impose ensures that your lifestyle aligns with their guidelines and that you’re financially prepared for the associated costs.

Dual agency

Noting that Utah allows for dual agency is vital when navigating the real estate market, as it means a single real estate agent can represent both the buyer and the seller in a transaction. This arrangement requires high transparency and communication to protect both parties’ interests adequately.

Buying a house in Utah: Bottom line

Utah offers an enriching lifestyle with stunning landscapes, outdoor options, and community and cultural events. Assessing factors like housing market dynamics and living costs is important, but the opportunity to create a fulfilling life makes buying a house here a promising and exciting prospect.

Buying a house in Utah FAQs

What is the average down payment on a house in Utah?

The average down payment on a Utah house is typically 10% to 20% of the purchase price. For instance, on a $300,000 home, a 10% down payment is $30,000, while 20% is $60,000. Different loans impact this; FHA-backed loans often require around 3.5% down, like $10,500 on a $300,000 home. Down payment needs vary based on mortgage type, lender policies, credit history, etc.

Do you need a real estate agent to buy a house in Utah?

While not mandatory, having a real estate agent when buying a house in Utah is highly recommended. An experienced agent can provide valuable local market insights, guide you through complex paperwork and negotiations, and ensure you make informed decisions. Their expertise can streamline the process and help you find the right property while avoiding pitfalls.

Is buying a house in Utah expensive?

The cost of buying a house in Utah varies depending on factors like location and property type. The median sale price in Utah is $543,700, which is higher than the national median of $425,571. Generally, Utah offers a relatively affordable housing market compared to some other states, but prices can still vary widely within different cities and neighborhoods. Researching local market trends and working with a real estate professional can help gauge whether the cost aligns with your budget and preferences.

Source: redfin.com

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Most first time homebuyers don’t set out to be landlords. But maybe they should.

That’s where multifamily homes come in.”Multifamily” can mean everything from shiny new duplexes to huge, old subdivided Victorians. And they have the potential to open up some interesting possibilities for the right buyers.

Why buy a multifamily home?

As a society, we have a lot of hang-ups about multifamily properties.

When your mental image of the traditional American dream has always been a large detached house and a yard for the dog, it can be easy to rush past the less attractive but objectively smarter options.

That being said, the average American moves about 11 times in their life—so don’t worry. Your first house probably won’t be your last. It can, however, act as a stepping stone to the one you really want.

Let’s take a look at a quick (and fairly simplified) case study.

Meet Jimbob and Lupita.

They’re just starting out. They’ve got decent jobs, and have really buckled down to save up enough for a down payment of about a 10%. In a perfect world, they’d like to quit renting and cut down on what they pay for housing each month—but they realized that might be asking a lot in their current market.

After getting preapproved by a lender, they’ve determined what they can spend on a house, and after much searching, they find two options.

Option one: a single family home

Jimbob and Lupita’s first option is cute little craftsman that could use a few cosmetic updates, but nothing serious. They’ll need to take out a $170,000 loan to pay for it, which—assuming a 30 year fixed loan and an interest rate around 5%—puts their monthly payment at about $900.

It’s close to what they’re paying for their current two bedroom apartment, but at least they’re building equity.

Option two: a duplex

While the duplex is at the very top of Jimbob and Lupita’s budget and would require a loan of about $210,000, it’s in good condition and needs minimal work. With the larger loan, their monthly payment will be right around $1100. Since they’re good with budgets, it’s still comfortable for them, but only barely.

Of course, that’s not the end of the story.

Though the home has a one bedroom unit and a two bedroom unit, Jimbob and Lupita decide to downsize a bit. They move into the one bedroom and rent out the two bedroom for around $900 a month.

Effectively, their mortgage payment shrinks to $200, leaving them room to pay off their home even faster or put money toward a new property.

Where to find multifamily properties

If Jimbob and Lupita’s hypothetical scenario sounds pretty sweet, fear not. You can get there too. It will require some extra math and legwork to do right, however. First up:  finding the right property.

You can find multifamily homes anywhere you can find single family homes, whether it’s online through services like Zillow or through a local realtor.

But because of the nature of multifamily properties—that is, that they have higher occupant turnover and tend to be treated like the investments they are—there are other options to consider when looking.

Cold calling

Owners are a lot less attached emotionally to investment properties, and you’d be surprised how often they’re willing to sell if the price is decent.

A good tactic is to drive around the neighborhood you’d like to buy in and look for properties that could use a little work. That gives you both leverage when making an offer and some room to increase your investment (and your rent prices) with a little sweat equity after closing.

An even better tactic? Get in touch with landlords currently going through an eviction. Thanks to laws that help protect the rights of renters, evicting truly awful tenants is an expensive and time consuming process that can leave many landlords looking for the exit sign.

Luckily for a smart shopper like you, evictions are public records in most parts of the country. Just do some research as to how to get your hands on this info (it varies by area) and you’re golden.

Foreclosures and short sales

When owners can’t afford their house, it either goes back to the bank (a foreclosure) or gets sold for less than the outstanding loan amount (a short sale). Either way can mean a deal for the next buyer.

The one downside? The process of buying foreclosures and short sales can be fraught with legal issues and hidden costs. So while you might save some cash, the end result might not be as worth it as you expect.

Buying from a wholesaler

Wholesalers snap up property at a discount and then immediately sell it to investors. If you’ve tossed out traditional methods of property searching and are still reluctant to do the legwork yourself, consider searching a wholesaler out. Just be careful and really do your homework—not all wholesalers are good at their job.

What to look for in a multifamily home

Not all multifamily properties are built the same. While most of the factors you look for in a single family home (solid foundation, good school system, you know the drill), still apply there are some quirks that you need to pay attention to.

1. Location, location, location. Sometimes clichés get it right. Location is going to have a lot to do with what kind of properties and tenants you can find, not to mention how much you’ll pay and how much you’ll be able to charge for rent. This is one area where it really pays to buckle down and do some research.

2. How many units? The more units, the more rent money. Of course, the math is not quite as simple as that. More units means more work for you, more cost when things go wrong, more complicated taxes (take a gander at all the tax rules here), and more difficulty qualifying for loans. Above 4 units, and you’re automatically ineligible for some programs. For first-time buyers, a duplex is always a solid choice.

3. A polite, timely tenant. Yup. You heard right. In some situations, your property might come with a tenant or two already installed, and since a sale doesn’t generally alter a tenant’s lease, you’ll want to make sure they’re up to snuff.

4. Resale value. While not quite as important as other factors on this list, any homebuyer would be remiss to not consider what happens if they decide to sell. Demand for multifamily homes is typically lower for a multitude of reasons, so be certain you won’t need to dump the property in a hurry, or risk doing so at a loss.

Financing your new investment property

Most people will tell you that financing an investment property is tricky. And they’re not exactly wrong.

If you’ve done your math right, though, the extra hassle is more than worth it. That’s because you can count your a portion of your projected rent as income, making it easier to qualify for a larger loan.

Though exact requirements will depend on the lender you work with, here are a few of the key differences you could encounter:

  • Higher down paymentr required
  • Higher credit score required
  • Properties with more than 4 units will not qualify for Government loans
  • Higher conforming loan limits, depending on number of units

Why occupy the property at all?

Wondering why you shouldn’t just rent out the whole thing and rake in that sweet, sweet rent money?

If this is your first time buying a investment property, occupying one of the units—at least for a little while—is in your best interest. The reasoning for this is twofold.

First, it allows you to see how you like being a landlord. Maybe it’s a sideline that really fits with your lifestyle, or maybe it’s actually kind of a pain and additional rental properties won’t be in the cards. Either way, the risk is minimal.

Second, there’s a good chance your lender will offer you a lower interest rate if you live in the property yourself.

When you give it some thought, it makes sense. If a person falls on hard times, which of their mortgages are they most likely to pay—the mortgage for their rental property, or the one for the home where their family lives?

Of course, you can make the most of it by planning on occupying one of the units yourself. The more a bank trusts you, the less you’ll pay. Plus, as an owner-occupant, you’ll also be allowed to make use of an FHA loan, which is specifically created for first-time homeowners, with benefits like a lower credit threshold and options for down payments as low as 3.5%.

Acting as neighbor/landlord

Okay, so you’ve done your homework and determined that a multifamily property could work for you financially. Awesome.

But what about that whole landlording thing? How does that work?

If you’re trying to wrap your head around the landlord part of the equation, we’ve got a great post on the basics of being a landlord that covers everything from setting rent to attracting tenants.

However, if you’re planning on occupying the property yourself, there’s also the neighbor part of the equation to consider. While it’s great to be friendly with your neighbors, you should always keep in mind that this is primarily a business arrangement and act accordingly.

Here are a few tidbits to keep in mind:

  • Make your requirements regarding things like noise level and communal outdoor spaces clear in the lease agreement.
  • Document any changes you decide to make to the lease–verbal agreements won’t help you in court.
  • Avoid throwing your power as landlord around unnecessarily. It doesn’t exactly make for comfortable living situations.
  • Study up on your rights as landlord as well as the rights of your tenants. Knowing your stuff can make conversations much smoother and keep you from getting sued.

Source: totalmortgage.com

Apache is functioning normally

Life has gotten a lot more convenient over the past decade thanks to our friend the Internet.

Today, we can shop for clothes, groceries, and just about anything else online, do our banking with text messages and smartphones, or hail a ride home with the touch of a button.

But one area that still needs improvement is real estate, including the notoriously chaotic mortgage world where paperwork continues to be beyond burdensome in the digital age.

Remember when MBA chief David Stevens claimed that the average mortgage file had grown to more than 500 pages?

Well, hopefully the smart guys and gals up in Silicon Valley have a solution for that as well.

Say Hello to Opendoor, the Instant Home Buyer

  • Opendoor is one of the biggest iBuyers of residential real estate
  • They want to help you sell your home quickly with the push of a button
  • Instead of having to clean it, list it, show it, and wait for the offers to come in
  • And make it easier to acquire a new home while getting rid of your old one

A group of San Francisco-based tech disruptors (that’s the buzzword these days) have big plans to make selling your home a lot easier and faster.

Their company, called Opendoor, has one mission. To make it easy to sell your home. To quote them exactly, their tagline appears to be, “The easiest way to sell your home.”

Note the word easy; nowhere on their one page website do they say highest price. Or anything to do with price for that matter. Just that you’ll receive an “instant offer” online and be able to close in 3 days. Wow.

Simply put, they want to bring liquidity to real estate, similar I suppose to how stocks are bought and sold within milliseconds online.

That’s the draw of buying stock. You can unload it whenever you want and get your hands on the cash for other needs with minimal delay.

One of the major downsides to real estate as an investment (or in general) is that it’s extremely illiquid.

If you own a piece of property and want to dispose of it, you’ll need to hire a real estate agent, create a listing, spruce up the place, let people tour the property, and hopefully land a suitable offer.

The process, if you’re lucky, will only take a month. More realistically, it’ll take a few months from start to finish, barring the recent home buying frenzy that has probably given every homeowner unrealistic expectations on selling timelines.

It Might Make Sense to Use Opendoor If You Must Sell Quickly

  • Like most convenient services there is a price that must be paid
  • Opendoor may make sense if you have to sell your home quickly for some reason
  • But there’s always a cost to doing things easier
  • And that could mean a significantly lower offer price for your home

To be clear, Opendoor doesn’t plan to replace real estate agents or reinvent the entire process. At least, not just yet.

They simply want to provide a quicker way to sell when you don’t have time to go through the entire process, whether because you’re relocating for a job or simply because you need capital this week, not three months from now.

Perhaps you’re having trouble keeping up with mortgage payments and just want to avoid foreclosure. There are plenty of reasons why homeowners may want to sell immediately.

Apparently there’s some algorithm that determines an appropriate selling price, similar to how Zillow provides you with a Zestimate.

So far they’ve snagged $9.95 million in funding, though the lead is from Opendoor co-founder Keith Rabois of Khosla Ventures.

Other notable individuals involved with Opendoor include PayPal co-founder Max Levchin, former YouTube and Facebook CFO Gideon Yu, Yelp CEO Jeremy Stoppelman, and Facebook vice president Dan Rose.

With that group of investors, it’s certainly going to get interesting in a hurry.

How Selling a Home with Opendoor Works

  • You request an offer to sell your home
  • A “home expert” prepares an offer based on market data in 24 hours
  • You review the offer and sign if you accept it
  • They provide a free home assessment to determine repair costs
  • You choose a closing day and they buy your home

Opendoor basically takes the guess work and uncertainty out of selling a home by just agreeing to buy it from you for a certain market-driven price.

That makes them an iBuyer, or instant buyer, of homes, as opposed to a maybe-buyer who takes 30-45 days to close on your home, assuming they get to the finish line.

Instead of having to find a real estate agent, clean it, list it, stage it, hold open houses, and wait and hope that it sells for the price you want/need, they’ll buy it for you in a matter of days.

All you need to do is request a free, no-obligation offer by entering your address and telling them about your home.

If your home qualifies, a local market expert will  prepare your offer in just 24 hours, relying on your property’s unique features and market data.

The offer is good for five days, but you can proceed whenever you’d like. It can also be refreshed at any time after that period.

Assuming you accept, it will be subject to an in-person inspection to determine if repairs are necessary.

If they are, you can make them yourself or leave it up to Opendoor, in which case the costs will be deducted from your sales proceeds.

You get to choose your closing date as well, between 14 and 60 days, whether you want to unload it quickly or at a later date (and changes can be made free of charge).

That can come in handy if you need a quick sale, perhaps to avoid a contingent purchase. Or if you need cash fast from the sale of your home.

But they’re happy to let you stick around a while too. This flexibility is one of the main perks of iBuying, especially if you’re acquiring a new home.

Opendoor Pricing and Fees


Despite the enormous convenience, Opendoor claims to save you money too, with the average service charge around 7.1% of the sales price versus a 7-10% cost if you go the traditional route.

You can see a breakdown above of what a traditional sale might cost versus selling to Opendoor.

Of course, what’s the sale price in both scenarios? If they’re the same, great. If the one with Opendoor is significantly lower, the math changes quickly.

These head-to-head comparisons always seem to feature the same sales price, which probably isn’t a reality.

Another key factor is repair costs. Will Opendoor hold you accountable for thousands in repairs, or will they go relatively easy? I guess it depends on the property in question.

Regardless, you do have to factor in some “cost” for the time and effort saved by not having to list yourself.

And as they point out, there is a cost to owning two homes at once, assuming you’re not benefiting from it.

Opendoor Versus the Competition

Not all iBuyers are created equal, despite there being several of them nowadays like Zillow Offers and Offerpad.

Opendoor points out the subtle, but important differences in their offerings versus the competition.

Notably, they allow you to cancel your home sale at any time for any reason, which apparently isn’t the case with Offerpad.

They also allow a 14-day “Late Checkout” if you need to stay in your home a bit longer before you move into your new abode.

However, my guess is all these companies will make adjustments over time to match up with the others.

So ultimately it will probably come down to pricing if you shop different iBuyers at the same time.

Buying an Opendoor Home

  • Opendoor sells the homes it buys shortly after refurbishing them
  • So you can search their listings on their website/app
  • And then buy a home directly from them too
  • With or without your own real estate agent

If you happen to be a home buyer, you can purchase an Opendoor property.

After all, if Opendoor is buying properties from home sellers, they’ve got to unload them on the other side.

They provide some benefits to buyers as well, including the ability to view an Opendoor home via the Opendoor Homes mobile app.

You can actually open the door so to speak by unlocking it with the app. Or at least getting the code to the lockbox. And each home is open daily from 6am to 9pm, so there’s always a convenient time to visit.

Once you’re ready to make an offer, you can do so via the Opendoor app or their website, and it only takes 48 hours or so to hear back.

They say it generally takes 20-30 days to close, similar to a traditional home purchase, and they require you to be pre-approved for a mortgage before making an offer.

If you have a buying agent, you can use them and Opendoor will pay them a commission. But it might affect your sales price.

Lastly, there’s a 30-day satisfaction guarantee if you don’t love your home, they’ll buy it back.

Update: They also recently launched a trade-in program where you can sell your home and get a new one all through their company.

Where Opendoor Is Currently Available

At the moment, Opendoor is available in the following metros/cities:

  • Asheville, NC
  • Atlanta, GA
  • Austin, TX
  • Boise, ID
  • Charlotte, NC
  • Columbia, SC
  • Dallas Fort-Worth, TX
  • Deltona, FL
  • Denver, CO
  • Greensboro, Winston-Salem and High Point, NC
  • Houston, TX
  • Jacksonville, FL
  • Killeen, TX
  • Knoxville, TN (and Chattanooga)
  • Lakeland, FL
  • Las Vegas, NV
  • Los Angeles, CA
  • Miami, FL (including Fort Lauderdale and Palm Beach)
  • Minneapolis-St. Paul, MN
  • Nashville, TN
  • Ogden, UT
  • Oklahoma City, OK
  • Orlando, FL
  • Ormond Beach, FL
  • Oxnard, CA
  • Phoenix, AZ
  • Portland, OR
  • Prescott, AZ
  • Provo, UT
  • Raleigh-Durham, NC
  • Reno, NV
  • Riverside, CA
  • Rochester, MN
  • Sacramento, CA
  • Salt Lake City, UT
  • San Antonio, TX
  • San Diego, CA
  • Sarasota, FL
  • Tampa, FL
  • Thousand Oaks, CA
  • Tucson, AZ
  • Ventura, CA
  • Winter Haven, FL

Their hope is to offer the service nationwide at some point in the near future, and they have plans to expand to additional metros this year.

Opendoor’s Mortgage Division

  • You might be able to finance an Opendoor home with an Opendoor home loan
  • If buying in the states of Arizona or Texas
  • The company provides a 1% credit for closing costs
  • And the ability to get pre-qualified quickly

The company has since introduced a financing arm known as “Opendoor Mortgage” that provides financing for buyers of Opendoor homes. It’s only available in Arizona and Texas at the moment though.

The name has since been changed to Opendoor Home Loans.

They claim to offer competitive mortgage rates and the ability to get pre-qualified in under 30 minutes. And if everything happens under one roof, they might be able to close faster.

So it seems they’re trying to make it a one-stop shop, which makes sense because time is of the essence and you can’t have a third-party lender slowing things down.

At the moment, they have a promotion where a buyer can get a so-called “ultimate mortgage.” I’m not exactly sure what that means, but it does come with 1% off the purchase price in the way of a credit for closing costs.

This could make Opendoor Mortgage more competitive than other lenders assuming the mortgage rates and lender costs are comparable.

Opendoor Acquires Open Listings

In September 2018, Opendoor acquired Open Listings, a discount real estate brokerage that connects home buyers with local real estate agents.

It’s different in that agents and their services are on-demand, as needed. So a home buyer can control as much or as little of the process as they wish.

And in exchange for that hands-off approach, home buyers who use Open Listings get up to 50% of the typical buyer agent’s commission back.

So instead of the typical 2.5% commission, only 1.25% is paid via the sales price and the other 1.25% is returned to the buyer either via reduced closing costs or via check in the mail.

The company has already refunded over $8 million to homeowners whose collective purchases exceeded $1 billion.

Open Listings was launched just three years ago in Los Angeles, part of Y Combinator, with a simple goal of making buying a home easier and more affordable.

The merger aims to create an end-to-end solution for buying, selling, and trading in homes, the first of its kind in the industry.

Opendoor and Redfin Partnership

In July 2019, Opendoor announced a partnership with competitor Redfin.

While it sounds like an odd marriage, given the existence of a very similar RedfinNow product, it opens up some new markets for Redfin.

The agreement will allow home sellers in the cities of Phoenix and Atlanta to request an Opendoor offer through Redfin’s website or mobile apps, as seen in the screenshot above.

Currently, RedfinNow isn’t available in those markets, so perhaps it a free test-run.

Well, Redfin will actually make a profit if a customer decides to sell to Opendoor, and they’ll be able to see demand for iBuying in those cities.

Opendoor’s home listings will also appear on Redfin’s website and mobile apps.

In mid-June 2021, the company announced that it had reached the 100,000-transaction milestone.

Read more: Is Google about to replace your real estate agent?

Source: thetruthaboutmortgage.com