First Time Homebuyers in the Salt Lake Area, as in other areas, are being repeatedly bombarded with the message that it’s a Buyers Market, you can get screamin’ deals, housing prices are hitting rock bottom. Sellers are desperate to sell and will accept anything, Foreclosures and Short Sales are the easy pickins’. Heard anything like that?
While many buyers are finding and purchasing homes, what I am seeing more and more these days is that first time buyers especially are becoming disappointed, frustrated and understandably burnt out by repeated attempts to “catch the bargain”. Those homes priced under market value (usually short sales and bank owned properties) in the first time homebuyers price range (usually under $250,000) are hotly pursued with multiple offers coming from cash buyers or strong buyers who don’t need closing costs paid by the seller and can close quickly. And with multiple offers, the price goes up. A home listed under market value at an enticing price of $160,000 with multiple offers ultimately sells for its true market value of $180,000. Kinda makes it seem like it’s not so much a buyers market, right?
Well, its still a Buyers Market in the sense that there are many properties for sale in the Salt Lake Area, but you may need to step back and develop a different strategy for purchasing your home, especially if you are like most first time homebuyers, stretching the dollars to get the most house for your money….with an FHA loan and needing 3% closing costs to make it happen. So here are a couple of tips to make it less frustrating:
- Look at your “wants” list versus your “needs” list. Prioritize those elements that are truly important to you, the ones you cannot live without, and then think of everything else as gravy. Remember, there is no such thing as a perfect home and your first home will not be your dream home. Your goal should be to buy a home you can afford, then use the equity in the first home to get into your dream home.
- Revisit your home budget and perhaps reset it, and then avoid looking at homes near the top of your price range.. Keep to the mid range of where you are comfortable payment wise, and then you have a little room to go up in price if you find a really great home with multiple offers.
- Learn that Short Sales are not always the best deal. Short sales are their own little class of real estate and although they seem to be a way of getting a $250,000 property for 185,000….they really aren’t. Properties selling short are oft times set artificially low to generate an offer to go to the bank (A bank won’t look at a short sale until they have an offer to go with it). You can never guarantee that the price listed is even the price the bank will accept. So… you could wait 2 or 3 months for the bank to process the sale and have the bank return a price that is $20,000 more than you can afford to pay.
- (and pssst…. Here is an extra bonus) Foreclosures or bank owned properties are lots easier to work with, take less time….and can usually get you a better deal! But you have to be quick on foreclosures, so don’t hesitate to make an offer, cause others will and you want to be the FIRST OFFER.
- Make a decision when you find a home you like. If you like a property, chances are others are going to like it too. The biggest problem I see with homebuyers today is procrastination…waiting, thinking the deal will get better or another house will be better; then missing out on the house they want because it goes under contract while they are making a decision. This is called “analysis paralysis”, and even in a buyers market, it can cost you.
- Finally, don’t get stuck in one area. There are great neighborhoods all over the Salt Lake Valley and bad pockets as well. Don’t overlook great neighborhoods just because they don’t have the right zip code, and remember that you might pay much more for the location than for the house itself.
To sum it up, have patience and expand your horizons. Home hunting can be fun, so relax and go with the flow. And by all means….pick a Realtor that laughs! (giggle, giggle)