How to Buy a Home in Salt Lake City in 2022
Salt Lake City continues to be a top real estate market in the United States. In fact, Salt Lake City was recently named by Realtor.com as the “Top City of 2022” and they anticipate our city will have top sales and price growth in the nation nearing 15% this coming year. After three years of competitive home buying, Salt Lake buyers (and sellers) are adjusting to a new normal. And a new set of rules has also arisen for those wanting to be successful. Looking for the keys to buyer success? Read on for our tried-and-true tips for how to buy a home in Salt Lake City in 2022.
#1 Get a Fully Underwritten Mortgage Pre Approval
When a home comes your way, you want to be 100% ready to make a competitive offer. Aside from a cash offer, a fully-vetted pre-approval letter is the next-best thing. Having a fully-vetted pre-approval makes your offer more competitive. It assures the seller that they won’t run into any issues during escrow. It also saves you the work and stress of trying to scramble in the middle of an offer to secure financing. Here are six things to avoid when applying for a mortgage.
#2 Make a Competitive Offer
There are four elements, other than price, that make your home offer more likely to be accepted: financing, earnest deposit, appraisal and inspection conditions.
It is no secret that sellers like cash. And right now pre-approved buyers are being beat out by competitors with cash. If you have resources for cash, now is the time to call in on that. Some clients are paying in cash and then refinancing after to pay themselves back. If you don’t have cash, the next best thing is a fully-vetted pre-approval letter as detailed above.
The higher the earnest deposit amount, the more likely a seller will pay attention and take your offer seriously. We recommend that all or part of the earnest money become non refundable after due diligence. Some buyers are going as far as to make their earnest money non refundable after acceptance. This questionable strategy should be made with full awareness of the risks especially if the earnest money amount is significant.
If you are paying in cash there is no financing appraisal required. This is the primary reason that sellers love a cash offer: financing is not dependent on their home coming in at a certain price for closing to proceed.
It is important to note, however, that we are seeing financing appraisals keep up with home-value increases in Salt Lake. Most, if not all, required appraisals are coming at or above offer price. It is rare to see a contract dissolve due to unforeseen appraisal outcomes.
Many home buyers are choosing to waive their right to a home inspection to make their offer more amenable. We have our opinions on the risks that you should and shouldn’t take and advise our clients as such.
#3 Include an Escalation Clause
When composing an offer, the last thing you want to do is compete against and outbid yourself. An escalation clause sets the incremental price increase you are willing to exceed over the last highest bid. It also sets a cap for when the price exceeds your budget and you are no longer interested in purchasing the home.
#4 Don’t Expect Perfection: Prioritize Location and Community
In this low-inventory market it is very rare to find a property that checks all the boxes. We like to remind our clients that location and community are still the most important factors to consider when purchasing a home. You can change many elements of your home, but you can never change its location. Another top consideration is a home’s layout. Cosmetic and functionality updates can be addressed over time. Don’t expect perfection in this highly-competitive market.
#5 Take Your Time
Expect to spend 1-4 months touring and making multiple offers before securing a contract. Don’t get discouraged even after a few declined offers. Stay positive, keep looking and hone your offer strategies.
#6 Have a Competent Team Working for You
In this highly competitive market there is no room for mistakes. Your offer being accepted and home closing without a hitch is dependent on three important professionals, your: Realtor, lender, and title representatives. This trio will ensure your success and protection. At Niche Homes, we will connect you with our top associates in the lending and title industry. We offer representation that will protect you financially and advocate for your best interests. You can rely on our grit and relationships with industry players to help you secure your dream home. Our colleagues trust us and know they can take our clients’ offers seriously. Within a stack of 25 home offers, we stand out!
Contact us for a no-pressure conversation about buying a home in 2022 and how we can help you.