Buying A House

Buying A House

Pre-Qualification
The first step in buying a home is deciding how much you can afford. It is only
discouraging to find a house you love, and discover you can’t afford it. It is
relatively painless to get pre-approved. I have a lender that has a great track
record of helping buyers get themselves pre-approved and ready to buy a house. This
can seem like a bit of an annoyance, but it is very important in a competitive
market. It really doesn’t even make sense to start looking, until you are certain
what you can afford, and know what your monthly payment will be.

Find A House
With pre-approval in hand we are now ready to start house shopping. This is the fun
part of the process. Most decisions are price driven, that means that the most
important search criteria is your desired price. In our current market anything
between $190,000 up to $225,000 are not only difficult to find but usually sell with
multiple offers. This means your offer will not be the only one made on the house,
and you will be competing with other buyers.

Sellers Market
In a sellers market (inventory is low) it is hard to get a lower than asking price.
This is especially true with houses priced $200,000 or less. In many cases houses are
selling for more than the asking price with multiple offers. Multiple offers are
similar to an auction. Everyone interested in buying the house is asked to give their
“highest and best offer”. On a house priced at $195 for example it would not be
unusual for offers to exceed $200,000. One deciding factor for sellers is how the
house will be purchased. For example a cash offer will usually trump a financed
offer. It will close quicker and maybe without an appraisal. If there is a cash
offer in the multiple offers, many times this offer will be accepted even if it is
only a little higher than, or even right at the asking price.

Making an Offer
When you have found a house you like, the next step is to write an offer. Many agents
recommend that sellers list for a little more than what they believe the house may
sell for. This can create the allusion that a little discount is being given to the
buyer, since almost everyone likes a deal. Once the offer is written and signed by
the buyers it is immediately sent to the sellers agent. The sellers agent then
presents the offer to their sellers. Typical offers give sellers a 24 hour time to
accept, reject, or counter their offer. On weekends it is usually courteous to give
the sellers until Monday to respond.This is generally how things work and not
mandatory by any means. Some agents will write and submit an offer, and want an
answer back later the same day.

Three Choices
As mentioned above the sellers have three choices with every offer. 1.They can
accept, in which case the deal moves forward. 2. Sellers can reject the offer all
together. This means the offer is not very close to what they are asking or they
didn’t like the something else about the offer. 3. They can also counter the offer.
This is the most typical response to an offer that is not quite what the seller is
looking for. Offers and counter offers can go back and forth until buyer and seller
agree.

Home Inspection
Once an offer is “accepted” by the sellers you are “under contract”. The next step is
is a home inspection. There are many home inspectors available. I can recommend
one or you can find your own. It is a good to idea to find an inspector that is
experienced, and familiar with our market. It is important to look at the inspection
through the inspectors eyes. If he doesn’t disclose items he finds on the inspection
he is not taking care of his client “you the home buyer”. If he creates more urgency
than is necessary, it may cause the home buyer to walk away from a house that is
really OK to buy. Some home inspectors are more concerned with making sure they don’t
get sued than just completing a thorough home inspection. In my opinion the home
inspector should identify anything he finds and make a note if the issue is not of
major concern. One example would be cracked stucco, or concrete. Most contractors
will admit that there are only two types of concrete, cracked concrete, and concrete
that is going to crack. If there is a major gap in concrete or elevation on one side
over the other, there may be larger issues to investigate. It would seem logical for
the inspector to take a picture of cracked stucco and note that there is some
cracking in the stucco that is typical for a stucco house. If there is an issue he
should make sure the buyer understand the issues associated with large cracks.

Negotiate Repairs
Once the inspector has submitted the inspection to you the home buyer, you can share
it with your agent. Together you can look through it for any major concerns. In a
sellers market it is unlikely that a seller will pay for many repairs. When there are
other people waiting to buy the house it may not be a good idea to ask the seller to
pay to have the carpets cleaned, replace light bulbs, or other inexpensive items. On
the other hand if the inspection reveals mold, or soils issues, it is important to do
a little more investigation and cost evaluations. If there is a small amount of mold
around a window due to condensation, requests for a huge reduction will probably be
rejected. If there is a leaky faucet that has leaked under a cabinet, the mold my be
extensive, and a price reduction or request for remediation may be granted. In an
ideal world, if something like mold is discovered, and the deal doesn’t go through,
the sellers should include the mold discovery and remediation in the SPCD’s for the
next buyer to see.

Appraisal
Once the negotiation for repairs is complete the next step is the appraisal. Most
offers are written “subject to appraisal”. This means that if the house doesn’t
appraise for the agreed upon price the buyer can walk away with their earnest money
if they want. The buyer is paying for the appraisal, and it belongs to the buyer. It
can be shared with an agent or even the seller if it is desired. If a buyer would
like to move forward paying more than the house appraises for it may be possible, but
the details will need to be worked out with the lender.

It is more typical for the seller to reduce the price to meet the appraisal, since
this is the “true value” for the house. In a sellers market, this may not be the case
however.The seller may decide to admit that he or she is charging more than it will
appraise for and hope for a cash buyer or a conventional loan that isn’t totally
reliant on the appraisal. VA loans can allow a buyer to pay more than an appraised
value if buyer has enough down to cover the difference.

Title Company
The appraisal is the last major hurdle in most transactions. Once this is complete
there is a better than average chance that the sale will be finalized. With the
appraisal complete, the remaining work is the hands of the title company and the
lender. The title company is a 3rd party entity that assures that everything is
handled according to the REPC the (Real Estate Purchase Contract). The agents
negotiate the deal and the Title company makes sure that everything in the agreement
is fulfilled. They assure that funds are transferred from the buyer to the seller.

Utilities
This is usually a good time to start lining up your utilities. I can send you a list
of companies in our area. You can let them know when you plan on taking possession
so there will be a smooth transition and not re-connect fees. There are some
companies that will assist with this process if you would like. One is called All
connect www.allconnect.com 844 263 2443 the
other one is called Set Up My Move
www.setmymove.com 435 668 3503

Settlement, Closing, and Recording
Once the lender has everything they need, they give what is called “clear to
close”. This is accompanied with a CD or Closing Disclosure. This document explains
in detail where every penny in the transaction will go and who is paying what. This
is issued 3 days in advance of signing so the parties can be assured that everything
is what they understood it to be. Settlement is sometimes confused with Closing.
Settlement is when title obtains signatures from both buyer and seller. Closing is
the same as recording. This happens when the funds are in the sellers account and the
house is transferred into the buyers possession and the dead of trust recorded at the
county.This is the last step in a real estate transaction. Once this happens keys are
given to the buyers and the home is now officially the theirs

The typical time for settlement and recording can vary, but usually the day after
settlement, the funds are transferred, the transaction is recorded and the house
changes hands. There are some nuances to this. If documents need to be sent
out of state, they are usually overnighted delaying recording and possession by a day
or two. If this happens on a weekend or Holiday the delay can be longer than that.

It is a good idea to plan any installations cable, carpet, painters, etc. for a few
days after scheduled settlement date, as there is no guaranty that possession will
be given the day after settlement.

After The Sale
It is a good idea to re-key or install new knobs and lock sets on your house. There’s
really no way to assure that you have every key. Once you have closed on the sale
of your new house it is a good idea to get your drivers license switched to reflect
your new address. This is important to have done prior to going to the county tax
assessor. You will want to do this after your license is updated. The reason for this
is to make sure they show you as a primary home owner. This can reduce your tax
liability by 45%.

Home Inspection

Home Inspection

Home Inspections are a great way to discover potential problems with the purchase of a home. From the Buyers standpoint it can help them feel they are not buying a money pit with a bunch potential problems. Some Sellers order a home inspection prior to listing their home. This pre-listing home inspection will give the sellers a punch list of items that should be addressed. It is also a sign of good faith to the buyer that the seller is interested in selling a home functioning properly and in good repair.  This short video of a home inspection. This will give you an idea of what inspectors look for.

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Picky Home Inspectors

If you are buying a home the list of things identified by a home inspection can seem a little overwhelming. It is important to consider the fact that the inspectors job is to find “everything” that is wrong with the house.  To avoid liability the inspector needs to be thorough. There are usually two types of items identified. Items that really need to be fixed, and less important items that are not very expensive or difficult to fix. A good example of an item that will need to be fixed, would be a non functioning air conditioner. This has the potential to be very costly. An example of a less important item to fix would be caulking around a sink.

Things Wear Out

It is important to take into consideration the age of the home and typical wear and tear. When homes are listed for sale, the agent will use comparable homes of similar size and age. When a 20 year old home is being sold it is usually understood that many of the items in the home will be original to the house. It is typical for a home this age to have the original heating and a/c unit. These will be nearing the end of their expected life expectancy. This can create some anxiety for a home buyer when the home inspection indicates they are nearing the end of their expected usefulness. In reality, the other homes used for comparables usually have similar aged equipment. Basically the age of the a/c heating units are already figured into the price of the home. Another factor to consider is the fact that building codes are continually changing. What used to be OK may no longer be OK. One example of this would be Earthquake straps on water heaters. It is a good idea to have them, but they have not always been required.

Buyer VS Seller

When a Seller lists their home they usually struggle with the price they should list their home for. It is always difficult for a home seller to welcome a price reduction, or a request to fix items on their home. Not only is in somewhat of an insult to see a list of things wrong with their home, but the buyers request will cost them money. The Buyer is interested in getting the best home they can, for the least expensive price possible. With both sides basically opposed to what the other side wants it can sometimes be difficult for both parties to come to terms. I usually recommend that a price reduction is used rather than the seller fixing the items needing repair. This assures that the buyer can oversee the repairs to make sure they are up to their standards.

Warranty

I have found that the home warranty can bridge the gap between buyers and sellers and help both sides to get together. If the air conditioner is older and described as nearing its life expectancy, a home warranty can offer some comfort to the buyer. The last thing a home seller wants is to receive a call from the person that bought them home charging them with knowledge that they knew that water heater was ready to go out. If a water heater goes out the day after the home changes hands the buyers would definitely be suspicious. If there is a home warranty in place, the water heater will be covered. In this respect the home seller benefits from a warranty being in place also.

Utah Local Tax Rates

Utah Local Tax Rates

Being number 1 is not always a good thing. In this Graph Utah is listed at number 12 in the nation. In 2015 the same graph indicated that Utah was number 41. This represents a significant increase in taxes being charged.

This Graph is from the Tax Foundation. It is interesting to see how states tack up agains each other. Often times in Utah we are compared to Nevada. Some people believe that because Nevada has legalized gambling that their taxes are lower there than in Utah. According to this graph that is not true. The overall tax rate in Nevada is significantly higher, and the 13th highest in the country. Tennessee is ranked the highest in the country with 9.46%. The small print below the graph explains in more detail how the creators of the graph have tried to make things equal. As with anything the graph is left to interpretation.

St George Health Care

St George Health Care is among the finest in the country. In a Consumer Reports article St George area Dixie Regional Medical Center is ranked #7 in the country. This recognition is well deserved. Every time I have had anything to do with Dixie Regional Medical Center they have done a great job. Recently both of my parents passed away, one in Dixie Regional, and one in follow up rehab following a visit there. They were treated with professionalism and sincere concern. Nat’l Hospital Ratings The attached link also shows there are a few other hospitals in Utah ranked nationally.

We are lucky to not only live in such a beautiful place, but to have so many great resources available to us. We live in an area that people travel from across the world to see. Our National Parks are truly breath taking and known throughout the world.

The Real Estate market in Southern Utah continues to be active right now. Our inventory is still a little low, creating a sellers market. Several of the homes I have listed recently have sold in less than 2 weeks. If you have thought of selling your home, give me a call. I will help you decide if it is a good idea to make a move now or wait.

Interest rates are still at their lowest point in years. If you think you might want to move, but are waiting for some reason, you might want to think more seriously about moving. Lower interest rates mean lower payments which means you can get more house for the same payment as a more expensive house when rates go back up. Call now for a free home evaluation.

 

ERA Home Fusion

ERA Home Fusion is a new way to list a home. The program is very helpful for people trying to sell their home. ERA Home Fusion utilizes all of the latest technology and information to maximize the listing. I believe that the Home Fusion Program sets ERA apart from our competition. This short video on You Tube is a fun explanation of how ERA’s Home Fusion Works. It is no surprise the number of people that begin their home search online. By using this important piece of information we have built an entire platform around modern technology. Another important piece of ERA’s Home Fusion is professional photography. Since most people begin their search online, it only makes sense that they see your home in the best possibly light.

ERA Home Fusion

Another important component of the Home Fusion program are what we refer to as “Smart Signs”. Smart signs are placed in front of every listing that ERA has. Part of the sign includes a number for people to text while they are sitting in front of the house. This allows me to set up a time to show the house, and follow up with any potential buyers.

Cottam Cove

Cottam Cove is a new subdivision in the St George Real Estate market. It is located on River Road across from Mr.D’s market, homes are priced from $269,000. They feature what is called the modern prairie design inspired by Frank Lloyd Wright. The entire neighborhood is designed with straight lines and sharp corners. From the landscaping down to the interior walls everything features a clean crisp look. Many items that are considered extras from other builders are included in our homes making Cottam Cove a great choice. Here are some of the standard items that may be considered an upgrade at other builders.

INTERIOR:

• Vaulted master bedroom or family room (per plan)

• “Holy Smooth” textured walls w/ rounded corners

• One-tone paint with one accent feature wall

• Multiple choices for interior door style

• Custom wood window sills

• Designer half wall at stair locations

• Tile flooring for entry, kitchen, baths

and laundry

• Nickle finish lighting package & hardware

• Chrome Moen Chateau double handle bath

plumbing fixtures

• Chrome Moen Integra kitchen sink faucet

• Decora light switches

• Space saver MDF closet shelving

• Designer laminate countertops for baths, kitchen

• Pedestal Sink in half bath (per plan)

• Sterling Ensemble bath/shower surround for main

(32”) & master bath (42” per plan)

• Washer/dryer utility pan with drain (community specific)

• Designer cabinets including hardware,

full depth shelves, 42“ upper cabinets,

natural maple melamine interiors

• Appliance package:

electric smooth top range, dishwasher, and

under-cabinet hood (black or white)

When it comes to Standard Features, Wright Homes knows that there is not a one size fits all,

so you are welcome to personalize your home in our design center.

Design your home WRIGHT!

*Wright Homes reserves the right to modify or change the floor plans, home specifications, designs, features, options, prices or terms without notice.

ENERGY EFFICIENCY:

• 90% efficiency furnace (sized per home)

• Energy-conserving R-15 “Blown in Blanket”

wall insulation, R-38 blown in ceiling insulation

• Energy-efficient windows with low E glass

• Central Air (13 Seer)

• 50 gallon energy efficient natural gas water heater

SMART OPTIONS:

• Two dual packs (internet & cable)

• Smoke and carbon-monoxide detectors

• 2” conduit from basement to attic for future wiring

(only in two story homes)

• Satellite pre-wire to the attic

EXTERIOR:

• Therma-Tru fiberglass front & exterior doors with

dead bolt locks

• Exterior finish package includes stucco, fiber

cement board, and brick (see agent for details)

• 30-year architectural asphalt shingles

• Seamless full rain gutters

• Two exterior weather proof electrical outlets

• Two exterior “freeze-free” hose bibs

• Two-car garage with exterior lighting

• Garage door w/ opener and remote controls

• Concrete patio (size per plan)

• Hardi Elevation Accents

• Front landscape

• Granite Kitchen and bath countertops

• 9’ ceiling per plan

• Bronze or nickel finishes

• MB sep/tub shower tile tub splash

• LVP flooring for entry, kitchen bath

and laundry

• Upgraded appliances with micro-hood

• 42” cabinet uppers in the kitchen

Before you decide on a lower priced home, make sure you will not be paying for the items mentioned above that are included with our St George Real Estate area Cottam Cove homes. Another great incentive is the 1% contribution toward closing costs by using our preferred lender. We are open Monday through Saturday from 11:00 to 5:00 p.m. Come by and take a look. We currently have two completed spec homes that we would love to make a deal on. If you are in the market for a new home, or just curious what is going on, drop in.

Parade of Homes

One of my favorite times of the year in St George is February and the parade of homes. I am not a big fan of winter, cold, or dreary days. I have always considered February the beginning of Spring in Southern Utah. I believe that is what makes the St George Real Estate Market attractive to so many people. I know it is not the official start of Spring, but in my mind, it is close enough. When the inversion is bad in northern Utah, it seems like we have a larger pool of interested buyers this time of year.

It is exciting to watch the contractors hurrying to put the final touches on their new creations. This year marks the 25th anniversary of the parade. Ticket prices are $15.00 and tickets can be purchased online, or at Lin’s Grocery, and the Red Cliffs mall. The price might seem a little steep, but if you consider how many hours of entertainment you get, prices are not that bad.

When I work with buyers from out of town, many have never heard of the Parade of Homes. Once I explain the concept to them they really like the idea. I know that the parade is not unique to the St George Real Estate market, as there is also a Parade of Homes for the Wasatch Front. I am not sure if other states have similar events or not? If you have never participated in the parade give me a call and I will guide you through the process.

St George Real Estate Market for Seniors

I have been fortunate to help people considered “seniors” to buy and sell houses. Recently I received an article from a local title company. It was actually provided for them by a company called Real Estate Digest. They provide canned newsletters for people in the real estate industry. I found one article rather interesting, it is entitled “Housing not Health Care Is Biggest Cost For Seniors”.  In this article they point out that seniors are paying about 45% of their monthly budget for housing. This is a national statistic, but I would assume it is fairly accurate in the St George Real Estate Market as well. With all of the hoopla of the “Affordable Health Care Act” and the focus on Seniors having health care. The stats show that Sr’s are spending  between 9-18% of their budget on health care. Less than half of their housing costs.

Get Your Home Paid For

Growing up I was always encouraged to buy a house and get it paid for. I have always thought of that as a great idea, and that is still a worthy goal. Some investment and retirement experts may think otherwise, but it would seem to me that having a home paid for is worth more than the money invested in another way. While the return on the money tied up in a house may not be as great as another investment, having the piece of mind that your home is paid for is hard to put a percentage on. Of course this would not apply to everyone, and I am sure there is a good argument to be made for keeping a house payment for tax benefits etc. etc. With the volatility of the Stock Market, uncertain economic conditions around the world, and our national debt nearing 20 trillion, it just seems to make sense to have housing secured.

Senior House Hunting In St George

There are several options for seniors to consider when it comes to house shopping in the St George Real Estate Market. Some Sr’s are referred to as Snow Birds, because they flee the snow in other parts of the country to live here in our sunshine during the Winter time. For these folks living here part time a Modular Home or Park Model may be just the ticket. Prices for this type of home begin about $50,000 and go up from there. More affluent Sr’s may be interested in a condo or even a traditional home. Second homes are taxed at a higher rate than first homes so it is important to consult with a tax professional prior to deciding which way to go. For Sr’s wanting to finance a second home, lenders usually charge a little more for a downpayment also. Another factor to consider when researching a second home in the Southern Utah Real Estate Market are the HOA’s charged, on some homes. HOA’s can range in price from $50 a month up to as much as $400 per month with some even higher than that. These fees sometimes include desirable amenities like swimming pools tennis courts etc. One feature important to most Sr’s is yard care. This is important especially if the second home will not have anyone there to care for the yard. Homes with grass and shrubs in our desert environment can deteriorate in a hurry when it is 105 degrees.

Buy A House With No Money Down

Unlike some of the late night infomercials, it really is possible to purchase a home with little or no money down in the St George Real Estate Market. If you are open to a home in the Hurricane, or Ivins, and most surrounding smaller towns, it is possible to get in with no money down. There is a Federal Loan product available in the Southern Utah real estate market known as USDA or RDA. This helps people that have not been able to save up for a down payment. The loan has been around for quite a while but many people are not familiar with it. It was designed to help build smaller more rural areas by offering incentives for people to live there.

What About Closing Costs?

If a person is able to qualify for a rural house loan in the Southern Utah housing market, they will still have to pay about 2.75% closing costs. Most people who don’t have a down payment saved will more than likely not have money for closing costs. While 2.75% sounds insignificant, on a home price of $180,000 that translates to almost $5,000. In our St George area real estate market it is not unusual for the person buying a home to ask the seller to pay for closing costs. This means that the buyer’s closing costs are paid for by the seller and the downpayment is paid for by the Federal USDA program. This is a savings of over $10,000, making home ownership available to a lot of people that may not even know they could qualify.

Other Expenses

There are some other expenses associated with purchasing a home in our Southern Utah real estate market. One expense that is over looked is the appraisal fee which is usually about $500. Our preferred lender First Colony Mortgage will pay for the appraisal when someone uses them for their USDA loan. This also reduces the out of pocket money that is usually due at closing paid by the new home buyer. Another expense that is often overlooked by people buying real estate in the St George area is the home inspection. Home inspections are a great way to avoid jumping into a mistake, or buying a home that may have problems. If there are minor issues found in the home inspection, the home seller will usually pay to have them fixed. In a lot of instances, the items needing repair will offset the cost of the inspection

Home Warranty

Another component of a home sale that is sometimes overlooked is the home warranty. A home warranty is usually about $500. A home warranty should be part of every transaction in our St George Real Estate market. The warranty can prevent the home seller from fielding calls from the home buyer about issues they may have known about and not disclosed. It also safeguards the home buyer from replacing something that stops working as soon as they move in. In conclusion, a home warranty can be requested with the request for home seller to pay closing costs. This piece of the puzzle paid for by the home seller, reduces any money due from the home buyer. In some cases this could make home ownership as inexpensive as renting a home. Call today let’s get started.

St George Area Homes Under $200,000

St George Area Homes Under $200,000If you are looking for homes priced under $200,000 in the St. George area. I can send you a list. There are still some nice homes available and priced under $200,000.