Salt Lake City Real Estate Podcast with Joshua Stern

Our housing market is currently healthier than the majority of our nation.   According to the Realtor’s Confidence Index, which gathers monthly information about real estate transactions to provide on-the-ground information, there are several indicators that point to a turnaround of the housing market.   First, the buyer traffic index has improved to 50 after having dipped to a low of 30 in April.  Foot traffic has a strong correlation with future contracts and home sales, so it can be viewed as a peek ahead at sales trends two-three months in the future. Overall home showings in May were down 20% compared to May of 2019. So far for June, we are actually up 6.6% over the same time last year.  And, overall, we are 39% above the pre-pandemic peak. This is a good sign for the future health of Utah’s real estate market.  Interestingly a higher fraction of sales closed just based on virtual tours or virtual showings with 9% of sales closed based on virtually showing homes, this is based on buyer agent feedback.   The COVID-19 has changed the way buyers purchase, it has also changed the way sellers sell.  Having a high-end virtual tour and virtual showings have become very important to the selling and buying process and this may be a trend that doesn’t fade away anytime soon.  Also, based upon data released by the National Association of Realtors, home prices are expected to rise in Utah by 2-3% in 2020.  That’s incredible given the ongoing Pandemic and most certainly is a testament to the health of Utah’s economy.   While we are still uncertain how COVID-19 will continue to change the landscape of housing and the economy beyond a 3-month threshold (previously this is determined by foot traffic), our housing market is currently healthier than the majority of our nation.  Also, Utah ranked #6 in mobility last year with 1 in 6 residents changing their location.  About 400,000 Utahns changed homes within the state and another 100,000 immigrated from other states. As you can imagine, most of our in-migration comes from California.  However, Idaho, Washington State, Texas and Oregon rank up there in terms of out of staters moving to Utah.  Employment is a huge driver for migration, so let’s hope that Utah continues to hold low levels of unemployment through the COVID-19 pandemic.   So in a nutshell, showings are up, the amount of properties a buyer looks at before purchasing a home is down, more buyers are buying their homes based upon virtual showings or virtual tours in general.  Listing volume is down, as uncertainty has led many sellers to wait until “the dust settles”, accompanied by a strong local economy has caused price pressure on homes priced under $350,000 with more than 80% of properly priced homes in that price range receiving multiple offers.  Finally, because of these factors, we’re actually likely to see an increase in average price by 2-3% even during a recession.  We shall see, again, we can only predict out 2-3 months at a time.  I’ll continue to keep you posted on this blog, but please don’t hesitate to call or email me directly with any questions you may have about the market or to discuss your personal real estate goals.

Thinking of selling your home? It can be overwhelming during good times, not to mention the uncertain times we’ve experienced lately. It’s surprising how our housing market has reacted to COVID-19 over the last couple months.  Join us on June 10th at 6:00 pm. This is a “virtual” webinar you can attend from your phone, computer or tablet. We want to share what we’re doing to help sell our homes in these current conditions. We will be awarding one attendee a Detailed Home Cleaning package from our trusted cleaning company (who doesn’t love a clean house?)   Below is a short overview of the material we’ll cover together.  • Current Utah Housing Market Statistics and Data • Is COVID-19 affecting your home’s value? • Are we heading toward a housing crisis like we did during the Great Recession • Can I sell my home virtually or safely with minimal contact and still get top dollar? • What if I can’t pay my mortgage? • Is now a good time to sell? • The right strategy for pricing your home to sell? • How to stage, market, and sell your home, FAST! • There are many new home selling options that are available from cash offers, to instant offers, virtual brokers, limited service and fee for service limited brokers.  Learn more about what option is right for you.  Learn how virtual technology is being deployed to keep sellers safe. Photography, digital signing, virtual grand openings, video consultations are all here to help sellers. Learn about the process of selling, staging tips, market advice, and many other tips and tricks! In this class we will go over everything you will need to know about selling your property! COVID 19 has changed…everything. So we’re going to take the time to educate the public on the do’s and don’ts of selling your home on the teleconference webinar.  Once you’ve registered, you’ll receive the link. 

The National Association of Realtors has released their annual report of Home Buyers and Home Sellers.  There’s some interesting information here that we felt was pertinent and worthy of sharing. We’ll cover this in two parts.  First will be the Home Buyers. • So The first thing I noticed here was that 78% of non-home owners believe that homeownership is a good financial decision.  Not only do I agree, but we can back this up with substantial data.  You can google “Homeowners vs Renters net worth” or you can take my research at face value.  Homeowner’s net worth is 45 times greater than renters.  That’s a big number.  Simply put, homeownership is a form of “forced savings” Every time you pay your mortgage, you’re contributing to your net with.  Every time you pay your rent, you’re contributing to your landlords net worth.  • 33% of home buyers in 2019 were first-time buyers.  Their typical age was 47.  So, seems crazy that back when I started selling real estate 2 decades ago, the average age of a first time home buyer was 27.  It’s moved back 20 years…I think, in part, buyers are susceptible to carrying more debt nowadays.  More debt from credit cards, vehicles, student loans, etc…I’d say we could take some lessons from our predecessors in putting off some of the “I want it now” by asking ourselves, “do I need it now”?  I also think it’s important based upon the first NAR statistic that we focus on getting a home sooner rather than later.  Fix your monthly payment, while rent goes up, mortgages do not.   • 52% of home buyers hired an agent primarily to help them with find the right home. • 89% of buyers who purchased a home used a real estate agent or broker, an estimated 6% bought from a friend or relative.  I’m not surprised, in this challenging market it pays to have a real estate professional guide you through the home buying process.  A full time real estate professional not only helps you find homes that match your specific needs quickly, they are experts in navigating the negotiation process and guiding the transaction from contract to close. They also have access to professional vendors that can assist with things like mortgages, insurance, repairs, flooring, paint, you get the point.  • 90% of buyers would use their agent again or recommend their agent to others.  We thank you for that, as referrals have always been the lifeblood of our business.  • Buyers typically searched for 10 weeks and looked at a median of 9 homes before they purchased a home.  We’ve been pretty fortunate on The Stern Team, as our systems are so specific and since we have buyer’s only agents, our average buyer looked at 5 homes before they found their perfect home. • Finally, 75% of Non-owners believe homeownership is part of their “American Dream.” They’re right. I’ve been saying it for decades.  Every day I wake up excited to be in the American dream business.  Nothing more gratifying than delivering keys to a first time home buyer, attending their house warming parties and watching them turn a house into a home. 

The National Association of Realtors has released their annual report of Home Buyers and Home Sellers.  This is our second segment, if you missed the Home Buyer report, please visit www.SternTeam.org, there’s a lot of valuable insight.  Today we’re going to cover the NAR’s 2019 profile of home sellers. • Remember that the typical home buyer was 47 years old?  2 decades older than when I first started my real estate career.  Well the typical home seller was 57 years old? Now I’m starting to get a clearer picture of why our inventory levels have been so low.  When I first started selling real estate a homeowner would live on average between 3-5 years in their home and then move.  I think the Great Recession of 2008-2011 really changed the dynamics of real estate.  People are living in their homes much longer, about 10 years on average according to the NAR.  Obviously this is a national number, as you’ll find in metropolitan areas along the Wasatch Front they move more often.  But still, this means we’ve had much less inventory over the past decade for buyers to choose from.  That fact coupled with sellers holding off to sell their homes because of COVID 19 has really put a damper on the availability of homes for sale.  It actually means that if you need to sell, do it now.  You’re in the driver’s seat! • Just like buyers, 89% of sellers worked with a real estate agent or broker to sell their home.  About 6% sold to someone they already know.  That’s smart as it may seem easy to sell a home, but in reality there are over 180 tasks to navigate to get a home successfully sold.  To avoid the headache, contact a real estate professional! • For recently sold homes, the final sales price was a median of 99% of the final listing price.  This doesn’t necessarily track price adjustments made on listings that were over priced for the market.  This is just the median list to sale price of the FINAL list price of a home.  • 75% of sellers contacted only one agent for the job of selling their home.  66% found that agent through a referral from a friend, neighbor, coworker or relative.  This is also true for our business.  The majority of our business comes through referrals, which we appreciate.  Referrals are the lifeblood of our business through the past 2 decades.  • 44% of all sellers traded up into a larger home • The median equity cashed out during the sale for future investment into another home was $60,000.  That’s a lot of bucks!  We talked about the networth of a homeowner being 45 times that of a renter, and here is just one example of that fact.  • The distance between a home sold and a new home purchase was 20 miles.  People usually move to improve school districts, house size, garage size and yard.  • The average home owner lived in the home they sold for 10 years.  Well that’s a lot of numbers to digest, and that’s officially a wrap.  In real estate it pays to hire a professional who knows their market.  It’s great to have a look at national numbers, but a true real estate professional is a local economist.  They’ll know the local trends to help you capitalize on the sale price and speed of sale for your home.   

Today we want to introduce to you The Stern Team’s Love it or Leave program, the ultimate buyer protection plan for uncertain times.   Buying a home is a big decision, and one that you literally have to live with.  We strive to find you the perfect home, a home that you will love for years to come.  Our experience and our consumer oriented programs provide you with numerous unique systems that allow us to quickly zero in on exactly what you’re looking for and help you beat out the other buyers to the best new listings.   • What if you get transferred just after you’ve bought the home? • What if you receive a fantastic but unexpected job offer which requires you to move? • What if you decide that the home or neighborhood just isn’t what you wanted? • What if you win the lottery and want a bigger home? We want you to be able to buy a home with confidence, so we’re going to remove the risk.   Simply put, if you don’t absolutely love your home within the first 12 months, we will sell it for free on our side and help you find a new home. When you work with one of our specially trained buyer’s only specialists and the home you buy turns out to be less than perfect during the first year of ownership, or you hit the lottery, we will sell it for free.  We won’t charge you a listing commission while you’re looking for your replacement home with The Stern Team.    Yup, it’s that easy.  So give us a call or shoot us an email and put us to work.  We’ve helped over 2,500 families with the American Dream and I’m confident we can bring the gift of homeownership to you and help you get started down the road to financial independence. 

Today we want to talk about the mortgage market and how COVID is changing the mortgage landscape   Today we want to talk about the mortgage market and how COVID is changing the mortgage landscape. JPMorgan Chase just announced that it has stopped accepted HELOC applications as of April 14th, 2020. Of course, they’re calling this a temporary pause. In addition to that, JPMorgan Chase is requiring 20% down payment and a 700 FICO on most of its loans.   But, not all lenders are doing this.  This is just an example of an institutional reaction to fears that homeowners will stop paying their mortgages.  “This is just an example of an institutional reaction to fears that homeowners will stop paying their mortgages.” This is in large part because the government has created some confusion behind their mortgage-backed securities with Fannie, Freddie, and FHA  requiring a 12-month moratorium on mortgage payments if the borrowers suffer a COVID-19 related hardship.  United Wholesale Mortgage, the second-biggest mortgage lender in the country, recently announced that it will require re-verification of a borrower’s employment on the day their loan is scheduled to close. The purpose is to ensure that borrowers are actually still employed when their mortgage closes. Most lenders have made this move. It’s the fear that a buyer’s job at the beginning of the process of purchasing a home may be in jeopardy and they now require the Verification of Employment (VOE) the day prior to settlement.  Obviously, lenders want to make sure that borrowers have cash flow.  The bottom line of all these changes is lenders are attempting to protect themselves and borrowers from getting into a mortgage that is not in their best interest. While United Wholesale and JPMorgan Chase are some of the biggest names to make these changes as a reaction to the market, they’re likely not the last.   In 2008, I remember how loan programs were disappearing on nearly a daily basis. In large part, that was a good thing. The meltdown was in fact spurred by corporate greed and borrowing money to anyone who could fog a mirror and hiding them in large wholesale bundles sold on secondary markets. I suspect that these changes will last beyond the local and national re-opening of our economy.  Only time will tell.  In the meantime, our lender still has access to mortgages with as low as 3% down payment and interest rates at historic lows.  Making this a great time to take advantage of buying opportunities as they relate to the cost of homeownership. Give us a call and we’ll put you directly in touch with our preferred lenders to get the ball rolling.

Since Governor Herbert declared a State of Emergency for Utah in early March: • 4,195 homes became active.  • 5,294have moved into under contract statuses.  • 5,601 have sold.   Active listings are down 22.5% year-over-year.   • 8,370 beginning January 1st, 2019.   • 6,493 beginning January 1st, 2020. Under contract listings are actually up about 12% over this time period last year.  Buyers are more willing to buy now as they are taking advantage of 60-year lows on interest rates. If there were more inventory, we’d have more sales.  For perspective, the average interest rate for the last 44 years is about 8.3%, we’re currently in the low to mid 3% range. Let’s call that a 5% variance from the average. Every percentage point the interest rate goes up on a 30-year mortgage, the cost of owning your home goes up by 10%. So we’re 50% lower on home costs than average.   Why the lack of listings?  Most sellers are waiting for the dust to settle. While this is a prime opportunity for sellers to maximize their sales price, most sellers are unsure of what the market is doing. Based on our conversations with sellers, many assume the market is dropping. In fact, prices have not given up any ground. Others are concerned about the safety of selling their home during COVID times.   The Stern Team has a modified Safe Seller Program that helps to alleviate those concerns.   • We’re doing 24-hour virtual open houses.  • Any in-home visits require gloves, booties, and hand sanitizer for each and every showing.  • Additionally, we have the sellers leave all the lights on and all the doors open to ensure fewer surfaces are touched.  Only one group of buyers in the home at one time.

We hope you and your loved ones continue to stay safe and healthy.  COVID-19 continues to be the topic of conversation and the dominating force in our lives.  With all the volatility in the stock market and uncertainty about the length of time this may last, a lot of folks are rightfully concerned about another market crash like we had in 2008-2011, otherwise known as the Great Recession. Ali Wold, Director of Economic Research for the real estate consulting firm Meyers Research, addressed this point in a recent interview: There are quite a few reasons indicating this real estate market is nothing like 2008.  Here are 5 dramatic differences: 1. In the last 30 days, more homes have offers accepted on them than are coming available for purchase in our UT market and most major metropolitan areas.  2. Mortgage standards are nothing like they were back then.  Have you seen the movie “The Big Short”?  Well, you can’t fog a mirror and get a loan anymore.  Standards for underwriting are tough.  Getting a loan isn’t hard to do, but you actually have to qualify for that loan.  No more stated income loans, or the proverbial 80/20 combo loans.  3. We don’t have a surplus of homes on the market. As mentioned we have a surplus of buyers. We actually have a shortage of homes available. 3983 new homes came on the market 4708 homes went into under contract status 4711 closed 4. Houses became too expensive in the lead up to the Great Recession.  Affordability was a real issue, though didn’t factor into getting a loan.  The affordability index, which is the percentage of an average person’s income it takes to buy an averaged priced home is FAR lower than it was from 2005-2007.  The major player in affordability has been historically low-interest rates. 5. People are equity rich, not tapped out.  From 2005-2008 people were using their homes like piggy banks and banks were more than happy to give out nearly free home equity loans for more than their homes real value.  The result of this was people using equity from their homes to finance their lives wants, weddings, vacations, cards, credit card consolidation, etc…That put their homes are a risk in the event they were unable to afford them as they had no equity to sell.  Well, banking institutions have put a lot of restrictions in place to prevent people from over-encumbering their homes.   We will continue to keep the real estate industry operating during these trying times.  Please don’t hesitate to call us and ask us about our safe seller and virtual buyer programs our clients are utilizing to stay safe during these uncertain times.

Join us on April 29th at 4:00 pm on Zoom where we will share the process and walk you through the virtual steps of buying a home!   We realize that it’s a different sort of time, but the real estate market continues to be going strong! Serious buyers are out there and taking advantage of this opportunity to find their perfect home! We always strive to offer only the best in client experiences so we designed a program that has made this process safe and easy for our buyers. We’ve had a ton of people reaching out and wanting more information so we thought this would be helpful to share! Join us on April 29th at 4:00 pm on Zoom where we will share the process and walk you through the virtual steps of buying a home! Register at the address here - https://bit.ly/VirtualHomeBuyerZoom - Seating is limited so make sure you sign up soon to ensure you have a spot! We also want to take this opportunity to give back to the community which means that one lucky participant will win a $100 gift certificate to a local business of choice! We look forward to seeing you there! Make sure you bring your questions as we’ll have a Q&A session at the end!

Today we’re going to talk about the back doorway we can help our housing market    Today we’re going to talk about the back doorway we can help our housing market.  That’s by helping our local economy which in turn keeps our housing market healthy.   With the recent COVID-19 pandemic, Salt Lake County and our neighboring counties Health Departments are prohibiting restaurants, bars, and taverns from serving their patrons in a traditional manner. This is having a major impact on the local economy, job security & livelihoods of the employees and owners of our favorite restaurants and taverns. While you may not use your gift cards today or next week, you can support local businesses by purchasing them now for future use. This puts money in their pocket today to keep their business and therefore our local economy running. We have such a fantastic community along the Wasatch Front. When Palmer Krehel found out that restaurants, taverns, and bars were shuttering, he wanted to find a way to help his local businesses and their workforce as they struggle for customers who are “hunkering down” because of COVID-19.  Many, like RoHa Brewing Project in Salt Lake City, have switched to curbside pick up or take out orders. Though businesses like RoHa Brewing have a White Glove, latex that is, VIP service to give non-traditional options to their customers to pick up goods to go, many are still skittish. So Palmer quickly created a website and took action aggregating links to pages from local businesses where you can buy gift cards.   That website is SLCgiftcards.com.  I encourage all of you to consider visiting the site and finding your favorite local restaurant and pre-purchasing your future visit, today.  If you take advantage of the pick-up services please also consider leaving a tip, as most of the food and beverage service employees have a reduced hourly wage that factors tips into their income. I want to personally thank Palmer and our incredibly charitable Wasatch Front community for helping during this unique time.  It is people like you that help to make our community strong and one of the reasons I love living here.

One of the ways I’m getting through this crazy time is first, keeping a schedule and second making sure that schedule includes an exercise routine.  I’ve been working out with my trainer Steve Pizza the owner of SLC Strength and Conditioning for a number of years. I asked him what he could do to put together some great at-home workouts you wouldn’t need equipment for.  You guys, he crushed it! Here’s what he’s come up with.  All workouts are designed with an overarching program in mind. Meaning, workouts are specifically programmed with intent and are progressive throughout the month (i.e. each workout builds off of the other.  The program, itself, is formatted similarly to what you’d see at the collegiate and professional athletic level (modified for body weight or limited equipment).  All workouts have full-body emphasis to correct any muscular imbalances and prevent any from occurring. Each workout incorporates 12+ different exercises, providing variety and balance, mitigating short term and long term risk for injury. Scientifically backed with the incorporation of several different training systems including Tier, Triphasic, Undulating, and Auto-regulation. Check out the site here. There’s a good intro video to let you know some of the science and how the 60-day program works.  https://slcstrengthandconditioning.com/remote-programming/ I’ve gone through it personally and it is EXCELLENT.  All video details of demonstrations of each exercise as well as modifications of each exercise.   Steve has given our clients a 20% discount to extend to you all to get you going for super cheap.  Regular Cost: $60/Month (includes access to remote program, instructional videos, and guided circuit, and access to coach communications for any questions or specific modifications needed Registration After you’ve registered: Check email for password information (may have gone to junk mail) After you’ve received password:  Click here and scroll to the bottom of the page.  Click on Week 1 and enter password Enjoy! 20% Discount Code: SLCTAKE20! I’m confident if you keep a good routine while you’re at home, and include a science-based exercise program, you’ll get through these trying times with less anxiety and be able to be even better as a spouse or parent. 

Have you thought about buying a new construction home? If so, there are five points you need to be aware of:  New construction homes aren’t always listed on the MLS. Quite often, home builders have agents working as on-site salespeople in order to increase their control of the transaction while reducing total costs. New construction homes are often sold before they’re built. Builders will generally line up financing and the construction and sales process before a property is even built. The first buyers within a subdivision may get the greatest discounts. However, As the saying goes, “the early bird gets the worm.” Acting quickly when a new subdivision is being built could lead to financial rewards. These rewards also come with the risk of being committed to a process before much is known about how it will play out. Builders put a lot of emphasis on numbers. Since a builder isn’t a traditional seller, they don’t have an emotional attachment to the home(s) they’re selling, and will therefore be more focused on making sure you’re qualified and ready to purchase than anything else. Discounts may be available in the form of upgrades. If the property is close to the end of the sales cycle, builders may be willing to offer you an upgrade package that would reduce the overall cost of purchasing the home. If you have any other questions or would like more information, feel free to give us a call or send us an email. We look forward to hearing from you soon.    

Here are the numbers from the Wasatch Front in 2019: - Single-family home sales: 38,024 - Condo and townhome sales: 10,305  - Average home price: $376,000 (a 7% year-over-year increase) - Average days on market: 51 (a 16% year-over-year increase) - Absorption rate: 4 months (a 20% year-over-year increase)   The law of supply and demand, which drives all economies, says that if the supply is down and the demand is up, then prices go up. We’ve had a pretty good ride in terms of home price increases across the Wasatch Front over the last six years. “If political volatility continues throughout the new year, we expect interest rates to remain low.” In real estate, a level market is when you have between four and six months’ worth of available homes at any given time. If the supply drops below that point, it creates a seller’s market with upward pressure on pricing. If supply rises above that point, the market becomes a buyer’s market. Our market has four months of inventory, which is being driven by an increased supply of homes and lowering affordability. While home appreciation is a good thing, over time, it can put limits on what buyers can purchase, especially first-time homebuyers. We ended 2019 with some political volatility, which has continued to impact both the bond and stock markets; the big items impacting the market are our trade agreements with China and our relationship with Iran and the Middle East. If this volatility continues throughout the new year, we expect interest rates to remain low, and if it’s resolved, rates will likely rise as they react to inflation. As always, if you have any questions about real estate or the market, don’t hesitate to reach out to us. We’re here to help you.

Selling a home can be a complicated process. As such, there are a few things that many home sellers simply forget about as they prepare their home for sale. Here are six things to keep in mind when selling your home: Focus on staging. You may already like the way your furniture is arranged, but does it appeal to buyers? Your home should be set up in a way that shows off your living areas and opens up the space. Improve your curb appeal. The outside may just be as important as what’s inside. Your home’s exterior is the first thing buyers see, so make sure it is maintained well and looks inviting. Show off your smart-home tech. If your home has smart locks, thermostats, carbon monoxide detectors, or any other smart-home technologies, make sure buyers are aware of them. Many people consider them necessary home fixtures in today’s digital age. “Your home should be set up in a way that shows off your living areas and opens up the space.” Tackle home odors. Unpleasant smells can be a dealbreaker for buyers. Make sure your home is free of any uninviting aromas. Update lighting hardware and fixtures. Buyers love brightly lit rooms, so make sure your bulbs are all working. If your fixtures are outdated, consider replacing them for a more modern feel. Minimize decor. The goal is to depersonalize your home so buyers can see themselves living in it. Though vibrantly colored walls may be your style, not everyone has the same tastes as you. It’s better to stick with neutral colors such as gray, white, and taupe. If you have any questions or would like more information, feel free to reach out to me. I look forward to hearing from you soon.    

When it comes to decluttering, Marie Kondo is all the rage right now. She’s the Japanese lifestyle celebrity who has the miraculous ability to help people declutter their homes for good. What’s her trick? Only keep the things that spark joy or keep you happy.  Here are three tips based on that principle that you should follow when decluttering: First, collect all of the same things around the house (e.g. all the books), touch each object once, and ask yourself whether it sparks joy. If it doesn’t, it needs to go.  “At the end of the day, you’ll find that you only keep things that make you happy.” Next, remember to follow the right order when tidying up. Start with clothing, move on to books, papers, and other miscellaneous items, and then focus on mementos. By the time you get to mementos, you’ll understand the method. Don’t keep things because you think they might come in handy. The likelihood that they will come in handy is low, and you can always buy a newer version of an item that does spark joy in the off-chance that you’ll need it.  Lastly, get rid of the clutter before buying storage containers or other oversized products to organize your space. Take it slow and don’t stress over the process too much. You want to make sure you do it right and on your own time. At the end of the day, you’ll find that you only keep things that make you happy. As always, if you have any questions about this or any other real estate topic, don’t hesitate to reach out to me. I’d be happy to help you.      

If you’re hoping to buy a home, it’s smart to ponder the question, “How long does a pre-approval last?” Even after you’ve received a lender’s stamp of approval for your financing, weeks or even months could pass before you actually buy a house. Will that pre-approval you receive still be valid by then? Since lenders realize that buying a house does take time, pre-approval dates have a shelf life, but not a definite one. While the length of time varies, in general, a pre-approval is good for about three months. Here’s what homebuyers need to know to make the most out of this time frame, and what to do if your pre-approval is at risk of running out before you buy a home.  The first step to buying a home should be to prove that you have the financial means to do so through a pre-approval. This is a process through which a mortgage professional examines a loan application to determine whether a potential buyer will qualify for a mortgage.  “A pre-approval is usually good for anywhere from 90 to 180 days.” To obtain a pre-approval, buyers need to provide a mortgage lender with information like their employment history, credit score, income, and debts. During this process, the lender will want to see bank statements, pay stubs, and tax returns. It can feel invasive, but lenders are looking to protect their interests by not loaning money to someone who could be considered “high-risk.” These are people who have high, outstanding debts, inconsistent income, or a history of late payments. Once a lender reviews your finances, they will give you a pre-approval letter, detailing a good-faith willingness to extend mortgage financing based on its preliminary examinations of your assets, income stream, and creditworthiness. This letter will also detail the actual loan amount that you qualify for.  How long does a pre-approval last? Although there is no definite duration, the custom within our industry is that a pre-approval is good from anywhere for 90 to 180 days, but many may consider it “too old” after three months. The reason? In three months, your financial life can change drastically. You can buy appliances, a car, or do plenty of other things to affect your home buying prospects. Since pre-approvals do have a shelf life, it’s best to not get one until you’re seriously looking for a home. I hope this information has been useful to you. If you have any other real estate questions or needs, don’t hesitate to reach out and give us a call or send us an email today. We look forward to hearing from you.    

For today’s topic, we’re going to discuss the benefits of buying or selling in the fall or winter. Contrary to what you might think, the passing of the summer season doesn’t necessarily equate to stagnation in the market now.   There are great tax advantages to buying or selling late in the year. Buyers who close escrow before year’s end will enjoy tax write-offs that they otherwise wouldn’t receive in the new year. This can result in highly significant savings for you when tax season rolls around.  It’s not just buyers that reap the benefits of end-of-year moves—closing costs and home improvements are also tax-deductible.  You don’t have to fight the winter weather. If the frightful winter weather is keeping you from purchasing a home late in the year, it may be best to buy in the fall months. This comes with its own set of advantages that will not only allow you to dodge any unpleasant winter weather, but also to get cozy in your new home just in time for the holidays.  You’ll have greater availability to services. Buying in the fall or winter can also open up greater access to resources, such as moving services, which the influx of buyers and sellers in the spring and summertime make hard to find.   The “off-season” is anything but. Due to a higher scarcity of buyers and sellers in the fall and winter months, closing at a realistic asking price can be most easily accomplished during this window. Coming up with a good pricing strategy is sure to make your home shine brightly over the competition.  “Due to a higher scarcity of buyers and sellers in the fall and winter months, closing at a realistic asking price can be most easily accomplished during this window.” Buyers will likely see an upsurge in the chances they’ll get a home that’s within their budget, since bidding wars and homes selling above asking price are less of a factor this time of year. Competition may drop in the fall since people often consider it to be the “off-season,” but this is far from the case for a serious buyer—there seldom is a drop-off in inventory in the fall and winter seasons.  Less competition and stable inventory are highly attractive to buyers. This is mutually beneficial to both buyers and sellers because it means that a seller’s agent won’t have to wade through one non-serious offer after another.  Lastly, if you need to make some last-minute home improvements before it’s time to sell, contractors and subcontractors tend to be more available and at a lower cost with the slower pace that the fall and winter bring.  As always, please give us a call or email us with any other real estate-related needs or questions. We’d be happy to assist you however we can.     

We’re back with another update on the Wasatch Front real estate market. In the third quarter of 2019, we saw a significant jump in sales. Year to date, we’re up 2.1% with over 37,700 homes sold so far in 2019. The average price for all home types is over $383,000. At the same time last year, our average price was just over $354,000. That’s an 8.2% year-over-year increase, which is great news if you’re a homeowner looking to capitalize on your equity by selling. Our average days on market along the Wasatch Front is 47 days—a 20% increase from the 39-day average we saw at this time last year. “Prices are rising, but so is our supply of homes.” Our overall inventory for all housing types is at a 3.8-month supply. Anything less than six months is considered a seller’s market. The market is still very good, but homes are taking slightly longer to sell.  The third quarter also brought us some of the lowest interest rates we’ve seen in a few years. As we finish the third quarter, rates jumped up a bit, but are still fantastic.  Prices continue to go up, but there’s more inventory available. Couple that with solid interest rates and we have a good market for buyers and sellers right now. If you have any questions for us in the meantime, don’t hesitate to give us a call or send us an email. We look forward to hearing from you soon.

Most home sellers are also homebuyers. Because of this, the inevitable dilemma of which transaction to complete first comes up. Buying first is ideal because it allows you to take your time and there are much fewer hoops to jump through. Most people can’t afford two mortgages at once, however, so selling first is a reality for many. In either case, there are plenty of different options that will lead to a smooth process. 

Home sellers and their agents want their properties to remain show-ready at all times while they’re on the market; but ensuring that this is the case can be a chore—especially if said sellers have already moved out. Whose job is it to pick up the newspaper, shovel the driveway, and keep the grass trimmed? Unfortunately, it usually isn’t feasible for a seller who has already moved away to take care of these daily or weekly tasks. So whose shoulders does this home maintenance fall on? “Until the property has sold, its condition remains the responsibility of the seller.” Well, until the property has sold, its condition remains the responsibility of the seller. Buyers will lose interest and neighbors will become testy if your home becomes an eyesore.  Don’t assume your real estate agent is your gardener or maid. Even though they also have a vested interest in making sure your home sells quickly and at a high price, it isn’t their job to stay on top of its general upkeep. Some agents may be up to the task, but you shouldn’t presume this to be the case until you’ve had a candid discussion about it.  Some agents may refuse to take responsibility for these tasks not because they mind doing the work, but because they don’t want to be blamed in case anything goes wrong.  In general, the best way to ensure a vacant home is well-maintained while its on the market is to hire relevant contractors or a property manager to take care of the necessary tasks. Your agent will likely be happy to help coordinate the fine details so long as you, the seller, are the one taking bids and making payments. A good agent will also often have a network of vendors with whom they can connect their seller, if necessary.  The bottom line is that, no matter the situation, a quality real estate agent will have your best interests at heart and will be more than willing to guide you through whatever obstacles you encounter during your home selling experience.  If you have any other questions or would like more information, feel free to give us a call or send us an email. We look forward to hearing from you soon.

What do 2019’s second-quarter statistics say about the Wasatch Front market?  Home sales are up 4% compared to last year, with over 13,000 single-family homes, townhomes, and condos being sold. Year to date, sales are down 2.5% with nearly 24,000 total homes being sold. The good news is, the average sale price for all home types has risen to $375,000. Last year during this time, it was $355,000. If you’re a homeowner looking to capitalize on your equity, you’re in fantastic shape.  Year over year, the average days on market increased by 20% from 40 days to 49 days. Meanwhile, inventory for all housing types is at 4.7 months, which is still relatively low.  “Moving forward, we expect to see a wild ride for mortgage rates, so the only question is whether they’ll be more or less advantageous for home shoppers.” Mortgage rates have taken a turn for the better, and it has everyone rushing to buy homes. Specifically, Freddie Mac says the average 30-year rate hit 3.82% in June, which is the lowest it’s been in two years.  This is one of the best times in history to purchase or refinance, but will rates remain this low? President Trump’s pressure on the Federal Reserve plus low inflation and lackluster economic data has one commentator predicting that we’ll see the lowest rates ever in the next 12 months.  Moving forward, we expect to see a wild ride for mortgage rates, so the only question is whether they’ll be more or less advantageous for home shoppers. As prices go up, we see more and more available inventory. When you couple this with stable interest rates, which should help affordability, we have conditions that favor buyers.  If you have any questions about our market or you’re thinking of buying or selling a home soon, don’t hesitate to reach out to us. We’d be happy to help you.   

Buying and selling real estate can be complicated and there are a lot of opportunities along the way for transactions to fall apart. Here are the primary reasons that real estate deals fall apart based on our experience: 1. Pre-contract deal-killers. The first stage of a transaction occurs before an offer is even made. On the side of the seller, a few things could keep them from going through with a deal. They might change their mind after a lowball appraisal, a low offer, or a repair list that’s much too long. Overall, most of these pre-contract deal killers come from the buyer, though. 2. Post-contract deal-killers. After there is an accepted purchase contract that’s signed, there is another list of potential problems that could arise and kill the deal. Most revolve around money, repairs, and who is going to fix or pay for them. Sometimes, however, buyers simply get cold feet because they didn’t do their homework up front. Maybe they weren’t prepared for a big to-do list or there were some larger issues uncovered during a home inspection. 3. Buyers who made a contingent offer but were unable to sell. Every home is sellable. However, some homes take longer to sell for a variety of reasons. One of the most common reasons a real estate deal falls through is that a potential buyer can’t sell their current home or buy their new home without selling it first. If you’re selling your home and receive a contingent offer, you should not count on that particular buyer shaking your hand at the closing table. Home sale contingent offers in real estate have a much higher risk of failing than offers that don’t have home sale contingencies. 4. The buyer is denied their financing or loan. In a perfect world, every potential homebuyer with a pre-approval would get to the closing table, but this simply isn’t the case. Having a pre-approval letter is important for a buyer, but it doesn’t guarantee your mortgage will be fully funded. Until the closing occurs, a buyer isn’t guaranteed to receive a loan. There are situations, such as the buyer losing their job or experiencing health issues, that no loan officer can control. 5. Pre-settlement walk-throughs. The biggest issues here have to do with things being left behind, not being left behind, or fixtures or window coverings that should have been taken. Unknown utility liens and property taxes can pop up, too. For most of these problems, a bit of money or making a small change to the contract’s terms will fix the problem. Finally, you should know that about one in four real estate contracts that are accepted end up failing. That’s a rather high number. This is why it’s important to work with a highly experienced real estate agent when navigating the home buying and selling process. Be aware of the common pitfalls of failed transactions, because that increases the odds that your deal won’t fall through. If you have any questions for us in the meantime, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon. 

Today we’re going to discuss six ways to get your home ready for sale this spring: 1. Let natural light in. Open up your blinds, windows, and let that natural sunlight in. 2. Renovate what’s outdated. If your kitchen or bathroom is stuck in the 1980s, it’s time to freshen it up a bit to get top dollar for your home. Updated faucets, towel racks, and cabinets are things you can do even if you’re on a tight budget. 3. Think small with renovations. Don’t overdo it with expensive renovations. Instead of replacing all of your cabinets, just paint or replace the doors. If you’re going to spend money, spend it on curb appeal. 4. Paint with whites and neutrals. A fresh coat of paint is relatively inexpensive and an easy way to give your house a facelift. Keep the colors neutral so that buyers can better imagine the home as their own. 5. Fix anything that’s broken. Repairs can take some time, but getting them out of the way allows you to sell your home much faster.  6. Pay attention to odors. The smells inside your home can kill a home sale, and you may not even notice a lot of them. If you have pets, smoke, or regularly cook fragrant foods, consider getting your carpets freshly cleaned and adding a fresh coat of paint. “Let as much natural light in as possible.” If you have any real estate-related questions or needs that I can assist you with, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon. 

A question about the viability of purchasing a starter home in today’s market was recently posed to us, and it boils down to this: Should you invest now in a starter home or would it be more prudent to wait and save for your forever home? Let’s first make sure we’re talking about the same thing—among economists, the prevailing definition of a starter home is one that falls within the lower-third of the market’s valuation, unlike, say, trade-up or luxury homes.  Homebuyers themselves may define a starter home a little differently, though; rather than a starter home’s defining characteristic being price, the question that’s front and center for buyers relates to time. Therefore, to a buyer, a starter home is one that they may only live in for a few years.  This is where the dilemma really lies. If you choose to purchase a starter home, the bulk of your payments in the first few years of ownership will go toward interest, which hampers your ability to build any equity in the home.  “The best time to buy is imminently approaching.” In fact, some estimates indicate that the break-even point for starter homeownership is somewhere around five to seven years. To put it simply, if you plan to live in the home for a short period of time, it might not make sense to buy at all.   To be perfectly clear: We aren’t necessarily telling you not to buy a starter home. In some cases, going this route may be squarely within a buyer’s interests. Staying in a home for more than five years, for example, will allow you to build savings that might otherwise go to rent and also build equity over time.  You might also find that, with the right renovations and care, your starter home could blossom into your forever home. Alternatively, you could keep the home and rent it out at a later time if your plans change.  Ultimately, this decision should be based on decisions and preferences specific to your situation. Let’s say, after careful consideration, you’ve decided a starter home is right for you. If that’s the case, take note: The best time to buy is imminently approaching. Why? Per Trulia, starter home inventory sharply increases and listing prices drop in fall and winter, which translates to maximal choices at less cost to you.    If you’re curious about what homes are becoming available in your area, check out this list. If you’re looking to sell a property, click here for a free home evaluation. Either way, if you have questions related to real estate in any way, give us a call at 801-859-7509. We’d be happy to help!

It’s always our goal to keep you educated about all things real estate so you can accomplish your buying, selling, and investment goals. Today we’ll be talking about how co-borrowers works in real estate. We’ve seen home values increase by over 30% in the last five years, and combined with recent interest rate hikes, affordability has been affected—especially for first-time homebuyers. As a result, we’re seeing more and more people purchase properties together. It makes sense: Rather than waiting to afford something on their own, they’re compounding their homeownership efforts. Co-borrowers are creating long-term partnerships of five to 10 years, even creating LLCs to spell out the terms. Others have taken title as tenants in common instead of through common joint tenancy. “We’re seeing more and more people purchase properties together.” Tenancy in common imposes joint liability and several liability of tenants, meaning each owner can be liable for property taxes and deductions equal to the amount they paid. Simply put, tenancy in common allows several people to share their interest in real property while retaining the freedoms that would be restricted through joint tenancy. If you’d like to buy real estate but are unable to on your own, and you have a friend or family member who’s in the same boat, consider a partnership. Whether you want to have a home to live in or a property to invest in, you can compound your purchasing power together. Keep in mind that when you’re purchasing as a partnership, both credit scores will be used. The lowest score will determine the financing ability and interest rate. If you have any topics you’d like us to cover in the future, have any questions, or need further information, feel free to reach out to us. We look forward to hearing from you soon.

What’s the latest news from our Wasatch Front market as we move further along into 2019? To answer that question, let’s first compare the statistics from the fourth quarter of 2018 with 2017’s fourth quarter. Home sales dropped 7% from just over 9,600 to 8,994. The average sale price, meanwhile, increased 8% to $350,000. For new construction homes, the average asking price rose a little over 8%. The average days on market for all housing types decreased 5% from 43 to 41 days. With interest rates rising almost a full percentage point during that time and an exceptionally low number of starter homes available, first-time buyers are being squeezed pretty tightly right now.  Currently, we have a tale of two markets. Our supply of inventory for all home types is at 5.3 months, and because a six-month supply is considered a level market, we’re close enough to that mark to be considered a level market too. However, for homes priced under $350,000, there’s just a 3.9-month supply, which is a strong seller’s market. For homes priced over $500,000, we have a 10-month supply, which is a strong buyer’s market. In other words, the higher you go in price, the more we become a buyer’s market.  Our market can also be described as more of a trickle-up market, meaning first-time buyers dictate the rest of the market’s movement. When a first-time buyer buys a home, that seller is able to move up into the next price range. In that sense, we can see how a lack of supply impacts the higher price ranges. “Slightly slower economic and demographic growth along with higher prices and interest rates will dampen demand.” What about the year-over-year numbers from 2018 as a whole? The number of total home sales stayed relatively flat compared to 2017. The average home price increased 9% to nearly $340,000, while the median price rose 10% to $300,000. The average market price decreased 5%. Like our fourth quarter snapshot, home prices continued to rise while affordability decreased. That being said, the supply of inventory increased from 3.19 months to 4.06 months. What’s in store for 2019? Slightly slower economic and demographic growth along with higher prices and interest rates will dampen demand, which will mean fewer single-family home sales but more condo and townhome sales as more buyers seek affordable housing. Overall, prices are expected to rise between 5% and 7%. Single-family home sales are expected to decline 8%, while condo sales are expected to increase 7%. When you combine the two, we expect the total number of sales to drop 4%. With fewer expected sales but higher sale prices, it’s still a great time to sell your home. As we finished the fourth quarter of 2018, the Federal Reserve was expected to increase interest rates four times this year, and there was some speculation that we could see rates rise as high as 6%. Those expectations have been tempered a bit, and we’re now expecting just one adjustment this year. If you’ve been holding off on buying a home due to high interest rates, it might be time to get off the fence and make a move. If you’re thinking of buying or selling a home or you have any more questions about our Wasatch Front market, don’t hesitate to reach out to us. We’d love to help you.

A quick note before we begin today’s topic: We’re not tax professionals here at the Stern Team, so please be sure to meet with a qualified CPA for more details. If you don’t know one, we’re happy to refer one whom we trust completely to you. Every four years, some candidate for higher political office tries to focus our attention on equalizing the tax laws and repealing the homeowner benefits, but these arguments have consistently fallen on deaf ears. Thankfully, our own local political action committee has successfully fought off and worked diligently to ensure that our legislators don’t tack on the insidious transfer fee, which gets charged to the seller or buyer at closing. For those of us who own homes, here’s a list of the itemized tax deductions available to the average homeowner. Every year, you’re permitted to deduct the following expenses: 1. Taxes. Real property taxes, both state and local, can be deducted. The one exception is that tax filers can deduct on Schedule A any combination of state and local property taxes, as well as income or sales taxes, but only up to a total of $10,000. Interestingly, married couples who file their own separate tax returns can only deduct up to $5,000. However, it should be noted that real estate taxes are only deductible in the year that they’re paid to the government. Thus, if in the year 2018, your lender held money in escrow for taxes due in 2019, you can’t take a deduction for these taxes when you file your 2018 tax return.Mortgage lenders are required to send an annual statement to borrowers by the end of January each and every year that reflects the amount of mortgage interest in real estate taxes that the homeowners actually paid during the previous year. 2. Mortgage and interest. Interest on mortgage loans on a first or second home is fully deductible, subject to the following limitations: Acquisition loans—up to $1,000,000 Home equity loans—up to $100,000 If you are married but file these separately, these limits are split in half. Note that for the new loans taken out after December 14, 2017, the limit on the deductible mortgage debt is reduced to $750,000. Loans in existence prior to that date are grandfathered in.You must understand the concept of the acquisition loan: To qualify for such a loan, you must buy, construct, or substantially improve your home. If you refinance for more than the outstanding indebtedness, the excess amount does not qualify as an acquisition loan unless you use all of the excess to improve your home. However, any other excess may qualify as a home equity loan; if you pull out a home equity loan, you actually have to use that money to improve your house. 3. Points. Because mortgage rates are still considerably low, not too many borrowers right now are paying points. But with interest rates on the rise, this is something to attend to. When you obtain a mortgage loan in order to get a lower-rate mortgage, you would pay one or more points up front. Whether referred to as loan origination fees, premium charges, or discounts, they’re still points. Each point is essentially 1% of the amount that’s being borrowed. If you obtain a loan of $170,000, each point will cost you $1,700 and the interest rate on your loan will then be lowered. The IRS has also ruled that even if points are paid by sellers, they’re still deductible by the homebuyer. Points paid to the lender when you refinance your current mortgage are not fully deductible in the year that they’re paid; you have to allocate the amount over the entire life of the loan.For example, if you paid 1,700 points for a 30-year loan, each year you’re permitted to deduct only $56.66. However, when you pay off this new loan, any remaining portion of the points that you have not deducted are then deductible in full. “It should be noted that real estate taxes are only deductible in the year that they’re paid to the government.” Needless to say, if you have any questions about these tax benefits, discuss them with your financial and legal advisors. We hope that this topic has been useful for you, and if you have any real estate questions, don’t hesitate to reach out to us. We are happy to help you.

There’s a misconception among many sellers out there that any commission they pay to their Realtor will be reduced if they’re able to secure a buyer on their own.  At the heart of the real estate transaction, the goal is to obviously find a buyer to sell the property to, but there’s much more that goes into finalizing the process. In the event that you find your own buyer, it’s oftentimes spelled out in your contract that you, nevertheless, remain beholden to pay a specific amount to your agent.  With this in mind, you can request a flexible commission plan. If you make a point of requesting this up front, your agent may be agreeable to establishing this type of plan with you. Should you find your own buyer, this will allow for the possibility of adjustable commission. But what is the true value you extract from your agent’s efforts?  Contrary to what you might think, finding a buyer is a relatively small piece of the process for your agent. Once you’ve accepted the buyer’s bid, your agent has the responsibility of doing paperwork with all other parties involved—the buyer’s agent, legal representation, and even title companies. “Contrary to what you might think, finding a buyer is a relatively small piece of the process for your agent.” Before signing an agreement with an agent, take the opportunity to discuss services and commission. If you have a pre-established idea of what you’re willing to pay and it’s somewhat lower, understand that this means the scope of services your agent provides might be narrower. As the old adage goes: You get what you pay for.  From there, your agreement should detail what you’ll pay, whether or not you can cooperate with other agents, your agent’s responsibilities, the length of the contract, and whether or not you can cancel.   For help with any and all of your real estate needs, please give us a call or send us an email. We’d love to help however we can!  

Home affordability is shrinking rapidly, according to research by Arch Mortgage Insurance.  In the first quarter, affordability (defined as the size of the monthly mortgage payment needed to buy a home) dropped by 5%. This was mainly due to the increase in mortgage rates. As a consequence, more people are now stretched and taking on greater debt relative to their income. Other buyers are being pushed out of the market altogether.  “There’s no need to panic if you’re a homebuyer.” And that’s not all: Affordability is expected to drop an additional 15% to 20% by the end of the year. That’s because home prices continue to rise, and the Federal Reserve is expected to ratchet up its reference interest rate, which often leads mortgage rates, two more times this year. What does this mean for you? If you’re looking to sell, you won’t have a hard time finding a buyer. Even with decreasing affordability, demand for homes still far outstrips supply. However, it’s certain that buyers will look to take advantage of current conditions before affordability drops further. That means that this spring and summer might see an additional rush in the real estate market. It also means that right now might be a very good time to list your home if you’ve been thinking about selling for a while. On the other hand, if you are thinking of buying a home, you might think that this news spells doom for you. However, there’s no need to panic. While affordability is dropping, it is still well above historical averages (just like current mortgage rates). In fact, Arch Mortgage Insurance estimates that homes are now 15% to 20% more affordable than they were in the period from 1987 to 2004. When rates go up, it will affect what your monthly payments will be on a new home. From this perspective, it makes sense to move now in case you’ve been looking to buy before rates rise further.  So what’s the next step? If you’re thinking about buying or selling a home, give us a call. We’d be happy to answer any questions you may have. We look forward to hearing from you soon.

For today’s topic, we’re going to discuss the benefits of buying or selling in the winter. Contrary to what you might think, the passing of the summer season doesn’t necessarily equate to stagnation in the market now.   There are great tax advantages to buying or selling late in the year. Buyers who close escrow before year’s end will enjoy tax write-offs that they otherwise wouldn’t receive in the new year. This can result in highly significant savings for you when tax season rolls around.  It’s not just buyers that reap the benefits of end-of-year moves—closing costs and home improvements are also tax deductible.  You’ll have greater availability to services. Buying in the winter can also open up greater access to resources, such as moving services, that the influx of buyers and sellers in the spring and summertime makes hard to find.  “Due to a higher scarcity of buyers and sellers in the fall and winter months, closing at a realistic asking price can be most easily accomplished during this window.” The “off-season” is anything but. Due to a higher scarcity of buyers and sellers in the winter months, closing at a realistic asking price can be most easily accomplished during this window. Coming up with a good pricing strategy is sure to make your home shine brightly over the competition.  Buyers will likely see an upsurge in the chances that they’ll get that home that’s within their budget, since bidding wars and homes selling above asking price are less of a factor this time of year. Competition may drop in the fall since people often consider it to be the “off-season,” but this is far from the case for a serious buyer—there seldom is a drop-off in inventory in the winter seasons.  Less competition and stable inventory are highly attractive to buyers. This is mutually beneficial to both buyers and sellers because it means that a seller’s agent won’t have to wade through non-serious offer after non-serious offer.  Lastly, if you need to make some last-minute home improvements before it’s time to sell, contractors and subcontractors tend to be more available and more affordable with the slowing down of business that the winter brings.  As always, please give us a call or email us with any other real estate-related needs or questions. We’d be happy to assist you however we can.

Unfortunately, real estate deals don’t always make it all the way through closing. There are a number of reasons they can fall apart, and today we’d like to share five such reasons: 1. The buyer and/or seller encountered pre-contract problems. This includes issues like a lowball offer, an extensive list of repairs, or an appraisal problem. 2. The buyer and/or seller encountered post-contract problems. Whether a buyer gets cold feet, the buyer and seller can’t agree on how to handle repairs, or a problem with financing arises, there are several different things that can kill a deal once the buyer and seller are under contract. 3. A contingent buyer failed to sell their current home. One of the most common reasons a real estate deal falls through is that buyers who need to sell their current property before buying their next may be unable to do so. “Whether for one of these reasons or as a result of something else, about one in four real estate contracts will fail.” 4. The buyer was denied financing. In a perfect world, every buyer out there would be going about their search with a pre-approval letter in hand, but this isn’t always the case. Financial issues on the part of the buyer are a major reason deals can fall apart. 5. There were issues with the pre-settlement walkthrough. Even once the closing table is in sight, last-minute problems can pop up and sink an entire deal. Liens, a previously unnoticed safety issue like mold, or an unforeseen financial hardship could all pose a threat. Whether for one of these reasons or as a result of something else, about one in four real estate contracts will fail. And this is exactly why it’s so crucial to work with a highly experienced agent who can help you navigate the buying or selling process and avoid these common pitfalls.  If you have any other questions or would like more information, feel free to give us a call or send us an email. We look forward to hearing from you soon.

It can be a scary world out there—though a majority of people are good and honest, some like to try taking advantage of others. The real estate market is no exception, so today we’ll be looking at the scams we want to make sure you’re aware of: 1. Mortgage closing scam. This scam has become so prevalent that the FBI estimates it’s led to over $1 billion in stolen/diverted funds in 2017 alone. It begins when a hacker gains access to a real estate agent’s email account. When it’s time to close a deal, the hacker poses as the agent and sends money-wiring instructions to the homebuyer. The truth only comes out after the buyer has already lost thousands. Never wire money without confirming the account with your title company and/or your agent. 2. Fake real estate agents. Similarly to the previous scam, the scammer will impersonate someone who is legitimately involved with a deal. The hacker will often pretend to be a real estate lawyer who is associated with a sale and, at the time of closing, call or email the homebuyer with changes to the money-wiring destination. If this works, the buyer loses a lot of money. In Utah, wire fraud is happening on housing every other day. 3. Bait and switch. Unlike the first two, this scam targets sellers. It also doesn’t require any hacking or impersonation; it just needs a dishonest buyer. Here’s how it works: A buyer makes an offer above selling price and the seller happily agrees. The contract is signed, but then the buyer begins procrastinating and dragging out the process for weeks and months. In the meantime, the seller is becoming worn out emotionally in continuing to pay costs for the home. Finally, the buyer says they can only buy at a lower price and the desperate seller agrees. “We are proud of our guaranteed sale program.” How can we protect ourselves from these and similar scams? Don’t send account information over email, confirm everything over a valid phone number or in person, and find an agent who you trust to represent your best interests. If you’re ever in need of an agent you can put your faith in, our doors are always open. If you’re looking to buy or sell a home, have any questions, or need more information, feel free to reach out to us. We look forward to hearing from you.

Despite some concern, a market crash isn’t imminent, and there are nine reasons why. 1. There are many differences between the market of 2005 and the market of today. In 2005, for example, subprime loans totaled more than $620 billion and comprised about 20% of the mortgage market. In 2015, they totaled only $56 million and comprised just 5% of the mortgage market. 2. Banks have raised lending standards. According to CoreLogic’s Housing Credit Index, loans originated in 2016 were among the highest quality of the past 15 years. In October 2009, the average FICO score was 686. In 2001, the average score was between 490 and 510. 3. Tighter lending standards have made a difference in the flip market. Lenders now only finance 55% of the home’s value—the flipper has to come up with the rest. During the subprime crisis, banks lent 80% or more. 4. Nationally, the number of homes sold today is 20% below the pre-crash peak. There’s only a four-month supply of inventory, and as a result, about 64% of Americans own their homes, compared to 68% who owned their homes in 2007. 5. Home sales are lower because the recession interfered with a lot of people’s ability to start a career and buy a home. Faced with a poor job market, many decided to further their education. As a result, they’re now burdened with school loans, which makes it less likely that they can save enough money to buy a home. This will keep demand down. “Loans originated in 2016 were among the highest quality of the past 15 years.” 6. Home prices have outpaced income. The average income-to-housing cost ratio is 30%. In some metro areas, it has skyrocketed to 40% to 50%. Unfortunately, metro areas are also where the jobs are, and this forces young people to pay more for rent and be closer to a job that doesn’t pay enough to buy a house. 32% of home sales today are going to first-time homebuyers. Historically, that number has been closer to 40%, according to the National Association of Realtors. Typically, this buyer is 32 years old, earns $72,000 per year, and pays $182,500 for a home. A two-income couple pays, on average, $208,500 for a home. 7. Homeowners aren’t taking as much equity out of their homes. Home equity rose to $85 billion in 2006 and then collapsed to less than $10 billion in 2010. It remained at that level until about 2015, and by 2017 it only rose to about $14 billion. Obamacare is one reason for that— bankruptcy filings have fallen 50% since the ACA was passed in 2010. 8. When adjusted for inflation, housing prices are only at a similar level to where they were in 2004. From 2012 to 2017, prices rose 6.5% a year on average. From 2002 to 2006, they rose 7.5% per year (in 2005, they skyrocketed 16%). 9. Home builders focus on high-end homes. New homes are large and more expensive—the average size of a new single-family home is almost 2,700 square feet. In 2006, the average size of a new single-family home was 2,500 square feet. If you have any more questions about our market or you’re thinking of buying or selling a home, don’t hesitate to get in touch with us. We’re here to help.

Today we’re excited to share our third quarter market statistics for the Wasatch Front. These numbers are through October 4 of 2018 and we’ll be comparing them to the numbers that we saw through October 5 of 2017. As for home sales, they’re relatively stable and unchanged from last year. Nearly 28,000 single-family homes, townhomes, and condos have sold along the Wasatch Front so far this year. Our average sale price through three quarters of 2018 is $341,173 with the median price being $303,000. Last year, our average price was $309, 657 with a median price of $272, 761. This means that our average price and median price have both increased by nearly 10% in just this past year. Interest rates are up about 1% year over year for 30-year mortgages. They’ve gone from just over 3% to about 4.62% year over year. As of October 4, we’ve seen five consecutive weeks of rate increases on 30-year mortgages. Additionally, we’ve seen the Fed increase their rate three times this year with a fourth on the horizon. Most experts predict them to raise rates an additional three times in 2019 and once more in 2020. I think of this as more of a normalization of interest rates than a spike. If you go back to 1990, our average interest rate is around 6.6%. Don’t be surprised if we get close to that number by the second or third quarter of 2019.  “Prices are up about 10% and the supply of homes remains tight.” The average days on market along the Wasatch Front is 38 days, only 5% less from the same time last year at 36 days. Our overall inventory is currently sitting at 3.95 months of supply. This is a relatively low level of inventory. However, our inventory has gone up by 16% from the second quarter of this year. As we’re seeing more and more price decreases among listing inventory with interest rates hitting a seven-year high, we’ve seen affordability drop, leading to more existing inventory and adjustments in price. In fact, nationally, more than 25% of all homes listed on the market experienced a price drop in the month of September. In areas of the country that have seen significant price growth in recent years like Seattle, San Francisco, Los Angeles, and Portland, we’re seeing these rising interest rates put a halt on demand. These are areas with three or fewer months’ worth of supply and unemployment rates below 4%. The general narrative here is that prices are up by about 10% on the Wasatch Front, while the supply of homes remains tight, especially in the entry-level price range. At the same time, supply levels above that price range are beginning to increase and loosen some of the pressure on pricing. If you have any real estate-related questions or needs that we can assist you with, don’t hesitate to give us a call or send us an email. We look forward to hearing from you soon.

Our goal is to keep you educated about all things real estate so that you have the ability to make great decisions when it comes to your own home buying, selling, or investing goals. Today’s topic is why fall is a great time to sell a property. Sometimes it pays to go against the crowd. The real estate market is definitely at a peak during the spring and summer, but going against this trend and listing your home in the fall can have some great benefits:1. Buyers are more serious. During the spring and summer, many buyers are more curious than actually committed to purchasing a property. On the other hand, buyers in the fall tend to be more serious. Many have been searching throughout the summer and have not found their perfect home yet. Other fall buyers are simply forced to look for a new home because of a new job, a work relocation, or because they want to complete their move ahead of the holidays. In other words, fall buyers make up in dedication for what they might lack in numbers. “The fall is a great time to make a move up.” 2. There’s less competition. It’s no secret that most homes are listed in the spring and summer. However, homes that are not sold by the end of the summer are often delisted or simply overpriced for their condition. Otherwise, they start to draw less interest because of the time they have spent on the market. If you list in the fall, you have the benefit of standing out, as well as facing less competition than during the “hotter” seasons. 3. It’s easier to move up. If you’re looking to buy a new home and also sell your current one, then the fall market may offer the best opportunity to do so. You will enter the market with confidence and without stress, while many sellers who have been unsuccessful in selling their homes during the summer will be more eager to sell during this time. This can lead to very flexible negotiations that will work in your favor.If you have any questions about why the fall is such an opportune time for you to sell or about the home selling process in general, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.

To understand how a home inspection benefits you as a buyer, you need to first understand what a home inspector does and what’s all included in a home inspection.  First, although you can choose your own home inspector here in Utah, they aren’t actually required to be licensed in our state, so make sure your Realtor can recommend an inspector who’s held to a high standard or is a member of the National Association of Home Inspectors (NAHI).  Second, home inspections are intended to point out adverse conditions—not cosmetic flaws. You should attend the inspection and follow the inspector throughout the process so you can learn what’s important and what’s not. No house is perfect, and an inspection is bound to uncover some faults. An inspector will point out conditions that need to be repaired or any other safety-related items. They won’t comment on any cosmetic items if they don’t impair the integrity of the property. The also won’t conduct any destructive testing.  Third, home inspection reports include only the basics. A home inspector considers hundreds of items during an inspection. Their report should cover all of the home’s exterior and interior features and comment on the working order of things like the faucets and the garage door opener. They may also point out termite damage and suggest that you get a separate pest inspection. The final written report should be concise and easy for you to understand.  “A home inspection gives you the information you need to make a sound buying decision.” Fourth, home inspectors work for the party who’s paying the fee, which is you. The NAHI Standards of Practice and Code of Ethics states that their members act as an unbiased third party to the real estate transaction and will discharge their duties with fidelity and integrity to the client. A reputable home inspector will not conduct an inspection or prepare an inspection report if their fee is contingent on untruthful conclusions. The inspection should maintain client confidentiality and keep all findings private (unless required by a court order). This means that if you’re a seller you have the choice of disclosing the report to others. If there’s a failure in the integrity of the home or with any of its systems, though, you must report them.  Fifth, inspectors aren’t responsible for the condition of the home. Inspectors don’t go behind walls or under floorings, so it’s possible that a problem can get overlooked. Also, keep in mind that inspectors aren’t a part to the sale’s transaction, so if a major problem surfaces after the sale is complete, you won’t be able to make them liable or get to them to pay for it getting fixed. In fact, you may not be entitled to any compensation beyond the cost of the inspection. As a buyer, you just need the inspector to decide if the home is in a condition you can tolerate. You can then show it to the seller to negotiate a better price or point out repairs that need to be made. You can also take it to a contractor and use it to remodel the home.  The one thing you shouldn’t do when buying a home is skip the home inspection because of the cost or any undue pressure from the seller. It’s also important to note that inspections are required by many lenders, especially for FHA loans.  For older homes, be sure to have the plumbing and sewer lines inspected during your inspection. Additionally, you can talk to your inspector about adding other tests to the basic inspection, like a radon or mold test. Most competent inspectors your agent refers you too will add these tests anyway, though.  If you have any other questions about home inspections or how they can benefit you, please feel free to reach out to me. I’d be glad to help you.  

How do you know if it’s the right time to sell? If this is something you’ve been wondering lately, we’ve got some good news: It’s a great market for sellers right now. Limited inventory continues to drive up home prices, and the latest data from the National Association of Realtors shows that recent listings spent an average of just one month on the market.  “Having a knowledgeable professional working on your behalf will be the key to your real estate success.” With these incredible factors in mind, let’s now turn to some relevant advice by businessman and author Dave Ramsey. According to him, knowing whether you’re ready to sell comes down to identifying these seven signs:   1. Equity is on your side. During the market crash in 2008, millions of American homeowners found themselves with negative equity. This meant they owed more than their homes were worth. But, today, home values have been on the rise. To determine how much equity you’ve built in your home, simply grab your latest mortgage statement and find your current mortgage balance. Next, find your home’s current value by asking an experienced agent to run a free comparative market analysis. Once you have these two numbers in hand, subtract your current mortgage balance from your home’s estimated market value. The result of this equation will be a good approximation of your current equity position.  2. You’re out of debt and have cash in the bank. Being a money-smart homebuyer by taking a hard look at your finances will be key to your success. If you’ve got a good store of emergency funds reserved, this is a positive sign that you’re ready to make your next real estate purchase.  3. You’re ready for a home that better suits your lifestyle. If your current home doesn’t match your current needs, it may be time to make a change.  4. You can cash-flow the move. Don’t get so excited by the thought of your next home that you forget to account for the cost of leaving your current one. Hiring professional movers, contractors, stagers, and more are all expenses to consider. That said, small changes can go a long way in getting your property market-ready. 5. You’re emotionally ready to sell. Even if you are financially stable enough for another home purchase, the matter of selling your current home can still be a major emotional drain. You must be committed to facing potential difficulties associated with the listing process before you can think about reaping the benefits of a home sale.  6. You understand the market. No one can predict exactly how the market will perform, but staying on top of developing trends will make you more successful as both a buyer and a seller.  7. You have a real estate agent. Each real estate market is unique, so consulting an experienced local Realtor will help you discern whether selling is advisable given your particular circumstances. Ultimately, having a knowledgeable professional working on your behalf will be the key to your real estate success.  If you have any other questions or would like more information, feel free to give us a call or send us an email. We look forward to hearing from you soon.

So you’ve decided to sell your house, and you can’t wait to buy a new place. However, there’s just one thing standing in the way: You’ve got to close the deal on your current home first. You hope it doesn’t take months to get an offer, since you want to sell your home fast and for as much money as you can. If this describes you to an extent, I want to provide you with five no-cost tricks to sell your home faster in today’s market. A study by the Real Estate Staging Association found that homes that were staged before listing received an offer in just 23 days on average. That’s 90% faster than those who waited months after listing to bother with staging. With that in mind, here are your top five tips: “An experienced agent can lend a fresh eye and help you reimagine your home.” 1. Channel your inner neat-freak. You always knew your tidying tendencies would come in handy one day, right? Well, it’s time to clutter-bust your way through to the buyers’ hearts. Pay particular attention to junk vortexes like kitchen and bathroom counters, fireplace mantels, laundry rooms, pantry shelves, tabletops, bookshelves, magazine racks, and so on. 2. Rearrange your furniture. Once all the clutter is out of the way, take a step back and look at the big picture: Does your home invite buyers to sit and stay awhile? Can buyers move freely through your home without bumping into this? If not, you have some work to do. Start by putting bulky pieces of furniture into storage and moving furniture away from the ways. Many times, rooms are put together for the kids’ sake, allowing them to play in the middle of a room or so that the TV can be seen from every chair. Buyers want to walk in and see an open, yet intimate, space that inspires conversations. If you have a fireplace, go ahead and make that the centerpiece to which your furniture points. An experienced agent can lend a fresh eye and help you reimagine your home. 3. When you clean, think like a buyer. Many people underestimate just how clean your home needs to be when preparing to put it on the market. This isn’t your average weekend tidy-up; think of it as spring cleaning on steroids. You need to think about what buyers look for and then get down to the nitty-gritty. That means addressing even the smallest details and making them shine, like your ceiling fans, floorboards, window blinds and sills, tile grout, tubs, sinks, and so on. 4. Set the table if people are coming over. Staging paints a picture for potential buyers, allowing them to imagine living in your home. If they can see that a family lives here and can have company over, then they’ll see that for their own family, too. Nothing represents family and company life quite like a nicely prepared dinner table, so break out the nice flatware and add some seasonal flair with a dash of bold colors. Set two to four places at the table and arrange a decorative centerpiece on top of a neutral table runner. Check out websites like Pinterest for more ideas. 5. Bring the outside in. Make your house feel like a home by taking advantage of what’s in full bloom right outside your door. Fresh flowers are very inviting; they warm up a room and send a message that yours is a really nice space to be in. If plucking decorations from your yard isn’t an option, stop by your local flower shop or grocery store. If you do have a few bucks to spare, you may want to consider spending it on paint and mulching in the front yard. Buyers give you about three seconds to make the sale. Mulch and fresh paint will go a very long way. Of course, every home is different, so before you spend one red cent freshening up your casa, ask a real estate agent you trust for advice. You see, a true pro knows what buyers in your area want and can help you maximize your home’s appeal without breaking the bank.  As always, feel free to give us a call if you have any questions or have a topic you’d like us to discuss. I’d love to help you out.

Did you know that you can use self-directed IRAs to purchase investment property? It’s true. The IRS permits retirement accounts like IRAs to invest in real estate, among other options. There are a lot of advantages to using a self-directed IRA, or a solo 401(k) plan, to buy real estate. The first advantage is tax deferral (or tax-free growth). If you were to purchase a $250,000 property with retirement funds, and later sell that property for $450,000, the $200,000 profit you earned would, generally, be tax-deferred.  Alternatively, gains earned from an investment property purchased with personal funds would be subject to federal and state income tax.  The second advantage is that a self-directed IRA can allow you to invest in hard assets you know and understand, such as rental property.  Finally, having the ability to invest in alternative assets outside of the stock market is believed to be a great source of investment diversification.  “Always become familiar with the locality, rental rates, and the costs involved with purchasing and holding property before investing in real estate using an IRA.” But before buying real estate in Utah with a self-directed IRA, there are three things you should consider.  1. Research. It’s important that you do your due diligence on the real estate asset you plan to purchase with your IRA. This means you should become familiar with the locality, rental rates, and the costs involved with purchasing and holding real estate as an investment. 2. Price. Unlike stocks or mutual funds, which typically don’t have ongoing costs, real estate investments will carry expenses like property taxes, maintenance costs, and insurance fees. Keeping a three-month reserve of funds for each investment property is advisable, as this will help you cover vacancies and repairs.  3. IRA custodian options. Most traditional financial institutions and banks don’t allow IRA holders to buy real estate with their investment account, since it doesn’t generate a profit for the institution. However, there are a number of self-directed IRA custodians throughout Utah, and the United States as a whole, that allow clients to make alternative investments like real estate. There are essentially two options you have if you plan to purchase investment property with your IRA. Your first option is a custodian-controlled self-directed IRA, and your second is a checkbook-controlled self-directed IRA.  In a custodian-controlled IRA, the holder will direct the custodian to invest in traditional and alternative assets. A checkbook-controlled IRA, meanwhile, requires that a special-purpose LLC is established. This LLC would be wholly owned and managed through a local bank account by the IRA holder. The use of the LLC allows the holder to act quickly and cost-effectively when the right investment opportunity presents itself.  The custodian-controlled option is often used by IRA investors looking to make alternative investments without a high frequency of transactions, like the purchase of raw property. The checkbook-controlled option is popular among IRA investors interested in making real estate investments with a high frequency of transactions, such as rental properties or fix-and-flip projects.  While using a self-directed IRA to invest in real estate is becoming more popular, it’s still important to think about the benefits and considerations mentioned today. We also recommend consulting with a tax professional for further guidance.  If you have any other questions or would like more information, feel free to give us a call or send us an email. We look forward to hearing from you soon.

I want to talk to you today about the seller’s disclosure. First and foremost, do not be afraid of the seller’s disclosure. State and federal laws are strict in requiring sellers to disclose what they know about the condition of their homes, but this isn’t obvious or discernable to a potential buyer. Buyers are unable to see behind walls or under houses, so they rely on truthful information from the seller about the operations, appliances, and systems of the home. When you sell a home, your real estate agent is going to present you with the federal and state mandated disclosure called a real estate disclosure statement. “While disclosure forms do allow you to answer “I don’t know” or write “N/A” to a question, you should only do so if you are unsure about the condition of that item.” You are required to disclose the presence of things like lead paint, radon, asbestos, and other toxic products if you know your home has them. While the forms may ask you to disclose whether or not you know there are lead paint and radon present, you are not required to do tests to determine the presence of toxic chemicals. However, your buyer’s lender could always require proof of tests and/or remediation for any problem that has been disclosed, such as fire or water damage. It’s important to answer every question as truthfully as you can. You must answer the questions yourself because your real estate agent, as a professional, can’t fill out the disclosure for you. However, they can help you understand what is being asked of you. If you’re in doubt about what you should disclose, it’s best to err on the side of too much information rather than not enough. While disclosure forms do allow you to answer “I don’t know” or write “N/A” to a question, you should only do so if you’re unsure about the condition of that item. If you answer that you don’t know the condition of an appliance that you use daily, such as a sink or bathtub, that might actually raise some suspicions in the eyes of the buyer.  The best way to feel confident about the condition of your home is to have it inspected by a licensed, professional home inspector. Your real estate professional will be able to recommend someone to you. For a few hundred dollars and a few hours of your time, you’ll either find that your home is market-ready or the inspector will bring a problem to your attention that you can fix. If you have any questions about this or buying or selling, please feel free to call or email. I look forward to speaking with you soon.

What’s the latest news from our Wasatch Front market? Here are the latest year-over-year numbers from our second quarter through June 21.  Over 11,000 homes have sold so far, which is nearly a 5% increase compared to the 10,500 that sold during 2017’s second quarter. We also saw a 9% increase in the average sale price. Interest rates rose from 3.91% to 4.62% for 30-year mortgages, and experts agree that we’ll probably see rates over 5% by the end of the year.  There’s no need to panic, though. Over the last 42 years, the average interest rate is 8.4%, so we’re still well below that mark. Even if we go back as late as 1990 and hit the reset button, the average interest rate is still 6.6%. The average days on market dropped 10% to 41 days, and our level of inventory for all housing types is 3.3 months. Remember, all markets are driven by supply and demand. Generally, a market is considered “level” when it has between five and six months of inventory. Anything below that is considered a seller’s market; anything above is considered a buyer’s market.  “Entry-level home availability is low.” For homes priced under $350,000 along the Wasatch Front, there’s only a 2.5-month supply of homes. Between $350,000 and $500,000, there’s just above a four-month supply. Above $500,000, there’s a 5.5-month supply.  As you can see, entry-level home availability is low, and I expect that we’ll continue to see tight inventory and lots of competition in that price range throughout the rest of the year.  If you’re selling your home, now’s a great time to act, but there are still strategies you must use to get the most for your home, so make sure you talk to an experienced agent. If you’re a buyer, you absolutely must work with an experienced buyer specialist to find and close on the home you want.  If you have any other questions about our Wasatch Front market or you’re thinking of buying or selling a home, don’t hesitate to reach out to me. I’d be happy to help you. 

There are 10 home repair and maintenance tips that every Utah homeowner should know, and I’d like to share this list with you today.  1. Change your furnace filter every three months. This will extend the lifespan of your furnace and will also keep it running more efficiently.  2. Fix leaky faucets. Being proactive and fixing leaks expediently is critical. Doing so will cut costs on your water bill and prevent what could become serious damage.  3. Unclog your drains. I recommend pouring a cup of white vinegar down all the sink and shower drains in your home. This will help prevent clogs and eliminate odors. 4. Know the location and functions of all the switches on your circuit panel. Having this knowledge could make future electrical issues much easier to approach. 5. Fix squeaky doors and cabinets. This can be achieved by rubbing vaseline or WD-40 on the hinges.  “To prevent water damage, you will need to caulk (or re-caulk) certain areas of your home periodically.” 6. Know the location of your water shut-off valves.  7. Understand how to operate your water shut-off valves.  8. Determine whether water drains away from or toward your home. This can be easily tested by placing a ball near your foundation and watching which way it rolls. If the ball rolls toward your home, your property’s foundation is at risk of water damage.  9. Check that your water heater safety valve is working properly. The last thing you want is an exploding water heater. The pressure valve on the top of the heater can be popped up. Then, the line will be drained outside of the house into a visible location. If you see water coming out of the drain, the pop-up valve may have failed and needs to be replaced.  10. Caulk necessary areas as-needed. To prevent water damage, you will need to caulk (or re-caulk) certain areas of your home periodically.  If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

Sometimes, homebuyers wonder if it’s even worth trying to compete over homes in a hot seller’s market. When there is very little inventory in the market, it isn’t unusual for a single property to receive upwards of 20 offers. And only one buyer can win. Nevertheless, it is almost always a good idea to write an offer anyway. So let’s discuss six tips to help make your offer outshine the rest. 1. Submit a large earnest money deposit. Pending home sales sometimes blow up. Sellers are often worried that once they commit to an offer, the winning buyer might back out of the transaction or default on the contract after all the other potential buyers have disappeared. An earnest money deposit speaks volumes to the sellers about your commitment as a buyer. And once the deal goes through, this money will go toward your down payment.  2. Show sellers that you’re qualified by presenting a loan approval letter. This letter is what we like to call “the golden ticket.” Almost every offer in a multiple offer situation will be accompanied by a lender letter. To stand out, ask your lender for a full loan approval letter. Being pre-approved is different than being pre-qualified. When you are pre-approved, the seller will essentially view you as a cash buyer. So make sure you undergo the pre-approval process before beginning your home search.  3. Give the seller time to move. Buyer possession is often a sticking point. It’s hard enough to juggle multiple closings when you’re buying and selling simultaneously, let alone when the seller on the other end of your transaction is doing the same. Cut the seller some slack and allow them to take a few days after closing to finish up their move. Doing so without expecting any compensation will help your transaction go much more smoothly. Also, before sealing the deal, it’s critical for you to have a home inspection. By federal law, you have 10 days to have the home inspected for lead-based paint. Tightening your time frame or removing related contingencies from your contract can help you stand out as a buyer. “In today’s market, you’ve got to offer your highest price and best terms right out of the gate.” 4. Write a letter to the seller. Moving can be as emotional an experience for the seller as it is for the buyer. Writing the seller a letter can be an effective way to let them know how much you love the home. It can also be an opportunity to tell them about how you plan to care for the property.  5. Write your best offer from the beginning. Don’t hope for negotiation. In today’s market, you’ve got to offer your highest price and best terms right out of the gate. Make your offer attractive, whether that means offering a little above list price or using an escalation clause to ensure yours is the highest offer. You can also speak to your agent about performing a comparative market analysis, as sellers sometimes deliberately set their home below the price of comparable sales in order to generate multiple offers. Paying a little extra doesn’t necessarily mean you’re overpaying. What you may have thought was a high price may actually be market value.  6. Consider submitting a backup offer. If at first you don’t win, try and try again. Also, realize that about 24% of all accepted offers are going to fail. If a listing agent doesn’t accept your offer, then write an addendum to your offer using a secondary backup clause. The Wasatch Front MLS system includes backup statuses. This means Realtors have access to an entire database of sellers who are actively looking for backup offers. Of course, the success of your offer will also vary depending on the agent you work with. If you aren’t working with a buyer’s specialist, your chances of winning will be greatly diminished. Our team has over 30 different strategies for helping buyers win in a seller’s market. We would love to apply to be your representative as you embark on your next home search. So if you have any other questions, would like more information, or are interested in working with us to achieve your real estate goals, feel free to give us a call or send us an email. We look forward to hearing from you soon.

My goal is to keep you educated about all things real estate so that you have the ability to make great decisions when it comes to your own home selling, buying, and investing goals. With that in mind, I want to talk to you today about the first quarter housing statistics for the Wasatch Front. First quarter sales are actually up this year, having increased about 6% from 2017. Already, 6,500 homes have been sold in the first quarter of the year. That’s compared to 6,100 in 2017. Additionally, we’ve seen an 11.5% increase in the average sales price year over year along the Wasatch Front. Right now, we’re actually nearing $400,000.With interest rates beginning to rise, and with inventory being exceptionally low for starter homes, first-time homebuyers are being squeezed pretty tight. On top of that, the average time on the market for all housing types along the Wasatch Front is decreasing. Last year, the average was about 53 days, and right now, the average is about 48 days. That’s about 10% less time to sell a home at the start of this year. For all price ranges, we have an inventory level of 3.7 months, meaning it would take 3.7 months for us to sell all of the homes we currently have on the market if no new homes were added. A balanced market is one with around six months’ worth of supply, so we are indeed in a seller’s market. “The market is kind of a trickle-up market; first-time buyers give the rest of the market the ability to move on.” Currently, we have a tale of two markets: If we look at homes priced under $350,000, our entry-level price, we have well under a three-month supply of properties. However, when we look at homes priced above, say, $500,000, we have close to a seven-month supply of homes. The higher up in price that you go, the more the market favors buyers. Really, the market is kind of a trickle-up market; first-time buyers give the rest of the market the ability to move on as well. For example, when a first-time buyer purchases a home, that gives the seller the ability to move up into a home in a different price range. We can see how the lack of supply and affordable housing actually impacts the market in the higher price range. We have more supply of those higher priced new construction homes along the Wasatch Front. The average price is up just over 8% for the first quarter of this year over last year.Given the fact that cities like Salt Lake City, Provo, Lehi, and Ogden have all made top-10 lists for places to live, work, and invest in homes, it’s expected that prices will continue to increase through the remainder of 2018. I expect that we’ll continue to see very tight inventory at the entry-level price range with lots of competition. It’s a great time to sell your home! There are strategies you must use to ensure that you get the most from your agent. For buyers, you’ll need a full-time buyer’s agent with experience in navigating these waters. Do not go it alone. If you’re thinking about selling your home or you have any other real estate questions, don’t hesitate to reach out to me. I’d be glad to help you.

Today I want to tell you the truth about interest rates and how they affect home sellers and buyers in the current market. Interest rates have been on the rise over the last couple of months, and we shouldn’t be surprised by this. In fact, most experts have been predicting the increase in mortgage rates for the last two years. First, let’s garner a little perspective about what’s normal in terms of interest rates. If we go back over the past 42 years, the average interest rate is about 8.4%. For the younger population, that’s simply not realistic. If we go back to 1990, the average rate was 6.8%. Today that number is somewhere around 4.5%. We’re still quite a bit lower than the historic average. he Federal Reserve prefers to keep the Fed Funds rate between 2% and 5%. This is the sweet spot for maintaining a healthy economy and matches the nation’s GDP growth which falls between 2% and 3% annually. Here, the natural unemployment rate is between 4.5% and 5%. Price increases remain below the Fed’s inflation target of 2% core inflation rate. But there were times in history when the nation’s benchmark interest rate was well above the sweet spot. That was to curb runaway inflation. Since 2008, it’s been well below that point to stimulate economic growth. Once you see how the Fed changes the Fed Funds rate, then you’ll understand how it manages inflation and recession. The current Fed Funds rate is about 1.5%. The Fed signaled it will raise rates to about 2% in 2018, 2.5% in 2019, and 3% in 2020. “When mortgage interest rates go up by 1%, the cost of owning a home goes up by about 10%.” The rate is critical in determining the U.S. economic outlook. This means that interest rates are likely to continue their rise to normalcy. How will that affect homebuyers? As you can see on the chart in the video at 2:24, when mortgage interest rates go up by 1%, the cost of owning a home goes up by about 10%. In other words, if you were shopping for homes priced at $350,000 and interest rates went up by 1%, now you’d be shopping for homes priced at $311,100 to get the same monthly payment. That’s a pretty significant difference. If you’re a home seller, realize that we’re in a trickle-up economy. This means that if there’s a 1% increase in interest rates, you’ll have 18% fewer potential buyers. Statistically, if an interest rate increases by 1%, then we lose the bottom 18% of first-time homebuyers. They’re the answer to the move-up buyers, since they’re buying the move-up buyers’ homes. This story plays out all the way up the housing price chain. As a side note: because of the continued low interest rates, affordability has remained near record-lows going back again about 42 years. What is the affordability index? This index tells us what percentage of the average household income at the average interest rate it will take to buy the average home. Nationally the average is around 22%. This is around the fourth or fifth lowest on record—strike now while the iron is hot and sell while the buyers are still able to buy. If you have any questions about this topic, don’t hesitate to reach out to me. I’d love to help you any way I can.

With each and every home that I’ve purchased, I’ve gone through this period of cold sweats that we in the industry call “homebuyer’s remorse.” It’s very likely that you may experience it too. So what can you do about it? First, create a list of your top 10 wants and needs (five of each) with regards to the home you’re eventually looking to purchase. This list should be made before you select a home so that you’re sure that the home you pursue will fit as many of each as possible. Most people will end up owning five homes before they retire, which means that you’ll find probably five or six of these things on your list if you’re a first-time homebuyer. Does the home include the most important features on your list? What qualities made the house you chose stand out from the others you looked at? Did you find many houses that met your needs, or was this one a rarity? If you can back out of the contract, is it realistic to think that you’re going to find a house that’s better, in terms of your list?Analyzing the facts that led you to the home will help you sort out your feelings about the purchase. Was it truly a poor choice, or would you be nervous moving forward on any house? “We are proud of our guaranteed sale program.” Here are some scenarios that can bring on buyer’s remorse: 1. Family dissent. If you have discussions with your family about your purchase, they often mean well, but it’s not uncommon for family and friends to question your choice and how much you paid for it—especially if it’s your first house. However, do they really know the current market? They might not have bought a home themselves in several years; things have changed since their time. 2. Continuing to look at houses. Unless you feel like your contract has a good chance of falling apart, the appraisal will be unsatisfactory, or the inspection might uncover serious repair issues, stop looking at other homes. 3. Real estate agents who offer no guidance. Some agents don’t guide their buyers through the closing process, causing questions and doubts to pop up. The agents aren’t around to provide answers and assure the buyers that what they’re feeling is normal. Unanswered questions can put buyers in a panic mode, especially when it’s their first home. Panic leads to doubt and, ultimately, buyer’s remorse. Nothing in life is actually certain. We tend to think about the uncertainties even more whenever we make important commitments. The bottom line is when you buy a house, you’re going to go through that weird, cold sweat experience that is homebuyer’s remorse, and it’s normal. If you have any questions that you feel like you’re not getting answers to or would like to know more about Salt Lake City Real Estate, please don’t hesitate to reach out to The Stern Team. We would be happy to help you.

If you plan on selling your home this year, there are a couple things you must do to prepare. Every market is different, but these tips will certainly apply regardless of your area. 1. Add a fresh coat of paint. Buyers these days begin their search online, so you want to make sure your home looks as good in person as it does in your virtual listing. A fresh, neutral coat of paint will go a long way. 2. Clean up. Pressure-washing the exterior of your home, cleaning the windows, and adding planters with flowers can all make your home much more attractive to buyers. These and many other little touches will help your property stand out. 3. Plan a great marketing strategy. You’ve got to cast a broad net to capture the most buyers possible. Marketing to a wide number of buyers will allow you to sell your home for a high price and in a low amount of time. A great marketing strategy is a worthwhile investment. It makes sure no money is left on the table. 4. Interview real estate agents. If you’re interested in working with an agent, interview several before making a decision. Ask them about their track record, their strategies, and what they would highlight about your home. If you’re interested, I do have a list of the top 10 questions to ask potential agents that I would be happy to send you. So, feel free to get in touch. “Marketing to a wide number of buyers will allow you to sell your home for a high price and in a low amount of time.” 5. Price correctly. To make sure you set a price that is fair and competitive, look at homes in your area that have sold in the last 90 days and compare them to your property. The homes you look at should be similar in age, lot-size, and style. Beyond looking at past sales, you should also look at the active competition on the market. Look at homes that are pending and see how long they were on the market before accepting an offer. All of this information will help you determine the best price possible. 6. Toss any junk. If you’re going to move anyway, why not get a head start on getting rid of the things you don’t need? Packing and decluttering will give your home an open feel. Remove anything that isn’t decorative from the flat surfaces in your home, including counters, bookshelves, desks, cabinets, and more. 7. Stay on top of the market. In order to be successful in the market, you need to have an idea of what’s been going on. Brush up on current and past trends and statistics. The real estate market can and will change quickly, so it’s good to stay current in your understanding of market conditions. If you would like additional tips or have any other questions, feel free to give me a call or send me an email. I look forward to hearing from you soon.

There are many reasons why 2018 is going to be a great market for real estate investing. Here are the top seven reasons to invest in the Wasatch Front real estate market: 1. Strong economic indicators. The 2018 economy looks sunny-side up. For all you novice and expert real estate investors out there, it’s a simple equation. If the economy is growing, then the housing market will see positive repercussions and growth in turn. In fact, the Wasatch Front just made the PricewaterhouseCoopers and Urban Land Institute’s Top 3 U.S. Markets to Watch list. Additionally, Salt Lake City was named No. 6 in the Top 10 Housing Markets for 2018 according to Realtor.com’s 2018 National Housing Forecast. That is great news for the Salt Lake City real estate market. This year, we expect more people to sell houses, buy houses, and get mortgage loans. 2018 is a great year to get your first rental property and delve into real estate investing. Not only is real estate a safe investment option, it’s a financially rewarding option for the long haul. 2. It’s easier to get a mortgage. It has been tough to get a mortgage for a while, but it’s easier to get a mortgage due to lenient credit qualifications and low interest rates. This means more people are taking out loans to finance their investment properties, whether it’s a condo, single-family property, or multi-family property. Real estate investors are taking advantage of this perk and investing heavily in the real estate market left and right. The competition is strong out there, but you have a good chance of getting approved for your loan and kickstarting your real estate business today. A mortgage is a great way to leverage an investment. You can’t borrow money to put into the stock market, and the stock market does not provide you with a tangible investment anyway. 3. Appreciation. Real estate is one of the safest investments out there, and it is a great long-term investment strategy. Your rental properties increase in value over time, given that the property is in a prime location and growing economy. You will be able to sell your property for a lot more money and make a good profit 20 or 30 years down the road, and in the meantime, you will receive rental income every month. “Real estate is one of the best long-term investment strategies out there.” 4. Tax benefits. There are certain tax advantages to investing in real estate. Real estate is a business, and any business owner, entrepreneur, or investor out there gets tax exemptions and benefits for owning and running a business. Investors who own a rental property can write off the interest rate charged on the mortgage, and appreciation, expenses, maintenance, and repairs associated with the property. That said, it’s very important to hire the right accountant to get more tax exemptions and help you with the money along the way. 5. You will have a steady flow of income with a rental property. Not only are you becoming your own boss, but you’re also earning a steady flow of rental income every single month. This passive income is one of the best reasons to invest in real estate today. If you get the right tenants, you can secure a steady flow of cash for a long time, and you avoid the risk of vacancy. Trust me, I’ve been doing this a long time, and good tenants matter. Nevertheless, it’s important that you always underestimate your rental income and overestimate expenses. Don’t forget, your rental income is helping you pay down your mortgage payments. That’s a win-win situation. 6. Financial freedom. In the long run, one reason to invest in real estate is to accumulate wealth. Owning rental properties is passive income for the long haul. In the most ideal case (i.e. no vacant units), whether you want to save for retirement or use that extra income for a side hustle, investing in real estate is the answer to gain financial freedom for years on end. It took me less than 12 years to buy and pay off all the investment properties that I have now. You can do this, too—it’s not rocket science. 7. Financial security. In a nutshell, real estate offers investors financial security for many years down the line. When you own a tangible asset that’s bound to appreciate over time, you have the financial security to sell it for a lot more than its original price. If you need cash, you can always sell the property. If you don’t sell, you’ll continue to earn passive income from the tenants who are also helping to pay down the mortgage. The financial security you’ll find in real estate is what makes it a very lucrative business for a lot of people. As you can see, there are a number of reasons to invest in real estate in 2018. You could reap the financial benefits if you start today. If you have any questions about investing in Wasatch Front real estate or Salt Lake City real estate, be sure to reach out to The Stern Team. We would be happy to help you!

We’re proud to be able to share another great endorsement for The Josh Stern, this time from Tommy and Joe Johnson of the “Johnson & Johnson” morning radio show. Here’s a snippet of what they had to say: “Josh sells a home, on average, almost two months faster than the average agent, and there’s no risk to working with Joshua. He offers a no-hassle cancellation policy so if you’re not happy with the service you receive, you’re free to get out of the contract. But don’t worry—you’re not going to do that, because they really are going to sell your home.” “If we had to sell our home, the only agent we’re calling is Joshua Stern.” It’s true—we offer a cancellation policy that guarantees if you’re not happy with the level of service you receive from us, you can pull your listing at any time. We’re confident we will sell your home, though. As we’ve said before, we know Salt Lake City and Wasatch Front real estate, and we know how to get results in these markets. If you have any questions for us or you’re looking to buy, sell, or invest in Salt Lake City real estate, give us a call or send us an email. We’d be happy to help you.

Recently, I had the opportunity to act as a guest speaker on the Salt Lake Community College program “Bruin Voices.” Cited below for your convenience are timestamps which will direct you to various subjects I go over in the video above. Feel free to watch my full message or use these timestamps to browse specific topics at your leisure: 00:13 - Introduction. 00:51 - Creating a personal mission. 4:39 - The science of success and the six paths to mastery: Self-mastery. 5:44 - The science of success and the six paths to mastery: Implementation of 80/20 rule. 7:30 - The science of success and the six paths to mastery: Moving from “E” to “P”. 9:12 - The science of success and the six paths to mastery: Having a learning-based mindset. 10:34 - The science of success and the six paths to mastery: Remove limiting beliefs. 12:59 - The science of success and the six paths to mastery: Accountability. 14:49 - Review and demonstration of the science of success. If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

I’ve got a report card to share with you today for the Wasatch Front real estate market in 2017. Let’s start with some of the numbers for single-family homes. Single-family home sales were down slightly in 2017. They dropped 3.5% from where they were in 2016 and we saw 28,000 of them. If we go back to the previous height of the market in 2006 when 28,300 single-family homes sold,** t**hat was our strongest sales year ever in terms of home sales and we’re very close to that level right now. The average sale price for single-family homes is up about 6% year-over-year, from $305,000 to $323,000. A big reason for this is because of the limited availability of entry-level housing and the luxury market picking up momentum as well. Home prices have increased about 16% over the last few years. Over the last 40 years, we have seen an average appreciation of 3.2%, so this is definitely an indicator of Utah’s growing population and the new home builders’ inability to keep up with demand. It’s a great time to be a home seller and move up to take advantage of the market. Let’s switch over to condos and townhomes. In terms of the total number sold, we saw nearly identical numbers in 2016 and 2017. However, 2016 was a record year for condo sales so it looks as if we’ve had another one of those this year. The average condo price in 2017 was just over $209,000, an 8.4% increase over 2016’s record high average. Keep in mind that one in five condos sold along the Wasatch Front were new construction and naturally priced higher. “Things are looking strong along the Wasatch Front in 2018.” Let’s switch over to condos and townhomes. In terms of the total number sold, we saw nearly identical numbers in 2016 and 2017. However, 2016 was a record year for condo sales so it looks as if we’ve had another one of those this year. The average condo price in 2017 was just over $209,000, an 8.4% increase over 2016’s record-high average. Keep in mind that one in five condos sold along the Wasatch Front were new construction and naturally priced higher. We’re expecting some big things from the Wasatch Front market in 2018. Salt Lake City was named No. 6 in the Top 10 Housing Markets for the 2018 National Forecast. Price Waterhouse Cooper and the Urban Land Institute ranked Salt Lake City No. 3 on their list. We were also recently named the No. 6 housing market in Realtor.com’s list of Top 10 Housing Markets in 2018. Finally, let’s talk about interest rates. We assumed that we would have seen those 5% rates already, but it just hasn’t happened yet. We weren’t the only ones who were wrong about our assumption. Most experts predicted that rates would hit or exceed that 5% mark by the end of 2017. Lawrence Yun, the Chief Economist of the National Association of Realtors, expects that we will see an average rate of around 4.6% this year on the standard 30-year fixed rate loan. Realtor.com, meanwhile, is expecting rates to hit 5% by the end of 2018 due to stronger economic growth, inflationary pressure, and monetary policy normalization in the year ahead. Things are looking strong here along the Wasatch Front in 2018. If you have any questions for me about anything discussed above or anything else relating to your real estate goals, don’t hesitate to reach out and give me a call or send me an email anytime. I look forward to hearing from you soon.