Every state has it’s unique benefits and challenges for those considering their first foray into real estate. We reached out to a local Utah realtor to answer some fundamental questions about the first time buyer experience as well as specific questions about buying a home in Utah.
Our Utah Home Expert: Dustin Brohm
Dustin Brohm is a top Salt Lake City real estate agent, blogger, entrepreneur, and smart home expert. Dustin is also the founder of SearchSaltLake.com, a website & blog serving and educating home buyers and sellers in Salt Lake City, Utah.
Dustin loves new technology, and has become an expert on using that technology to have the most effective real estate marketing possible. Dustin is an avid traveler, who also loves sports and being in the mountains. But above all that, he enjoys spending time with his family and being a Dad to his little boy. His team specializes in selling homes in Salt Lake City and the surrounding areas of Cottonwood Heights Utah, Holladay, Millcreek and Olympus Cove.
Utah For First Time Buyers: An Interview-o-graphic
Q1. What’s the biggest fear you hear about from first time buyers about the process, and how do you respond to it?
Usually it’s the fear of “the buying process” itself, and the fear of committing to buying a home. When a first-timer doesn’t know what to expect, they’re intimidated. As they should be. When you can’t see the road ahead of you, it’s hard to not be nervous or afraid. The only way to overcome that is to educate the buyers. Give them a run down of what they need to prepare for and expect in coming days and weeks. I like to refer them to a great infographic or article that visually shows them what lies ahead. Once they know what to expect, the fear subsides and the excitement comes back again.
In terms of fearing commitment, again this comes down to educating them on all the different “outs” they have as a buyer, and how they really aren’t signing away their first born kid. Couple that understanding about the buying process with some perspective on why home ownership beats the hell out of renting, and they’re usually ready to rock. We need to wear a few different hats when working with first time homebuyers. We need to be a coach, a mentor, a teacher, and a babysitter. Remember it’s their first time! Teach them how the process works in a way that everyone can understand, and you’ll be setting them (and yourself) up for success and excitement.
Q2. When you bought your own first home, what did you learn about the process?
Actually going through the process is the best learning experience ever. It’s one thing to “know” certain things that you learned in a book or from classes, but you truly comprehend on the deepest level when you actually experience the process for yourself. Applying for and getting a mortgage of my own was the biggest learning experience. Since buying my own home, it’s helped me relate to my buyer clients, because I have gone through the same roller coaster of emotions and stress that they have.
Because of that personal experience, I’m able to be much more helpful to the buyers. Buyers should always ask their prospective Realtor if they have ever personally bought a home before. If the answer is no, common sense tells you that there is no possible way that the Realtor can ever fully relate to the process the buyer is about to begin.
Q3. Is now a good time to be a first time buyer? Why or why not?
By now I think most people are sick and tired of hearing Realtors and loan officers say “there’s never been a better time to buy a home!”. When they say the same thing every single month, month in, month out, it’s easy to see this advice as nothing more than just Realtors trying to sell homes. With that said though, there is a ton of evidence that right now really is an amazing time to buy a home. “The best time ever?” That’s hard to say, but if you look at the current housing climate in the U.S. it would be intellectually dishonest for anyone to say that it’s NOT a great time to buy real estate.
First, mortgage rates are so crazy low. When you look back at the 18% interest rates in the late 70’s-early 80’s and compare that to the 4% rates we see now, it’s mind blowing. Even if mortgages rates tick up a bit, it’s still an extremely great time to finance a home. Second, there are home prices. In Salt Lake City, Utah where I live, home values have been going up steadily for years, with no real end in sight. Of course they won’t keep going up forever (duh!) but right now, they are.
This means that those who bought a home 1-2 years ago have benefited greatly from that increase in value. Those that buy now will most likely be glad they did a few years from today, assuming values keep going up. You know what the say… “the best time to buy real estate is today, and 30 years ago.”
Q4. Is there anything special or unique about your city or state that first timers should know about?
Salt Lake City is without question, The Most Beautiful Major City on Earth!! Ok, that’s probably a bit overstated, and I am very biased. But I absolutely love Salt Lake, for many different reasons. You’ll see why so many people are moving to Salt Lake City.
Aside from being at the feet of the Wasatch mountains and having world-class ski resorts within a 30 minute drive, Salt Lake is getting a ton of national praise and recognition for being so economically robust. Go ahead and Google “Salt Lake City unemployment rate”… it’s 2.9%! We have jobs being created hand over fist and major corporations are opening offices here. Goldman Sachs, Adobe, eBay, Twitter, etc are all opening up shop in the Salt Lake area. Housing follows jobs, and with the incredible job growth in Salt Lake City right now, it’s a safe bet that 5 years from now you’ll be kicking yourself for not buying Salt Lake real estate now. There are great schools, plenty of post offices and Gas prices are around $1.56 at the time I write this! Salt Lake is so affordable compared to the majority of the nation that it’s just an amazing place to live. If you don’t move here, you at least need to come out for vacation and check out our mountains, whether summer or winter. Hell, I’ll even buy you a coffee and show you around!
Utah First time buyer programs
USDA – 100% financing and 0% down payment
- Property must be located in an eligible area.
- Income restrictions do apply. These are determined by county.
HomeReady Program 2016
- Loan Purpose:Purchase or Limited cash-out rate and term refinance
- Occupancy is 1-4 units Principal Residence.
- Loan to Value up to 97%
- NO First Time home-buyer requirement
- Adjustable rate and Fixed rate options available.
- No Income Limits in low-income census tracts
- 100% AMI (area medium income) census tracts or designated disaster areas
- 80% of AMI in other tracts. Use this link to see your eligible AMI https://www.fanniemae.com/
- Occupant may not have an ownership interest in any other property at the time of closing
- Non -Occupant borrowers are permitted at max 95% LTV, income can be considered as part of qualifying income. No property limitation on ownership of other property for the non-occupant borrower
- Standard debt to income is 45%, in certain cases up to 50%
- Home Ownership education is required and certificate must be retained i the mortgage file.
GOOD NEIGHBOR NEXT DOOR – These homes are 50% off
- Police Officers, Firefighters, Teachers, and Emergency Technicians are eligible
- Find Eligible Homes Here.
100% GIFT FOR DOWN PAYMENT
- Can be Conventional or FHA Loan
- Gift can come from a family member, church, employer, etc..
FHA – 3.5% down payment required
- The most common loan for a first time home buyer
- The whole down payment can be from a gift
- Flexible underwriting guidelines
- The seller can pay your closing costs up to 6%
- Non Occupant Co signers are allowed
Are you a first time buyer? It doesn’t matter if you’re in Salt Lake City Utah or Provo we can help find the right program and get you pre-approved!