Shauna Ray, President
Northern Wasatch Association of REALTORS®
Real estate listings with more than 100 showings. Houses selling for thousands more than appraised value. Buyers competing with dozens of other buyers for the same home.
It’s no surprise that these are the kinds of stories coming from Utah’s ultra-hot real estate market. After COVID-19 quarantines, people are re-evaluating their living arrangements and their priorities for where they want to live — trends that are exacerbating an already-existing housing shortage.
At the end of August, there were approximately 8,200 active real estate listings in Utah. That’s a record low, according to Utah Association of Realtors records that date back to 2003.
Meanwhile, in Davis, Morgan and Weber counties, inventory levels are about half of what they were last year. In all three counties, there is less than two months of supply. That’s significantly less than the six months of inventory that would signify a balanced market.
With high demand and low supply, house-hunters must have a strategy if they are serious about buying one of these fast-moving homes. This is particularly true for anyone buying a home priced less than $400,000.
Below are some strategies to help give you greater success in this hot market:
If you want a shot at buying a home, it’s essential to watch the market and be ready to make an offer right after a house is put up for sale. If possible, schedule a showing for the day the property goes on the market.
If you decide you like the house, be ready to make an offer, mostly likely the same day. The best houses will always sell quickly.
A Realtor who represents your interests as a buyer will alert you to new listings and will help you put together an offer. Your Realtor will also help you determine how quickly you need to act depending on local market conditions in your area and price range.
Be ready to make an offer above list price
In some areas of Utah, homes are selling for $15,000 to $20,000 above list price. Ask your Realtor about conditions in your area so you can determine how much you need to offer and how much earnest money you need to put down.
Set a budget then determine a price range that includes some flexibility so you can offer more than the asking price.
Be mindful of contingencies
The most competitive offers will be ones that are all cash and not dependent on getting a mortgage and having an appraisal.
While many buyers don’t have the luxury of making an all-cash offer, there are ways to make your offer more appealing. This includes having a short timeframe for conducting evaluations and inspections. You’ll also want to show that you’re pre-approved for a loan and can finalize the transaction quickly.
Additionally, you shouldn’t make the offer contingent on selling a house you already own.
In sum, your goal is to demonstrate to the seller that you are a serious buyer who’s likely to complete the purchase quickly.
Get in back-up position
Even with your best efforts, the seller might not choose your offer. However, if you really love the home, work with your Realtor to see if the seller will accept a back-up offer. While there are no guarantees, you might have another chance to purchase the house if the first buyer needs to back out.
Have a great financing partner
There are often unexpected challenges when purchasing a home. For the best chance of success, you need to work with a lender who will pre-approve you and help you meet all your contract deadlines. You don’t want an appraisal delay or problem with underwriting to jeopardize your ability to finalize the transaction.
Talk to your Realtor about recommendations for trusted lenders who will help you make it to closing on time.
To learn more about how to buy a house during a hot seller’s market, contact a Northern Wasatch Realtor. A directory of local Realtors is available at NWAOR.com.