Just a quick post to tell you about a new feature I have added to our main website. I have developed a number of maps detailing the location of subdivisions within Salt Lake County. At the moment these are limited to subdivisions located with South Jordan, Sandy, Bountiful, Draper and Holladay, but new ones will be added over the next few weeks/months.

The maps are developed using Google Maps V3, which provides some really useful features. If you zoom far enough into the map, local establishments such as coffee shops and restaurants are displayed on the map. You can also perform a search for establishments by using the search box located to the top left of the map. Lastly you can switch to street view by dragging the person shaped icon onto a map location.

Keep your eyes out for more cities to be added over the coming weeks.

Oct-14-2011 – just finished adding West Jordan map

Nov-15-2011 – added Midvale and Kaysville

In the fourth quarter of the year the housing market slows and can cause some sellers to worry if their home hasn’t sold yet, but there is still time to sell.

People typically want to buy a home before the school year starts and the holiday season begins but that does not mean it is a bad time to sell.

In fact, there are some key factors that may help sell your home towards the back end of the year. First while there are fewer buyers, those that are out there tend to be more serious. With this in mind sellers should make the most of any showings, stage their home well and treat each one has a serious selling opportunity.

If you are a buyer, then the fourth quarter maybe an excellent time to look for a new home. Not only is there less competition from other buyers, those sellers that are out there are more serious about wanting to sell.

Because of the current historically low interest rates, this fourth quarter may well see more buyers than normal. Buyers maybe more eager to take advantage of these rates and lock into them while they can, even if it means a move during the holiday season.

With the expiration of the First Time Home Buyer Tax Credit at the end of April, we will be holding a FREE seminar to go through the Home Buying process. This class will be held twice at the Salt Lake Community College Miller Campus in Sandy on MARCH 23RD and MARCH 30th.

This exciting new class will be held in the Salt Lake Community College Professional Development Building and is being provided at no cost for Salt Lake area residents.

The campus is located at: 9750 South 300 West, Sandy, UT 84070

Here’s what will be covered in the class:

What loan programs are available to first time home buyers and what are their qualifying requirements?

What are the requirements and key dates for qualifying and claiming the $8000 First Time Home Buyer’s Tax Credit?

What are the credit requirements for conventional, FHA, and VA loans? How can I find out what my credit score is?

How do I go about qualifying for a loan?

What should I consider when looking for a new home?

How does the home buying process work. How do I make an offer, deposits, what are the key dates, home inspections, when can I move in?

Please note that SEATING IS LIMITED and because of this REGISTRATION IS REQUIRED!

If you would like further information about the class, please contact Joseph Gordon on 801-577-6304 or Trela Bird on 801-450-3535 or Tracie Peay on 801-891-5678.

If you wish to register then please complete the Salt Lake Area First Time Home Buyers Class Registration Form.

If you are looking to buy a condo, a recent change to FHA loan requirements may just have made your condo purchase more difficult.

In order to get a FHA/VA loan on a condo, the condo development must be FHA approved. If the development has not been approved, it needs to go through a certification process, which checks various criteria such as: must be 50 percent owner occupied, less than 25 percent commercial use, no more than 10% owned by one investor etc. This certification process takes anywhere in the region of 3 weeks to 3 months once the paperwork has been received.

What’s the problem you may ask, surely most the condo developments must have already been approved. Well yes they were, but a recent change means that any development that has not been approved in the last two years will have to reapply for certification. This means that most developments, with maybe the exception of some of the newer ones, will not be able use FHA loans until they have been recertified, which may take some time depending upon the efficiency of the HOA (HOA needs to provide numbers on owner occupancy etc.) and how long it takes the FHA to approve the certification.

This is not just a Salt Lake City Condo Market problem, all condo developments in the U.S. have had their approval status expire.

The only way around this issue is for the buyer to obtain a conventional loan instead of a FHA/VA loan, thus circumventing the approval process. The problem with this is that conventional loans require stricter credit qualifying criteria, and the down payment requirements are greater.

Read this Buying a Condo Just Became More Difficult article on our real estate blog.

Impending changes by the FHA (Federal Housing Authority) and HUD (Housing and Urban Development) could cost you thousands extra if you wait rather than taking the plunge and buy now.

These changes which are due to take effect between the March 31st expiration of the Federal Reserve Board’s mortgage backed securities purchase program (this is one of the main reasons that loan rates have been kept artificially low) and the April 30th Home Buyer Tax Credit deadline, could hit you where it hurts, in your pocket.
The first of these changes impacts the cost of up-front mortgage insurance for FHA guaranteed loans. The current rate of 1.75%, is set to increase to 2.25%. This would mean that a borrower would pay an extra $965 on a $200,000 loan, assuming a down payment of $7,000. The mortgage insurance is usually added to the end loan amount, so the additional cost will be added to your monthly loan payment.

The other change will reduce the amount of seller concessions that can be returned to the buyer from the seller, from 6% to 3% of the purchase price. Seller concessions are generally used by buyers to pay their closing costs, a reduction in the amount that can be claimed, may mean that you the buyer will have to bring more of your own money to the table.

This and other articles are available on our Salt Lake Real Estate blog. If you are interested in purchasing a new home why not try our maps based Salt Lake MLS search.

The homebuyer’s tax credit that was due to expire at the end of November has been extended to April 30th 2010. In addition to this a new tax credit has been introduced for current homeowners who want to sell their home and buy another.

The amount of tax credit for new homeowners remains the same ($8000), but there are some addition criteria that need to be met.

1. You must not have had an interest in a principle residence in the last three years.
2. The purchase contract must be in effect on or before the 30th of April 2010. You have until the 1st July 2010 to close.
3. Income limits of $125,000 for single people and $225,000 for Married couples (these amounts have been increased from the first tax credit). There is an additional $20,000 where the tax credit amount is phased out.
4. $800,000 limit on the purchase price (new rule).
5. The home cannot be purchased by a dependent (new rule).
6. The purchaser must attach documentation to their tax return (new rule).

The tax credit for current homeowners is $6500 ($3250 if you are married filing separately). In order to qualify for this you must have used the home sold as your principle residence for 5 of the last 8 years. Rules 2 through 6 must also be met in order to claim the $6500.

There is now a new Utah State incentive of $6000 dollars for home buyers, but it comes with limitations and in my opinion a major drawback. Unlike other incentives introduced at the federal level, the State incentive is limited to new construction homes. Now this is great if you are looking to buy a new home, but does nothing if you are currently trying to sell your own home. In fact I believe this will have a detrimental effect on the current housing market and here is why.

The reason the Utah housing market is currently suffering is because there are more sellers than buyers. This is a basic rule of economics, whenever there are more buyers than sellers then prices go up, and whenever there are more sellers than buyers, prices go down.

So what will the impact of the new incentive be? I believe it will make matters worse, instead of decreasing the inventory of homes for sale, it may well increase it. That is because when an existing home is sold it usually triggers a chain, person buys home A, whose owner buys home B, whose owner buys home C etc. So one sale, actually results in multiple sales. However, when someone buys a new home there is no chain. In fact it is worse than that, in the current climate builders are reluctant to build spec homes, so when someone buys a new home they have to build a home, which means a new home sale reduces the inventory by zero.

For those that are interested here are some details on the intentive:

The one thing I would say is that if you are interested, unless you close in the next couple of months you will miss out. There are only a limit number of grants available and they are running out fast.

In a recent study by the Utah Association of Realtors, when people were asked what are the top three challenges in the Utah Housing Market, the number one response was ‘lack of housing affordability’. Second was the ‘current state of the economy’ and third was ‘difficulty in getting a loan’.

The question is, is this perception of lack of housing affordability real, or is it more based on what people get used to, rather than actually facts. Let’s take gas prices as an example. When gas was $4.00 a gallon people believed that gas was outrageous, when it dropped to $3,00 it seemed cheap, and now it is back down to $1.50 or so, its really cheap. But gas prices are just back to the prices we saw 4 years ago. Therefore, what was the norm 4 years ago is now seen as really cheap.

Other interesting findings were that 69 percent said they believed ‘buying a home in Utah at this time was a good investment’ (this seems to contradict the housing affordability answer), and 61% of people said that ‘the Utah real estate market was healthier than in other states’.

Now that the real estate market has slowed, lease to buy options are now being accepted by some sellers. If you are having problems obtaining a loan due to poor credit and the tightening of the lending guidelines, a lease option maybe the answer to your problems.

A lease to buy option allows you the buyer to stay in a property while you sort out your finances and at a later date buy the property for a predetermined amount. For example, you agree with the seller to rent a property for $1200 per month for a year, after which you have the option to purchase the property for $190,000.

While this sounds good there are some potential problems that you should be aware of. First, you will need to come up with two deposits, a Lease Option deposit, and a renter’s security deposit. The Lease Option deposit is similar to an earnest money deposit, and is used show the seller that you are serious. The deposit is kept in a real estate brokerage account until such time that the due diligence period expires or you cancel the lease option contract, whichever comes first. If you cancel the lease option then the deposit is returned to you, if the due diligence period expires then the seller gets to keep to the money.

The other potential problem is finding a seller who is prepared to accept a lease option. While a slow market means you are more likely to find a seller offering a lease to buy option, they are still hard to come by. You have to find someone who does not need to sell their home in order to buy another one, and someone who is prepared to wait for a sale that may or may not occur.

You can read our Lease to Buy article to find out more information.

At the start of this month, Fannie Mae changed its policy regarding declining markets. Previously if you were in a declining market you had to put 10% down in order to obtain a loan. Now the policy has changed so that regardless of the state of the local real estate market buyers only need to put 5% down, i.e. they can obtain a 95% mortgage instead of a 90% mortgage. This change will obviously make it easier for first time buyers to enter the market and hopefully create an increased demand at the low end of the market.