April 15, 2021

The weather is heating up and so is Utah’s housing market. Sales are booming, prices are rising and the number of homes for sale has tumbled.

In April, the average number of active listings fell 72% from one year ago, according to preliminary data from UtahRealEstate.com. In other words, for every three to four homes that were on the market last year, this year there’s only one.

With an unprecedented number of buyers actively searching for homes, it means there’s likely going to be intense competition for every home that goes on the market.

It’s creating a situation where buyers are making aggressive offers. For example, some buyers are agreeing to purchase real estate without contingencies. Others are agreeing to forfeit their earnest money as soon as the seller accepts their offer, and some are offering to pay cash above the appraised value.

These aggressive offers create risk for the buyer. Before you decide to use one of these strategies, make sure you understand the associated pitfalls.

Making earnest money non-refundable

In order to make their offers look more attractive, some buyers are choosing to forfeit their earnest money as soon as the seller accepts the offer. That means if they decide to back out of the purchase for any reason at any time, they will not get their money back.

One risk of doing this is that you might discover during your inspections that there is damage to the home that is significant enough that you no longer want to buy the house. If the earnest money is non-refundable, you will lose your deposit should you walk away from the deal.

For buyers who are putting down thousands of dollars, the risk may be substantial. To help minimize your risk, here are some tips:

  • Avoid making earnest money non-refundable if you’re making on offer on a house that you’ve never visited in person.
  • Ask to see the seller disclosures before you make your offer.
  • Make it clear in the contract that the earnest money will be returned if the seller does not follow through with their contractual obligations.
  • Specify in the contract the circumstances when the earnest money would be returned.
  • Make sure you are truly committed to buying the house and will have the financial means to do so.

Waiving contingencies

Some buyers are choosing to waive the due diligence condition, appraisal condition and financing condition that are found in the standard Real Estate Purchase Contract.

Waiving these conditions is risky because you’re offering to purchase a property without inspecting it, without knowing how much it’s worth and without the opportunity to know if you’ll get financing.

If you are thinking about using these strategies, here are some tips:

  • Clarify that you still have the right to cancel even if you forfeit your earnest money.
  • Clarify that you still have the right to inspect the property and get an appraisal on the property.

Paying above appraised value

Some buyers will offer to pay above the house’s appraised value. While this strategy will help your offer stand out, it’s important to clearly specify what you’re offering to do.

Here are a few tips:

  • Clearly specify a purchase price and an appraisal floor. An appraisal floor is the lowest appraisal value you’re willing to accept. Make sure you can cancel if the appraisal comes in lower than this amount.
  • Make sure you have cash to pay the difference between the appraisal floor and the amount you’re willing to pay above that floor.
  • Make sure you are comfortable paying more for a property than it may be worth.

When making aggressive real estate offers, there are many additional risks and risk mitigation measures not included in this article. Make sure you a working with an experienced Realtor who can help guide you through the pitfalls of this current market. Use our directory to find a local Realtor.

Report: Staged homes sell faster and for more

April 8, 2021

Even though it’s a hot market, it still pays for sellers to adequately prepare their homes before placing a for-sale sign in the yard. That’s according to a new study that finds that home staging — the process of cleaning and decluttering a home to help it appeal to the largest number of buyers — helps homes sell faster and for more money.

On Tuesday, The National Association of Realtors (NAR) released the 2021 Profile of Home Staging. The report included key findings such as 82% of buyers’ agents saying home staging made it easier for a buyer to visualize the property as a future home.

Staging also appears to increase the amount buyers are willing to spend for the property. Twenty-three percent of agents said home staging raised the dollar value offered between 1-5% compared to similar homes on the market that hadn’t been staged. Twenty-six percent of buyers’ agents and 29% of sellers’ agents said it increased the value more than 5%.

“Staging a home helps consumers see the full potential of a given space or property,” said Jessica Lautz, NAR’s vice president of demographics and behavioral insights. “It features the home in its best light and helps would-be buyers envision its various possibilities.”

Among sellers’ agents, more than half said staging decreases the time a home is on the market, with 31% saying it greatly decreases sales time.

The survey also examined the impact of real estate TV programming on buyers’ expectations about the purchase process. The findings show that sellers who decide not to stage may risk disappointing buyers who assume the properties will look like those seen on television.

In fact, 63% of agents said their buyers indicated they believed homes should look like they were staged on TV shows. About 68% of agents said buyers were disappointed by how homes looked compared to those they saw on TV shows.

 Home staging tips

Because home staging plays such an important role in shaping buyers’ perceptions, it’s important for sellers to carefully consider their staging options.

As a seller, you can stage your house on your own, hire a professional stager or work with a Realtor who also provides staging services.

Whichever option you choose, you’ll want to take the following steps (as ranked in order of the most commonly recommended to the least commonly recommended):

  • Declutter the home (93%)
  • Clean the entire home (85%)
  • Remove pets during showings (81%)
  • Improve curb appeal (78%)
  • Clean carpets (73%)
  • Take professional photos (73%)
  • Make minor repairs (69%)
  • Depersonalize the home (68%)
  • Paint walls (63%)
  • Touch up paint (58%)
  • Landscape outdoor area (55%)
  • Grout (35%)

When cleaning, remember this should be a deep clean of the entire home, including scrubbing walls and baseboards and getting rid of any unpleasant odors. Also, make sure to clear out anything that is cluttering the room and making it look smaller. This includes removing excess furniture, papers, décor, items in closets, etc.

You’ll also want to place out of sight anything that personalizes the home. This includes photos, religious items, clothes and toiletries. When you do this, it makes it easier for potential buyers to imagine the space as their own.

If you have limited time and budget, consider staging only some of the rooms. For example, the survey found that the most important rooms to prepare for buyers are the living room, main bedroom, kitchen and dining room.

To learn more about home staging and what it takes to get your house ready to sell, contact a local Realtor.

April is Fair Housing Month

Thursday, April 1, 2021

Each April, the country commemorates the passage and signing of the 1968 federal Fair Housing Act, which makes it illegal to discriminate in the sale, lease or rental of housing. Lyndon B. Johnson signed the act to ensure all Americans have equal access to the housing of their choice.

As we commemorate this historic legislation that protects your right to live where you want, it is a great time to review the protections you have under the Fair Housing Act. Here’s a closer look at fair housing today.

What is fair housing?

According to the U.S. Department of Housing and Urban Development (HUD), “The Fair Housing Act protects people from discrimination when they are renting or buying a home, getting a mortgage, seeking housing assistance or engaging in other housing-related activities.”

The law prohibits discrimination on the basis of race, color, religion, sex, national origin, disability or familial status (including children under the age of 18 living with parents or legal custodians, pregnant women and people securing custody of children under the age of 18), according to HUD. These characteristics are known as protected classes.

In addition to the above protected classes, Utah also prohibits housing discrimination based on source of income, sexual orientation or gender identity.

In the sale or rental of housing, the following are some of the activities that are illegal based on a person’s protected class, according to HUD:

Making housing unavailable

  • Setting different terms, conditions, prices or privileges for the sale or rental of a dwelling
  • Providing different housing services or facilities
  • Falsely denying that housing is available for inspection, sale or rental
  • Publishing any advertisement with respect to the sale or rental of housing that indicates a preference, limitation or discrimination
  • Using different qualification criteria
  • Discouraging the purchase or rental of a dwelling
  • Assigning a person to a particular building or neighborhood
  • Persuading homeowners to sell their houses at bargain prices by suggesting that people of a particular protected class have moved or will move into the area
  • Denying anyone access to a facility or service related to the sale or rental of housing

While most housing is covered, there are a few exceptions, so make sure to visit HUD.gov and LaborCommission.utah.gov for more information about what constitutes housing discrimination.

What should I do if I suspect a fair housing violation?

The Utah Labor Commission’s Antidiscrimination and Labor Division enforces fair housing laws in Utah. Visit LaborCommission.utah.gov and search for Fair Housing to learn more and find the Intake Questionnaire to start the complaint process.

Complaints submitted to the Utah Labor Commission are also automatically filed with the U.S. Department of Housing and Urban Development.

What are Realtors doing to promote fair housing?

Realtors recognize the significance of the Fair Housing Act and are committed to upholding fair housing laws and providing equal professional services for all.

Along with ongoing efforts to promote fair housing, National Association of Realtors President Charlie Oppler has challenged Realtors to complete a Fair Housing Challenge. This challenge includes participation in a simulation about fair housing and completion of an implicit bias training. Realtors also have the opportunity to earn the At Home with Diversity Certification, which provides training on fair housing laws and information about working with people in an increasingly multicultural real estate market.

The National Association of Realtors is also sponsoring a special event on April 15 titled “The Past, Present, and Future of Fair Housing.”

To learn more about Realtors’ efforts to support fair housing, visit NAR.realtor/fair-housing/fair-housing-month.