Buying a Home in Salt Lake City, UT

I don't represent Sellers, so why am I writing about this? Almost all Buyers will someday be Sellers and almost all Sellers buy after they sell. My clients may as well understand that what is true on one side of a transaction usually has its parallel on the other.

Just as Buyers often sign away rights and protections when entering a Buyer-Broker Agreement, Sellers are almost always asked to sign away their right to full representation when signing a Listing Agreement. Once again, Sellers, just like Buyers have a choice.

The law often requires the disclosure of this choice, but it is usually not presented as a choice when explained to the real estate consumer (if explained at all).

In a Listing presentation a Seller will often hear something more like:

"And your initials here allow me to find a Buyer for your property and help with the paperwork in order to get your home sold." (point and move on...)

rather than:

"By initialing here you are agreeing to Limited Agency. If I find a Buyer and I want to simultaneously work for that Buyer and you as the Seller, there are inherant conflicts of interest. We will no longer be working exclusively for you on your behalf. We will also be attempting to work for the Buyer. Initialling here is your acknowledgement that you understand that you will no longer be receiving exclusive representation and the full array of agency level service and authorizes us to change our agency relationship from that of a full Agent, with full fiduciary duties, representing only you, to that of a Limited Agent, with limited levels of fiduciary duties, no longer working solely on your behalf. For example, at the full level of agency, if I learn information from Buyers that strengthens your bargaining position in negotiations, I am legally obligated to disclose that information to you. At the limited agency level, I am obligated to NOT disclose that information to you because I also represent the Buyer. Would you like to retain full representation, or allow me to become a limited agent? It will cost you the same."

This is just one of the ways that you effectively lose full representation when Buying OR Selling a home. It's called "Dual-Agency." Agents prefer to use the more consumer-friendly term "Limited Agency" if it is mentioned at all.

If you don't remember hearing about "Dual Agency" when you bought or sold a home, that isn't surprising.

According to "research by the National Association of Realtors, just 30 percent of all buyers in 2005 received disclosures about representation from their agents at their first meeting. Nearly half of all first-time buyers either received no disclosures during the sales transaction or were unaware of whether they did or did not." - Kenneth Harney, Agents Falling Short On Disclosure, Washington Post, Saturday, March 18, 2006; Page F01

Homebuyer Representation, Inc. is an Exclusive Buyer Brokerage serving Salt Lake and surrounding areas. We do not list homes and we don't represent Sellers. We work for you on the Buying side of the transaction at all times.

For more information, just call us at (801) 969-8989 or contact us via the link on this page.

Suppose you find a home of interest and the Listing Agent tells you they will reduce the price of the home by 3% if you choose not to use the Buyer's Agent you have spoken to, but have not yet signed a written agreement with.

What have you benefitted if you "save" 3%, but still end up over-paying for the home by 5%? Absolutely nothing. You have, in reality, lost.

Listing Agents Represent the Seller. When you need to sell your home, hire one. When you need to Buy a home, hire a Buyer's Agent who will work solely on YOUR behalf.

There are many Buyers who may not even know they overpaid for their home because the comparables they were shown by a Seller or a Listing Agent justified the higher price.

Remember who the Listing Agent represents. Comparable sales provided by a Listing Agent should always be verified by an independent agent, preferrably your Exclusive Buyer's Agent.

I have seen comparables used for non-similar properties, sometimes miles away, when there are 2 or 3 of the same floor plan, in the same neighborhood that have sold within the past 30-60 days.

Make sure you hire an agent who is legally obligated to protect your rights as a Buyer. To get you the best price and terms, not the Seller.

Homebuyer Representation, Inc. is an Exclusive Buyer Brokerage serving Salt Lake and surrounding areas. We do not list homes and we don't represent Sellers. We work for you on the Buying side of the transaction at all times.

For more information, just call us at (801) 969-8989 or contact us via the link on this page.

When selecting a Buyer's Agent, you will often be asked to sign an "Exclusive Buyer-Brokerage Agreement" (or something of a similar title). This title does not (necessarily) mean that the agent you are hiring will be an "Exclusive Buyer's Agent," working solely on your behalf, on any home you wish to buy. The title (and the document) means that you are exclusively going to use this Broker for your home purchase.

At the signing of this agreement, many Buyers sign away specific beneficial and legal rights, often without even knowing it.

Utah's Exclusive Buyer-Brokerage Agreement includes an option to Allow or Dis-allow your Agent to act as a Limited or Dual Agent. Many agents will gloss over this section of the agreement by saying something such as: "This is the part where it says you will allow me to help you buy a home listed by me or my company. Just initial here."

In reality, by agreeing to Limited or Dual Agency you give up certain protections that you would not give up if you directed the Agent and Broker to work exclusively on your behalf.

Allowing your agent or broker to be a Dual-Agent is legal in Utah, but you should know that it is a choice and you should be aware of the implications of that choice.

When you find yourself in a transaction where your protections, services and benefits are limited, it can be disconcerting. If you have signed a legal document allowing your Agent or Broker to act as a Dual, or Limited Agent, it can be downright frustrating. Where can you go for help? Nowhere. You have already designated that agent or broker as your Buyer's Agent and allowed them to offer you limited levels of service as part of your agreement.

When a Buyer works with the Listing agent, they are not getting the highest level of service or protection available:

• The Listing Agent's job primarily was to sell that home at the highest price.
• A Dual-Agent cannot negotiate on the Buyer's behalf.
• Any information that was disclosed to the Listing Agent and therefore to the Seller prior to the Dual Agency being entered into (say, at an open house) can and will be used against the Buyer.
• Once the agent becomes a facilitator, the Buyer loses key protections of having an exclusive agent - In Utah, the agent cannot even suggest an offer price to the Buyer.

You no longer have an advocate, you have someone who delivers paperwork between you and the Seller.

As a Buyer you can lose in many ways. The obvious are:

• Price
• Terms
  and
• Protection

Signing a Buyer-Broker Agreement establishes certain duties and legal obligations that the agent and broker are responsible for. As required by law, we ask all clients to sign an Exclusive Buyer-Brokerage Agreement, but we do not ask them to authorize us to practice Limited or Dual-Agency.

If you want the highest level of protection, regardless of the home you choose to buy, at no additional cost, MAKE IT CLEAR that you DO NOT authorize the Agent (or Broker) to diminish your rights, benefits and protections by turning you from a client that is owed full fiduciary duties into a client that receives anything less via a dual-agency relationship.

Should the Broker really receive the same compensation when they lower the level of services and benefits they will provide you? Shouldn't every Buyer have the right and ability to choose to be fully represented in their home purchase?

Buyers do have the right and ability to choose to be fully represented in their home purchase, unless they sign that right away by agreeing to Limited or Dual Agency.

By hiring an Exclusive Buyer's Agency, you are hiring a Brokerage that does not list homes. When you sign a Buyer-Brokerage Agreement with our company you will guarantee the highest levels of service and representation. You will not be asked to forfeit those rights and protections.

Homebuyer Representation, Inc. is an Exclusive Buyer Brokerage serving Salt Lake and surrounding areas. We do not list homes and don't represent Sellers. We work for you on the Buying side of the transaction at all times.

For more information, just call us at (801) 969-8989 or contact us via the link on this page.

Are you a sucker? 

MSN's Jim Cramer says: "If you don't buy a house in 6-18 months you're a sucker." I won't go so far as that, but in our market, if you are waiting to buy a home, you are likely going to pay much more for that home in 6-18 months than you are able to save by not buying today. 

Click this link to watch the video clip:

http://tinyurl.com/2t3jox

He seems to be saying that because the economy is so good in other aspects (employment, etc.) - people who do not yet own homes should take advantage of the drop in home prices and buy now while the market is low. (Anyone ever heard the phrase: "Buy Low - Sell High"?)

Homes in Salt Lake - NOT on Sale

I would not say that the Salt Lake real estate market has homes on sale at a discount. In fact, many of the homes listed for sale today are overpriced in our market. 2/3rds of all listings in the 3rd quarter of 2007 did not sell. Still, those that do sell are selling for more than they would have a year ago, which means that home prices are still rising.

The Salt Lake Real Estate Market has indeed slowed

In spite of the fact that home prices are still rising for homes that do sell, the Salt Lake Real Estate market has slowed in more than one way:

• The number of units sold is declining: Less homes are being sold. Fewer Buyers are Buying homes.
• The appreciation rate for sold homes has slowed from highs last year of 15-25% to more nominal rates of 8-15% (At the end of 3rd quarter 2007 - I believe it has slowed even more to between 7 and 10%)
• Homes that do sell are on the market an average of 1 week longer.

It is still a good time to buy a home in Salt Lake 

All of this actually makes it a good time to Buy:

• You have many options as far as what to buy
• Seller's are more motivated to lower their price or offer more favorable terms (because there are fewer Buyers),
  and, unlike some national markets
• Appreciation on your investment is still positive (assuming you purchase at or below fair market value).

How to protect yourself as a home buyer in Salt Lake 

To make sure your best interest is being protected and you are being fully represented, look for an Exclusive Buyer's Agent to help you with your home purchase in the Salt Lake Area. We can help you evalulate the true worth of a property in today's marketplace.

Homebuyer Representation, Inc. is an Exclusive Buyer Brokerage serving Salt Lake and surrounding areas. We do not list homes and don't represent Sellers. We work for you on the Buying side of the transaction at all times.

For more information, just contact us at (801) 969-8989 or contact us via the link on this page.

If you are considering a home purchase in the Salt Lake City, Utah area, you may be getting mixed signals as to whether you should buy a home now, or wait another year.

A recent article Forbes Magazine stated, "In Salt Lake City, the median home sale price for the third quarter this year rose 14% over the same time in 2006, according to data released today by the National Association of Realtors (NAR). That's the biggest increase of the country's 50 largest metros measured." (November 21, 2007)

I would suggest that since September the appreciation rate has slowed to about 7-10%. We will know for sure on January 1st, 2008, but my guess is that it will fall somewhere in that range. I would also suggest that it will likely continue to slow until it returns to the 3-5% range where it historically sits. Being on the tail end of the housing booms is a desirable position from my viewpoint.

Currently I am still seeing many listings at 10, 20, even 30 and 40 Thousand Dollars TOO HIGH. These listings are part of the 2/3rds of the listings that are not selling in our market. That's right, two-thirds of all listings did not sell in the third quarter of this year (2007). Recently we have walked away from negotiations when Sellers have been unrealistic with their pricing. Although it has been occurring more frequently, there are still homes that are priced at market value, or close enough to it to come to reasonable terms.

What does all this mean? Is it a good time to buy or isn't it?

Remember, even though many listings are overpriced substantially, one-third of residential home listings did sell last quarter and the median price of those homes that sold was 14% higher than it was in 2006.

The bottom line is this: Home prices in the Salt Lake area will not rise by 20% over the next year, but it is very likely that they will rise somewhere between 3 and 8% between now and December of 2008. That means that buying the same home then as opposed to now will cost you somewhere between $9,000 and $32,000 more than buying it today. In terms of monthly payments, at 6% interest, that same house will cost you $45 to $160 more per month in one year than it would cost you if you bought that home today. That is $45 to $160 per month for the life of your loan.

Because over half of all listings are currently overpriced, it is more important than ever to use an agent who will work on your side of the transaction. As an Exclusive Buyer's Agent, my job is to get the lowest price and terms for you, the Buyer. Most real estate agents work for the Seller. We work for Buyers and Buyers only.

For more information, just call us at (801) 969-8989 or contact us via the link on this page.

Homebuyer Representation, Inc. is a Real Estate Brokerage that services Salt Lake City, Utah and surrounding areas. Agents are Exclusive Buyer Agents (EBAs) and represent BUYERS ONLY. For Free Reports or a Free Consultation, contact Homebuyer Representation at (801) 969-8989 or click the highlighted links in this paragraph.

©2009 Homebuyer Representation, Inc.

The market in Salt Lake is certainly slowing down, but for all our sakes, that is a good thing. Last year's appreciation rates of 20-25% were great for all homeowners and created a bit of a buying-frenzy that had many buyers involved in multiple-offer transactions and many Builders and Sellers seemed to be raising list prices on a weekly basis. Those days are gone, but those who own homes and those who are considering a home purchase should be welcoming the current slowdown in the market because it is this very slowdown that will protect your investment.

Being late to the housing boom is great because we get the benefits of the boom for what seems like a longer time, yet we also get the warning signs from other markets that tell us that the end is near and it is time to calm things down. If our marketplace were to have ignored those warning signs and kept raising the values of our homes by 20-25% this year, we would most certainly be due for the necessary correction and depreciation that has hit many other markets nationally over the past year.

As it is, it would appear to me that we are making the necessary corrections in advance by slowing the appreciation back to sustainable levels, thus avoiding a decrease in housing values.

If you haven't bought a home yet, but are considering it, make sure you use an Exclusive Buyer's Agent who will represent your best interests in the transaction, and not the Sellers.

My observation of Salt Lake's Real Estate market over the past 10-15 years has been that it tends to chug along at a very moderate appreciation rate in the range of 3-5%. There are times when it is slightly better than this and times when it is slightly worse. But, generally, that has been my observation. It is because of this very conservative appreciation that Salt Lake became one of the most undervalued markets in the country in 2005. Prices have truly skyrocketed over the 3 years since, but recently the number of sales are down and the appreciation rate has slowed.

Still, the homes that are selling are selling for more than they would have a year ago by about 7-14%. If you are considering buying a home in the Salt Lake area within the next 6 months, make sure you use an Exclusive Buyer's Agent who will help you evaluate the actual market value of homes and not use inflated values to get the Seller the most money or to get a higher commission.