Hidden Costs for New Homeowners

When the time comes for you to buy a home, new homeowners need to understand that there are ‘hidden’ costs and fees when you are ready to sign on that dotted line. We are calling them ‘hidden’ because they are not included in the actual price of the home, these costs are obtained through the buying process and at the time of closing.

Here is a breakdown of those ‘hidden’ costs.

 

Home Inspection

Although this is an optional expense, it does protect you from purchasing a home that may have a lot of issues that may not be obvious. These can include things like mold, problems with the heating or cooling system or water leaks. A rough estimate for a home inspection is $300-$500. Keep in mind, if you end up not buying the house after the inspection, you are still obligated to pay the fee.

Appraisal

This is a necessary fee that asses the home and property so your lender knows that you are paying what the property is worth. There are times when a seller may have to adjust their asking price due to an appraisal coming in under the amount of asking. Appraisal fees can run $200-$500.

Loan Application Fees

These fees start the entire loan process. A lender will need to run your credit report to ensure you can qualify for a home loan. That fee is included in the application fees. These typically run $75-$300.

Title Services

Title services include running a title search on a property, paying the notary to notarize all the documents that you sign, and the required government filing fees. It is important to get a detailed invoice for these fees so you are fully aware of what you are paying for. These fees run $150-$400.

Origination Fees

These fees go to the lender for creation of the loan. These are paid upfront and include processing the loan application. the underwriting process and the actual funding of the loan. These fees are usually based on a percentage of the loan amount and range from 0.5%-1.5%.

Private Mortgage Insurance (PMI)

If you put less than 20% down on your new home, the lender will require you to purchase PMI. This protects the lender from losing money in the event of a foreclosure. This fee can be re-assessed at such time as you have equity in your home. This fee is based on a percentage of the original loan amount as well.

 

Disclaimer- All dollar amounts and percentages are estimates. 

 

Xeriscaping in Utah

Should you be Xeriscaping in Utah?  Here are a few things to consider!

Let’s face it, Salt Lake City is a desert.  A high desert, but still with our annual precipitation rates, we 100% qualify as a desert. Living in the desert, such as we do in Utah, can make keeping a green grass and fully landscaped yard a spendy endeavor.  Not only that, but it is not terribly environmentally friendly.

According to the WSS Water Usage table: “Running a typical sprinkler from a standard garden hose (5/8”) for one hour uses about 1,020 gallons of water; if you run it three times per week, that is about 12,240 gallons per month.”  When it is 90+ degrees out there and you have to water every day to keep your lawn alive, well… it adds up.

That is why we are seeing more and more homeowners lean towards xeriscaping in Utah.  Just what IS xeriscaping?  Xeriscaping is a way of landscaping that uses drought-resistant plants, natural elements, and water-wise features to reduces the need to water your space.

Here are some of the benefits of xeriscaping in Utah:

 

  1. You will DRASTICALLY reduce the amount of water you use in your yard.  This is better for the environment and much more affordable for you.
  2. Water-wise plants can be quite beautiful
  3. No weekly mowing, trimming and weeding your lawn (though be careful in thinking that xeriscaping means “maintenance free,” it does take time and care and you’ll probably still have to weed).
  4. Xeriscaping with native plants reduces the need for fertilizers and pesticides.
  5. Your yard isn’t going to die if you go out of town for a week and forget to have someone water

 

Here are our top tips for xeriscaping in Utah:

 

  1. Using native plants for the area will give you a could chance of success, these plants have already adapted to the elements and climate.
  2. Also, due to their deep root system, using native plants when xeriscaping in Utah, means they can survive with the little water they capture from rainwater runoff. These plants are also resistant to freezing, common diseases, pests, and herbivores.
  3. Having some form of irrigation may be necessary depending on your layout and plant selection.  This can be natural irrigation channels that are built into your xeriscaping layout.
  4. Rain barrels may be a great option to collect rain run-off and distribute in your yard or to your house plants. (Check your city ordinances, since rain barrel collection isn’t allowed everywhere)
  5. Don’t think you have to plant everywhere – you can use natural elements like stone, sand, gravel, and wood to create a beautiful landscape.
  6. Weeds can be aggressive when you take out a lawn – so be sure to be aggressive and ruthless back.

 

Our BEST resources for xeriscaping in Utah:

 

  • Contact Salt Lake City Public Utilities, rain barrels are for sale for $68. The barrels have a mosquito screen, threaded spigot, two ¾-inch overflow valves, and 60-gallon capacity.  A GREAT deal.
  • Find a list of native plants for Utah here.
  • Find information on how to design a Wildlife Garden here.

Choosing Investment Properties in Utah

Don’t let the fear of being a landlord keep you from looking into purchasing investment properties. In fact, investment properties can generate great passive income and there are several options for managing the property that can make you a passive participant.

Consider taking a landlord

If you do not think you can manage your investment by yourself, be sure to calculate property management fees into your strategy. Be sure you learn about fair housing laws and other laws that pertain to the property you are considering purchasing.

Consider taking a landlord or Property Management class to learn how to select tenants, screen them to be sure they qualify, etc.

Be aware

Be aware that many condo complexes have rental restrictions. You will make sure you have covered all these before proceeding.

If you choose a home that needs a lot of repairs you will get more phone calls from the tenants, and you may have more liability if protections like smoke detectors, safe electrical systems, etc are not in the home.

Choose your strategy

Choose your strategy. Generally, you get good cash flow or better appreciation. Homes in suburbs of SLC tend to cash flow better because of lower price points but do not go up in value as much as areas like downtown, sugar house, near universities, etc.

If you limit or deny pets, you will limit your pool of potential renters. If you allow pets, be sure to get pet deposits and pet rent.

Please Note: We’re continuing to post about local businesses, events, and area attractions; however, things often change due to COVID-19 restrictions.  So please, double-check before you visit any of our recommended spots to confirm availability, accessibility, or any restrictions.  Stay safe. Be well. And support Local! Thank you. 

More information and tips can be found here:

Why You Should Work With a Realtor

Summer Housing Trends

How To Find and Work With a Property Manager

Tiny Houses

One of the biggest growing trends in the past decade  is the tiny house trend that is that has caught hold across the U.S. today, but has it caught in Utah? You can see it in nearly every home-related television show now-a-days, but what exactly is a “tiny home” and the lifestyle that comes with it? A Tiny home is defined as 100 to 400 square feet. Downsizing and living sparsely obviously come with the smaller space, but nicely enough it comes with a smaller price tag. One of the greatest appeals to tiny living is the lure of living debt free and still owning a place to call home.

“Debt free” has more than a nice ring to it; it’s got a near mesmerizing chime. But living tiny is just as it sounds, hard. Know the challenges that come with tiny. It’s not just the fact that you have to try and fit your entire life into 400 or fewer square feet. Its where do you plant your tiny roots? Many land parcels and subdivisions won’t allow for homes to be built less than 1000 square feet or park RVs fulltime (which the mobile tiny homes usually get referred to as). Do you have a foundation or wheels, or even how do the utilities work? These and many other things can be eccentric or just downright tricky, but the benefits are definitely there. According to thetinylife.com 68% of tiny homeowners don’t have a mortgage to pay every month, while 55% have more savings in the bank than the average American, and 89% of the tiny life community has less credit card debt than the average American. Tiny house living isn’t for everyone though.

Being sold direct from the builder and riding the gray area of zoning laws leaves tiny home finding their plots in more rural communities instead of the urban scene. In general, tiny housing is a lifestyle born out of necessity; a necessity that Utah doesn’t have. We are very much still growing. In 2016 Wasatch Front was recognized, by the National Association of Realtors, as home to more mansions than any other U.S. city. In 2017 Utah has been repeatedly been chosen among the top markets in the U.S. in Forbes, Realtor,  Tiny housing may catch along the Front soon, so don’t fret, but for now the tradition of larger families and backyard basketball courts keeps Utah housing on the larger end of the scale.

If you would like to learn more about tiny living in your community or just want to explore your options reach out to us here.