10 Steps for Buying a Park City Home

Buying Process - 7 Minute Read

2/14/2023(Updated 7/8/2023)

Buying a house is an exciting and complex process, and with the right preparation and knowledge, it will be a life changing and positive experience. This article will guide you through the 10 essential steps of buying a Park City property, from deciding on your buying objectives to closing the deal. We'll cover important considerations such as selecting an agent, getting preapproved for a loan, submitting an offer, negotiating the terms, inspections, appraisals, and closing. With these tips, you can feel confident and in control as you embark on the journey to buying your dream Park City home.

How To Buy Your House: 10 Steps

1. Identify Your Objectives
2. Select a Park City Agent
3. Get Preapproved
4. Home Search
5. Make an Offer
6. Negotiation
7. Due Diligence
8. Secure Financing
9. Settlement and Closing
10. Upgrades and Move

Identify Your Objectives

When it comes to buying a house in Park City, it's important to have clear objectives in mind to ensure a successful purchase. Here are some key considerations to take into account when choosing your objectives:

Budget

Determine how much you are willing and able to spend on your new home. Consider whether you will need a loan to cover the costs.

Location

Think about the area you want to live in. Do you want your kids to attend specific public schools, want to be walking distance to Main Street in Old Town, conveniently located for a Salt Lake City commute, live in an amenity rich community, or own a ski in/out property? You can get familiar with the different areas of Park City at our Neighborhood Guide.

Use of the house

Decide whether the house will be your primary residence, a source of rental income, or a second home. This will help determine what type of property to look for and what features to prioritize.

Home condition

Consider whether you want a brand-new, move-in ready home with the latest in styling, or if you're willing to take on a fixer-upper for a better value. This will depend on your skill level and availability to do renovations.

Select an Agent

A professional real estate agent can be a valuable asset to guide buyers through the Park City home-buying process. Typically, sellers pay the buyer's agent commission, which means that utilizing an agent is a cost-effective option for buyers. Here are some specific ways in which a buyer's agent can assist:

Market Insights

Identify home value trends, new developments, buyer demand, and the overall state of the market. A top agent will know about upcoming developments, zoning changes, tax changes to pay for bonds, and more.

Offer Price

Assist you in coming up with an initial offer price. Slope Style Realty assists our clients with in depth pricing models, market activity statistics, and market trends. A top agent will actively engage the selling agent to gain an understanding of the buyer's motivations and desires, potential comptetitve offers, and relay why you love the home.

Negotiating

Real estate negotiations can be tense and emotional. A top agent will expertly work with the seller's agent to calm the situation, logically explain your position, and motivate the seller to continue the convesation.

Local Knowledge

A great Park City agent will know about upcoming HOA special assessments, transfer fees, nightly rental regulations, building regulations and limitations, trail access points, lawsuits, and resort expansion plans.

Professional Recommendations

Offer recommendations for trusted lenders, attorneys, contractors, or other vendors. It's important to know that Slope Style Realty never takes referral fees from 3rd party vendors our clients select for services.

Experience

Simplify the process by handling unexpected problems, staying on top of due dates, managing negotiations, and overseeing paperwork. An agent must protect your earnest money by ensuring the proper steps are performed promptly during due diligence and financing so you can make a go/no-go decision prior to cancellation dates.

Get Preapproved

To determine your home buying budget, it is recommended that you seek pre-approval from a lender, unless you are purchasing the home with all cash. Pre-approval provides an strong signal on your ability to secure a mortgage, which can be advantageous to sellers. It is important to note that pre-approval is preferred over pre-qualification by sellers. Your agent can recommend lenders who offer competitive rates and products, and with whom they have had successful past experiences.

To obtain pre-approval from a lender, the following financial factors will be evaluated to determine your debt-to-income ratio and overall financial health:

• Income statements, including W2s, 1099s, rental income, and tax returns
• Assets, such as bank statements and retirement accounts
• Debts, including monthly expenses such as student loans, credit cards, and other mortgages
• Records of bankruptcies and foreclosures
• Current payments, such as rent, child support, alimony, and any down payment gifts.

Upon receiving pre-approval from a lender, you will receive a pre-approval letter which not only informs you of your borrowing capacity. Most Park City seller want to see proof of funds for cash buyers or pre-approval letters when submitting a Real Estate Purchase Contract (REPC).

It is important to note that you are not obligated to use the lender who provided your pre-approval to finance your loan. We recommend that you obtain estimates from multiple lenders and compare interest rates and fees prior to selecting a mortgage provider.

Finally, your debt-to-income ratio will undergo another evaluation prior to closing. As such, acquiring new debt can potentially limit the total loan amount that will be available to you during financing.

Home Search

You are now postioned to submit serious offers for your Park City home.

Your agent will work with you to integrate your home buying objectives and preferences to identify properties that match your specific criteria, such as location, cost, type, and condition. A great agent will scour the Multiple Listing Service (MLS) for properties matching your criteria and send them to you using text or email. This will reduce unwanted listings generated by automated queries entered into services. They may also send you properties that may push the boundaries on your stated desires because of some special feature or unique selling point that could be a perfect fit for you.

In addition to relying on your agent, you should actively use online real estate websites such as Zillow and Redfin to search for properties that you find intriguing. By keeping your agent informed about the properties you are interested in, they can provide you with detailed insights about the properties and help you better understand the reality behind the sales pitch.

Once you have found some promising properties, your agent can help you set up in-person or virtual showings. For out-of-town clients, we often video or screen-share properties for initial showings to help narrow down the options and make the most of your time when you visit in person. With the help of your agent, you'll be well on your way to finding the perfect home that meets all your needs and preferences.

Make an Offer

Once you've found a property that you like, your agent will guide you through the next steps, which typically involves filling out a Real Estate Purchase Contract (REPC). In the case of new construction, the developer may provide a custom contract that outlines the terms and conditions of the sale. Regardless of the type of contract, the agreement will cover all essential details that are pertinent to the transaction.

Offer Price

When making an offer on a property, it's important to be well-informed and strategic to ensure you get a fair price. Your agent can provide valuable insights on the Park City real estate market and use data on comparable sales, fees, and restrictions to help you determine the offer price. Additionally, your agent can engage with the seller's agent to gather intelligence on the seller's motivations and preferred negotiation style. By positioning your offer to align with the seller's goals and demonstrating a willingness to compromise, you may be able to secure a better deal. Trust in the expertise of your agent to make an informed and competitive offer.

Due Diligence

When conducting due diligence on a property, it's important to have a professional inspector assess the property's condition. Your agent can help you hire a qualified inspector and coordinate the inspection. The inspector will prepare a detailed report on the property's condition, identifying any issues that may need to be addressed. This information can be used to request repairs or negotiate on the price. The Due Diligence Deadline will provide a timeframe for completing the inspection and reviewing the report. Your agent can help you understand the inspection report and provide guidance on your options if any issues are identified. By relying on the expertise of a professional inspector, you can make an informed decision and ensure that any potential issues are addressed before closing the deal.

Financing and Appraisal

The Financing and Appraisal Deadline outlines the timeframe for obtaining a mortgage or other financing options to purchase the house. This deadline is typically 30 days or more weeks following contract acceptance, providing enough time for you to complete the necessary paperwork and secure funding. If you are unable to obtain financing by the deadline, you have the right to cancel the contract without penalty. This section is typically waived for cash deals, which can be more attractive to sellers because they eliminate the risk of the buyer being unable to obtain financing. Your agent can help you navigate the financing process, providing guidance and recommendations to ensure that you can secure the funding you need to close the deal.

Earnest money

Earnest money is a deposit made as part of an offer to purchase a property. Your agent can provide guidance on the appropriate amount of earnest money to deposit. A higher earnest money deposit can be a signal to the seller that you are serious about the purchase and have the ability to perform. The deposit is maintained at your agent's brokerage or title, and a normal offer specifies that you get your deposit back if you cancel before the latter of the Due Diligence Deadline and Financing and Appraisal Deadline. However, you can elect to receive your earnest money back plus an additional penalty amount if the seller fails to meet their obligations under the contract. This creates a strong incentive for the seller to meet their obligations and ensures that your earnest money is protected. Your agent can provide additional guidance on how to structure the earnest money deposit to best meet your needs.

Addendums

Addendums are additional documents that are added to a real estate contract to address specific issues or contingencies.

Negotiation

The buyer has four options for responding to your offer:

1. Accept the offer – congratulations, you are under contract
2. Reject the offer – a strong message the offer is completely unacceptable due to one or more terms
3. Counter the offer – the most common response
4. Let the offer expire – a typical response to a lowball offer

Negotiating the purchase of a house in Park City can be an involved process, but it typically involves submitting and receiving counter offers using contract addendums. These addendums contain conditions for acceptance and a deadline for responding. They are often signed electronically for convenience. Counter offers can range from small adjustments to the deal such as changing the dates, to major changes to the price, earnest money deposit, and contingencies. When both parties have agreed to the terms of a counter offer addendum, a contract is formed. This contract includes the REPC (Real Estate Purchase Contract) and all the addendums that have been agreed upon. It is important to understand and carefully review all the terms of the contract before signing, to ensure that both parties are fully satisfied with the terms of the deal.

Due Diligence

The due diligence process of buying a home is an important step to ensure that the home you’re purchasing doesn't have any major underlying issues. Your Park City real estate agent should be able to recommend licensed home inspectors familiar with the local market.

Typically, the inspection is scheduled within a week of contract acceptance and it's recommended that you attend the inspection to get an immediate readout from the inspector. Your agent will also attend. After you receive the official inspection report, you'll have time to discuss the findings with your agent and decide how to respond to the seller.

If major, non-cosmetic issues are found, you can reopen negotiations and request that the seller pay to fix the issue prior to closing or provide you a credit so you can fix it on your own after closing. Overall, due diligence is an important step in the home buying process and can give you peace of mind knowing that you’re purchasing a home that's in good condition.

Secure Financing

You will need to complete a loan application with the lender to start the financing process if you are not paying cash. You will want to move quickly following contract acceptance to provide ample time to complete the process before the Financing and Appraisal Deadline. Though extending the financing period is often required at the request of the lender and is usually not an issue.

Loan application

When applying for a loan, if you will likely decide to apply with the same lender that did your pre-approval. Though they may already have some of the required documents for your application, you will likely need to provide updated financial statements. Respond promptly to their requests and follow-up if they do not ackowwledge receipt. For example, if your lender asks for your W2, make sure to send it promptly to avoid any delays in your closing. If you decide to work with a different lender, they will provide you with a list of documents they need in order to complete your application. It's important to stay organized and provide any necessary documentation in a timely manner to ensure a smooth and timely closing.

Appraisal

The appraisal is an important step in the home buying process, and is arranged by the lender to ensure that the home is worth at least as much as the loan amount. The appraiser will conduct a thorough examination of the property to determine its current market value. Once the appraisal is complete, you will receive a copy of the appraisal report. This report will show you the appraised fair market value of the property, as well as the comparable properties that were used in the calculations. By reviewing the appraisal report, you can ensure that the property is worth the amount you are paying for it, and that there are no major issues that could affect the value of the property. If the appraisal comes in lower than the purchase price, you may need to renegotiate the price with the seller, or put more money down to make up the difference.

Settlement and Closing

There will be lull after due diligence and funding deadlines, which is followed by the closing process. The closing process consists of two dates:

• Settlement – the date by which buyers and sellers must sign and deliver closing documents and monies to title/escrow
• Closing – settlement is completed, loan proceeds delivered to title/escrow, and closing documents recorded at the county

The closing is the final step in the home buying process. The REPC stipulates that you are allowed to perform a final walkthrough within 7 days of settlement. The purpose of the final walkthrough is to ensure that the property is in the same condition as when you submitted your offer and that any agreed-upon repairs have been made. You will typically sign closing documents a day or two prior to the actual settlement date. You can sign these documents electronically or in person at the title company. If you are signing electronically and obtaining a loan, a mobile notary will be required to be present. You will need to provide money to cover your deposit, taxes, and fees associated with closing. Once the signing is complete and the sale is recorded, the house is officially yours. It's important to review all documents carefully and ask any questions you may have during this final step to ensure a smooth and successful closing.

Upgrades and Move

Once you have closed on your new home, it's time to start preparing for your move-in. Before moving in, you should ensure that utilities, such as electricity, gas, water, and internet, are set up and ready to use. You can set up most utilities before closing by giving them the expected closing date. Your agent can provide you with a list of appropriate Park City utilities for your property.

Additionally, you'll need to have a homeowner's insurance policy in place before closing. If you plan to use the property for short or long-term rentals, you should also obtain a renter's insurance policy.

It's common to make changes to the house before moving in, such as new flooring, painting, and remodeling. Your agent should be able to provide you with recommendations for contractors experienced in working in Park City. Finally, keep in mind that snow can accumulate at your property during the winter in Park City. Be prepared to clear multiple feet of snow if you are purchasing a single-family home, either yourself or by using a professional service.

Slope Style Realty – Park City Experts

Buying a home is an exciting, fulfilling, yet challenging experience. By following these steps, including getting pre-approved for a mortgage, finding the right real estate agent, and making an offer, you can successfully navigate the process and find the home of your dreams. If you're looking for a reliable and knowledgeable real estate agent in the Park City area, Slope Style Realty is here to help. Our team of experts has decades of experience buying, selling, renovating, flipping, and living in Park City. Contact us today to get started!