I remember back to when I bought my first home. My agent was a guy I found in the yellow pages, I did no research on the mortgage company I was referred to by my agent, and I did not prepare myself for the process by putting together a specific list of what I wanted in a home. As a result, the home I ended up purchasing wasn’t exactly what I wanted and was located far from my work. It wasn’t the best decision I had ever made and looking at the Settlement Statement, there was lots of money that I left on the table. I think everyone involved in the transaction made a ton of money off of me. Let’s just say I would never do business with anyone involved in that transaction again.

So fast forward to 2005. My wife and I decided to build a home and we contracted with one of the better builders in the state. We did our homework this time and I feel like it paid dividends. We made sure we worked with one of the best loan officers in Utah, Bruce Sorensen of Black Diamond Mortgage. We also carefully monitored everything our builder was doing, which lead to us catching some construction mistakes before it was too late to get them fixed. I am not sure our builder, Ivory Homes, would ever want to work with us again. Seriously, we had a good experience with our construction manager as he explained every step in the process during construction. It was a great experience.

Buying a home in Utah does not need to be a stressful event or one where you allow the people you are working with to run the show. Utah is very lucky as we have some fantastic real estate agents and loan officers to guide you through the process. While you could try and make a go of it alone, unless you are experienced in real estate, I wouldn’t suggest that you try this. More than likely it will produce only headaches and heartaches.

To help guide you through the process, I have put together a list of some of the important steps you should take when buying a home in Utah.

1. Save your down payment. While down payments can be gifted from family, one of the best resources for your down payment will be your personal savings. If you can qualify for an FHA loan, the down payment required will be much lower. So if you are looking at an apartment, make sure you ask to see if the property is FHA approved. If you are former or current Armed Forces, you may qualify for a VA loan, which has some fees associated with it, but those are lower than even an FHA loan. If you cannot qualify for either, you will need a conventional loan, which means you will need to save much more.

2. Decide what your budget will be for a monthly house payment. Before you go talk to your loan officer, use a mortgage calculator (click here) to determine what the monthly payment would be on a home loan for the price range that you think you would like to be in. Draw up a monthly budget and see what the amount is that you can afford. My suggestion would be to start with 22.5% of your monthly income as a potential payment. You will also be required to pay property taxes and insurance, as well as possibly mortgage insurance. Make sure you examine the affordability of any payment. Do not rely on your mortgage loan officer to tell you what your qualify for — many times this number is higher than what you can truly afford. Pick a purchase price and stick with it.

3. Find a skilled loan officer you can connect with. Finding the right Utah mortgage loan officer is one of the keys to avoiding stress in the process of buying a home. You want to make sure you find a loan officer who will work with you throughout the home buying process so that you can close your home on time. No loan officer should give you a “pre-approval” letter anymore as they cannot send your file to an underwriter until you have selected a home. What they can and should do is collect all your documentation, pull your credit, and run an analysis to determine if you can qualify for a home loan at the amount that you have identified. If you want a list of paperwork that you should take to your first meeting with a loan officer, read my article titled “Refinancing in Utah“. Finding the right loan officer is important, and so is knowing the mortgage application process. Click here to read my article titled “The Mortgage Process Explained“.

4. Identify the type of home that will meet your needs. Never go into the home-buying process thinking you will just see what happens. I did this with my first home and I got a home that didn’t really meet my needs. It was my mistake, and one that I hope you will learn from. Make a list of the traits of your ideal home. Look through the Utah MLS (click here) and see the types of homes available in the zip codes that you have identified as where you would like to target. How are the schools in that area? A great tool to find out how the schools in the area perform is GreatSchools.com (click here). They provide available standardized test results and the unedited reviews of the schools by parents, teachers, and administrators. While making this list is important, remember that you may not find the home that meets all of your criteria. However, the more patient you are, the more likely you are to find a home that does. Make a list of the homes from the Utah MLS that meet your criteria.

5. Find a real estate agent you can connect with. I talk a ton about what makes a great real estate agent. You should talk with friends and family to get some referrals of agents they have successfully worked with in the past. But you should never just take their word for it — make sure you talk with each agent and find out what they will do for you as a client. As a buyer, you should have an agent of your own — never rely on the seller’s agent to give you a good deal or represent you. Any commissions that your agent gets will come out of the pocket of the listing agent, so it will not directly come out of your pocket. When you find the right home, your agent can help you negotiate for a better price or other concessions. You want to make sure you have someone in your corner.

6. Patience grasshopper. Finding the right house can be a long process. You may look at a ton of houses before you find the one that is right for you. If you are looking to purchase a home that is a Utah short sale or has been foreclosed, negotiating with the bank may take a long time. But when talking about the purchase of your new home, know that your patience can pay off. Give your loan officer enough time to complete the loan process so you can close on time.

6. Always negotiate, but keep it in check. When you are ready to make an offer on a home, know that you can negotiate with the seller. Your agent will fill out a Real Estate Purchase Contract (Utah REPC) that will detail what you are offering to the seller. You should negotiate on price and ask for allowable closing costs to be paid for by the seller up to the percentage that is allowed by the type of loan you are getting. You will need to know if there are any problems with the home, so I would suggest you order a home inspection to make sure you know what issues exist and make the purchase contingent on your approval of the home inspection. You will set a deadline for the acceptance of the offer or counteroffer, and then you wait. More than likely, the seller will come back with a counteroffer which you will discuss with your agent. You may go through that dance a couple of times before everyone is satisfied with the contract and can sign. You will most likely have to put earnest money down to the tune of $500 to $1,000 so the seller believes that your offer is sincere and you are less likely to walk away from the transaction.

7. Work with the seller. I think it is important that you have a good relationship with the seller. You will need to know where all the shut-offs are. Is there a special way that you need to water the lawn each summer to keep it green? Can they introduce you to the HOA Board? What are the CC&R’s in the community? The list of questions you can ask them is a mile long, and they can save you a ton of time providing you with that information. Keep that relationship positive with the seller.

So when you go to buy a new home, make sure you do your homework. There are some great deals out on the market right now for those who know where to look and have the patience to wait.