Lessons of Buying Homes & Condos in Park City
Buying and selling Park City real estate can be fun, exciting, and one of the best things you'll ever do in your life. That's the way it should be every time but there are times that transactions get sticky during the due diligence and negotiation. In Park City, sellers don't have to sell, buyers don't have to buy, but everyone wants to be here!
This blog post is to help you better understand the complexities of the Park City real estate market and items you need to know when buying or selling a property. My goal is to build and add to this page over time to be able to help potential buyers become clients as well as help you understand the process of buying property in Utah. We are always happy to answer any questions you might have about Park City real estate.
Lesson #1: Earnest Money & Contract Dates
The real estate purchase contract is a binding contract that could lead to big consequences if everyone isn't on the same page. Make sure you fully understand what you are signing and consult an attorney if you feel it's necessary. One of the major items I've learned by representing wealthy clients, and what my mother would always say, is an ounce of prevention is worth a pound of cure.
- When is my earnest money due? I am always asked how soon the earnest money is due and my response is as always soon as possible.
- Earnest money is due four (4) calendar days of going under contract.
- Contract Deadlines are Important!
- Due Diligence Deadline: It is extremely easy to back out of a contract during your Due Diligence Deadline. I like to keep deals together but during this process, you may cancel the contract if you don't like the way the sun comes up. IMPORTANT: Asking for a seller to satisfy due diligence does not automatically extend the due diligence deadline. In order to be 100% protected, we'll need to add that the seller does not respond by a certain time the contract is automatically canceled.
- Financing and Appraisal Deadline: Buyers may cancel a real estate purchase contract if they are not satisfied with the terms and condition of the terms of their financing or if the appraisal is lower than the purchase price. Experienced lenders tend to do a great job delivering what was promised. I've never had a client buying property in Park City cancel because of a small change in financing I ask that you not be the first. This is not to be used as a loophole for the due diligence deadline. If an appraisal comes in low we'll have some options for you. IMPORTANT: Once you pass the Financing and Appraisal Deadline your earnest money is almost always non-refundable unless the seller does not perform on the contract.
- Settlement Deadline: The settlement deadline does not mean the same thing as closing - read the quoted text regarding closing to better understand Settlement vs Closing. "Closing. For purposes of the REPC, "Closing" means that: (a) Settlement has been completed; (b) the proceeds of any new Loan have been delivered by the Lender to the Seller or to escrow/closing office; and (c) the application Closing documents have been recorded in the office of the county recorder ("Recording"). The actions described in 3.2 (b) and (c) shall be completed no later than four calendar days after Settlement."
Lesson #2: Park City Investment Properties & Bookings
If you are selling an investment property in Park City that has nightly rentals you must disclose the date and price of the booking during the seller property condition disclosures period. You must also stop booking new rentals after the seller property condition disclosures are provided to the buyer.
Lesson #3: The Park City Real Estate Market is Complex
I like to think of our real estate market here in Park City as being a living organism. It is always changing which adds to the complexity. With 100's of HOA's, it is impossible to know everything about every HOA in Park City. With new financing products coming out there may be a property that is now financable that wasn't last year - this changes the value of the property since it opens the opportunity of ownership to a larger buyer pool.
Lesson #4: Park City Transfer Fees
While there isn't a large percentage of homes or condos in Park City with transfer fees they are common in our marketplace. Almost every property within an HOA has some form of transfer fee that may be as low as $50 but it could be much more. The areas to note off the top of my head are golf course communities, resort properties such as The Canyons Village (some but not all and mainly on the newer product), and Empire Pass.
Lesson #5: The Agency of a Park City Realtor - who works for you?
If you happen to be driving around and see a real estate sign - don't call the listing agent if you don't plan on being unrepresented. If you're online and you fall in love with a property - don't call any agent with questions unless you plan on them representing you. If you do either of these two things you may end up owing the agent a commission even if you don't want to work with them. That agent that picked up the phone or answered an inquiry may then be the procuring cause of the transaction and have a claim to be owed a paycheck. Do your research and make sure you feel comfortable in the agent's skills to represent you! Hopefully, that person will be me. Below are outlines of the duties from an agent owed to their client. Item to note - don't go at this alone unless you are highly skilled in negotiation and real estate. One slip in wording can cost a buyer or seller several percent of the purchase price.
- Buyer's Agent
- A Buyer’s Agent acts solely on behalf of the buyer and owes duties to the buyer which include the utmost good faith, loyalty, and fidelity. The agent will negotiate on behalf and act as an advocate for the buyer. The agent must disclose to sellers all adverse material facts concerning the buyer’s financial ability to perform the terms of the transaction and whether the buyer intends to occupy the property. A separate written buyer’s agreement is required which sets forth the duties and obligations of the parties.
- Seller's Agent
- A Seller’s Agent acts solely on behalf of the seller and owes duties to the seller which include the utmost good faith, loyalty, and fidelity. The agent will negotiate on behalf of and act as an advocate for the seller. The seller is legally responsible for the actions of the agent when that agent is acting within the scope of the agency. The agent must disclose to buyers or tenants all adverse material facts about the property known by the agent. A separate written listing agreement is required which sets forth the duties and obligations of the parties.
Lesson #6: The Inspection
The inspection report can be overwhelming so make sure you discuss the inspection report with the inspector - the report is often not as bad as it appears at first glance. Park City can be hard on roofs and siding so you'll want to pay a bit more attention to the exterior of the property before making an offer. If an inspection comes back with some smaller items needing repairs don't assume the seller is willing to pay to fix something that "works fine for them". I always suggest you have a radon test while doing an inspection - the cost of a radon test is usually around $150.00. After going under contract I will supply you with a buyer's due diligence checklist to ensure we cover most of our bases but something unique can always come up that we didn't expect - it may or may not be a big deal.
If you have any questions regarding Park City real estate please write them in the comment box and I'd be happy to answer them.