How to Buy Your First Denver Home
I‘m frequently asked by first-time home buyers what all they need to do to buy a home. The steps are relatively easy with the right real estate team, especially given all the changes happening with the housing and financial markets. Your First Home by Gary Keller is a great resource and a quick read to get you started. We want to start you with a rough outline on how to get ready to buy a home through closing (ok, AFTER closing).
1) Decide You’re Ready to Buy a Home
Being committed to becoming a home buyer is the first vital step. Educate yourself on what it costs to own a home versus renting. Make sure to consider the tax benefits of home ownership. You may have several concerns about the market and affordability that can be addressed in steps 2 and 3, such as credit eligibility, down payment, etc.
2) Team Up with a Real Estate Agent
Find a REALTOR that knows the business, markets, and is a fit with how you prefer to search for a home. Some buyers may prefer spending days visiting homes while others prefer to use the Internet to narrow down their search. Most of the work your REALTOR does is after the initial offer, during negotiations and keeping everything moving toward closing. Working with a REALTOR does not cost you a thing and his success fee is paid by the seller.
3) Get Financing
Just as important as having a great REALTOR, your lender is a vital part of the team to get you where you want to be. First time buyers should know there is a LOT more to evaluating programs than looking at interest rates. Loan terms and conditions are also vital factors that a good lender will explain to you. A mortgage lender will be asking you for a lot of financial documentation and a good lender will help you create a plan that’s in-line with your financial goals, making sure you don’t become house poor. Before beginning the next step, make sure you have pre-approval to determine how much home you can comfortably afford and are able to make an offer then you find the right home. Once you have your loan pre-approval, make sure not to change your credit profile by changing jobs or making big purchases using credit.
Keep activity through your bank accounts consistent in order to make sure the loan underwriting process goes smoothly.
Though home buyers can look for lenders on their own, many top-notch REALTORS have lenders they can recommend based on previous experience and their ability to bring money to closing on time and get the deal closed.
4) Find Your Home
A good Realtor will not only want to understand what you want in a home but why you want it. The actual search may be handled many different ways. As mentioned previously, some first-time buyers may want their Realtor to do all the work and to merely visit homes their Realtor selects. With the availability of technology today, consumers can have access to the same listings Realtors have access to. With map-based search tools, buyers can search for the type of home they want in an area they designate. Many of these tools allow buyers to create search profiles that alert them when a home comes on the market that meets their criteria.
5) Make an Offer
This is where the home buying experience starts becoming exciting. You’ve found a place you like, it fits in your budget, your Realtor has conducted a price analysis for the property, and you put an offer together. Like the lending step, there’s more than price, look at inclusions, exclusion, terms, conditions, and deadlines. A seller may accept less money for a quick close depending on their situation. There are many variables that play into an offer, not to mention counter-offers, and other negotiations.
6) Perform Due Diligence
Ensure you’re making a good investment! Inspections are an important part of conducting due diligence. You’ll definitely want to have a visual inspection of the home done. A good inspector will attempt to identify any problems that may warrant further investigation, such as the presence of mold and structural issues. Buyers should attend the inspection so they can learn where all the important controls, such as water, gas, hot water heater and circuit breakers are located and how to operate them.
Other inspections a buyer may want to consider are a radon test and sewer scope, especially for older homes. Once your inspection is complete, there is another period available to negotiate for repairs. Your lender will also have an appraisal done to ensure the home is worth what you’re paying for it.
7) Close
This is where you’ll get the keys, and responsibility, for your new home. Normally, 48 hours hours before closing, you’ll receive a settlement statement with the amount of money you’ll need to bring to closing. Make sure you bring this in the form of a cashier’s check or have the money wired over from your bank. Insist on a walk-through inspection to ensure all items scheduled for repair have been completed and the home is in the condition you expect. Make sure you keep all your paperwork from closing since you’ll need it for deductions when filing your taxes.
Maintain and Protect Your Home
Congratulations Home Owner! While owning your home, make sure to remain up to date on preventive maintenance, since it’s much less expensive to fix any problems early. Along with the joys of owning a home, you’ll also need to keep up with more mundane things like cleaning gutters, fixing cracks, and replacing air filters. Enjoy you new home!
To get started in your new home search or to ask additional questions on home-ownership, contact Derec at Info@MileHighUrbanLiving or (303) 847-4926. Happy hunting!
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