Your 7-Step Guide To Successfully Buy A Home In Denver
Any family can find the home of their dreams in the expansive city of Denver. Whether you’re looking for small single-family homes or breathtaking pieces of luxury real estate in Denver, this city has the perfect house for your needs. In order to successfully buy a home in Denver, you’ll need to navigate the complexities of the home buying process. We’re here to lend a little helpful advice for potential homebuyers just like you!
As a top real estate agent in Denver, we have helped numerous families and homebuyers find their ideal home in the metro area. We wanted to break down the home buying process into manageable steps and share our advice on the best practices. Stick with our 7 handy steps and you’ll be on the right track to buy a home in Denver.
1. Save Up For Your Down Payment
Before you can even consider buying a house, you need to have your finances in order. You might be eager to start looking at homes, but you need the financial capital to back up your purchase. Most lenders prefer borrowers who can cover up to 20% of a home’s purchase price as a down payment. That percentage can be a bit flexible though.
If you have terrific credit or you qualify for certain loan programs, you could secure a loan with a smaller down payment. In certain cases, borrowers can qualify for down payments as low as 3.5%! For these kinds of loans, the borrower will often be required to make monthly private mortgage insurance (PMI) payments on top of their mortgage. If you’re having trouble saving the funds for your down payment, it would be wise to consider these loan programs.
Saving up for your down payment may seem daunting, but it actually isn’t as difficult as you might think. There are plenty of creative ways that you can save and secure your down payment money. While you’re at it, you should try to save some cash for other upcoming expenses. You may need some extra funds to cover closing costs, prorated property taxes, and your moving expenses.
2. Seek Pre-Approval For A Mortgage
Once you’ve accumulated the funds for a down payment, you’ll need to get pre-approved for a home mortgage loan. Most home sellers expect buyers to have a pre-approval letter from a lender. That document shows that you’re serious about the sale and that you have the necessary finances for that home.
Let’s make one thing clear here: Getting pre-approved for a loan is not the same thing as being pre-qualified for a loan. To get pre-qualified to buy a house, you just need to have a quick conversation with your lender about your income, assets, and down payment. To get pre-approved for a loan, your lender will need to verify your financial information and submit your loan for preliminary underwriting.
Keep in mind the fact that there are many different mortgage options out there. By working with your lender, you’ll get to set the boundaries so that your mortgage works for you and not against you. What kind of mortgage might be best for you? Use our mortgage calculator tool to identify the right type of mortgage for your individual needs.
3. Hire A Real Estate Agent
If you are really serious about your choice to buy a home in Denver, then you must work with a buyer’s real estate agent. At first, an agent might just seem like an extra complication, but their expertise is invaluable. The home-buying process is often arduous and you can’t devote all of your attention to it at all hours of the day. A realtor, on the other hand, can put in the hours that you can’t for your home buying process.
A real estate agent will act as your advocate and work diligently to find the best listings for your needs. Your agent’s years of real estate experience can come in handy during contract negotiations, house showings, and much more. You need expert support for your intimidating real estate decision and an agent can provide exactly that.
4. Tour Denver Properties
Now that you’ve got all the necessary pieces in place, it’s time for the fun part: finding your next home! While your experience may vary, most homebuyers will visit 10 homes over 10 weeks time before they submit an offer on a home. Of course, you could fall in love with the first home that you tour, but you must remember to take this decision slowly and seriously. After all, you’ll be living in that house for the foreseeable future, so there’s no reason to rush the process.
Before you start your home search, take the time to develop a list of must-have home features with your spouse. These criteria may include:
- Property location and room layouts
- Number of rooms and total square footage
- Nearby school districts and neighborhood safety
- Changes in property values over time in that area
- The future resale value of the property
- And much more
Make sure all of your criteria are communicated clearly to your real estate agent. They’ll use your list of must-haves to find the right listings for you and your family.
5. Submit Your Offer
Whether your search takes a day, a week, or a month, you’ll inevitably find the right home for your needs. If you’re ready to pull the trigger, you’ll need to draft an offer with your agent and submit it quickly. Other buyers may be eager to put in their offers too, so your timing is critical at this point.
Your offer is your time to shine and put your best foot forward. Use your offer to cast you as the best candidate for the home sale. Keep in mind that sellers are often more inclined to select an offer that is more flexible and open to negotiations. Your offer will include a number of crucial details about the real estate transaction, such as:
- The purchase price, lender information, and down payment amount
- Items requested to be left within the home (e.g., appliances, furnishings, antiques, etc.)
- Sale contingencies (e.g., home inspection, mortgage approval, etc.)
- Closing date
Once your offer is submitted and the seller contacts you, you’ll enter into the negotiation phase of your contract. The negotiations can be quick and painless, but they can also be some of the most difficult parts of the home buying experience. Be ready to compromise on some things and to listen to the advice of your agent.
6. Address Contract Contingencies
If you’ve reached this point, it means you are officially under contract on your new home. It’s not always easy to get to this step, so give yourself a pat on the back. This doesn’t mean though that you’re out of the woods just yet. Now you’ll need to work through the contingencies that were laid out in your contract.
Contingencies are simple conditions that must be met in order for the purchase to take place. These dependencies function as a safety net for you to back out of the sale without losing your deposit. The most common contingencies include:
- Home Inspections - Conducted by a professional, these inspections help protect you from being blindsided by property issues. For instance, if the inspection reveals a structural issue, you may ask the seller to fix the problem or reduce the price. You may also decide to cancel the contract at this stage.
- Appraisals - Lenders will require an appraisal of the property to evaluate its actual value. This contingency helps protect you from paying more than the home’s real value.
- Final Mortgage Approval - Your lender will pour through all your financial details to finalize your mortgage.
7. Close On The Home
Congratulations! You’ve reached the final step of your homebuying experience! All of your diligent planning, financial footwork, and waiting have led up to this moment. While it’s the most exciting step, it’s also the one filled with the most paperwork. So, grab a pen and get ready to sign some documents! You’ll also want to grab your checkbook too, as you may need to pay for closing costs, prorated property taxes, HOA fees, and homeowner’s insurance.
Once you’ve paid and all the paperwork is signed, you can finally breathe a sigh of relief. You’ve successfully navigated the process to buy a home in Denver and you have officially become a homeowner!