Buying a Denver, Colorado Home in the Shifting Market

 

 

Are you thinking of purchasing a home in the Metro Denver area, which includes 7+ counties stretching out over the Front Range: Denver, Jefferson, Douglas, Broomfield, Arapahoe, Boulder and Adams? There are many components to consider inside of this shifting market, with concerns of inflation and recession. Home ownership has always, historically, been a sound investment to help build your equity and net worth especially if you will be staying in the home for 5 or more years. Plus, it sure does beat paying someone else’s mortgage, which does nothing for your bottom line.

 

Many Denver homebuyers are still under the impression that one needs 20% saved for a down payment in order to make that desired purchase. While 20% can save you some extra money with a monthly mortgage insurance premium, your cash may be spent or saved better putting it in other vehicles, or saving your cash for a rainy day. In fact, Colorado homebuyers can put down 5% or even less with the help of institutions like the Colorado Housing Assistance Corporation (CHAC) or CHFA - which can help us get you into a home for as little as a $1000 down for eligible and qualified buyers.

 

The first step is to get with a local and reputable mortgage broker and lender who can talk to you about the various loan programs currently available, and who can help outline various scenarios that work best for you as a unique Denver homebuyer. It’s important that you find someone who will work alongside your trusted real estate agent partner in a partnership that will help you secure the right home when it comes along. They need to be fully available for a conversation, unlike the larger lenders and banks who sit behind a desk in a far away city. My team and I can help you find an amazing lender to partner with to make the entire process a smooth one, from the appraisal, through the underwriting process and a seamless interaction with the affiliated title company.

 

Once our lender partner is in receipt of all your necessary documentation, from W2’s or 1099’s to tax returns and current pay stubs, bank statements and the like - they will issue us our Pre-Approval, aka Lender Letter. Often times, the pre-approval is a lender’s initial judgement of a homebuyers qualification whereas a mortgage commitment often comes later after the underwriting process. Some lenders won’t even issue the pre-approval without first receiving all of the required documentation that goes to the underwriter for approval.

 

We as Realtors abide by a strict code of ethics. Among them, we are true Fiduciaries, representing your interest and bottom line first and foremost. Real estate salespeople who don’t have this designation have no obligation to protect your interests inside of a home purchase. Likewise, many of the Silicon Valley and IBuying companies that steal your attention and pop up on your social media feeds couldn’t care less about your individual and unique needs. At most, you will get a desk jockey located a thousand miles from you, of which you are just a number to them. My team and I at Compass Colorado, inside the Metro Denver market would love the opportunity to sit with you when the time is right, discuss your personal needs and have the honor and privilege to work with you on your timeline inside the buying process from start to finish. Additionally, we have a vast network of top Realtor partners in most American markets who can assist you outside of the Denver Metro and Colorado markets. We can connect you with a resource, wherever you might be in the country.  Allow us to help you with that often confusing interview process.  Ensure you talk to at least 2 to 3 people to find the best fit.  

 

There are many components that go into finding that perfect space to call your own. Most important among them are location and proximity to work, schools, etc. Size and layout - the home’s functionality also plays a large part in any decision to purchase. Age and condition of the home are factors as well (which can often surface inside of a homebuyers inspection and due diligence period, the Colorado "Contract to Buy and Sell Real Estate" protects you in the event of any adverse or material defects to the home). Below I’ll outline some of the most desirable neighborhoods and areas within Denver and the surrounding suburbs:

 

Washington Park (aka Wash Park) - a hip, trendy community just a couple miles south of the Denver skyline. It’s home to a large 155 acre park where fit Denverites can be seen exercising, playing and gathering - as well as cute shops and restaurants and some of the coolest bungalows and architecture in the city.

 

 

 

 

 

Highlands/Berkeley/Sunnyside - three contiguous neighborhoods spanning just to the West of the Broncos stadium, and heading north and west towards popular Sloans Lake. Home to breweries, trendy restaurants, the Edgewater Public Market with a host of food and beverage options. These neighborhoods feel like the suburbs but are a mere 10 minutes to downtown Denver.

 

 

 

Park Hill / Congress Park / Hilltop / City Park - four adjacent communities to the East of Denver and often with magnificent skyline and mountain views, it’s home to the Denver Botanic Gardens, the Denver Zoo, the Denver Museum of Nature and Science, as well golf courses, walking trails, million dollar homes and much more!

 

 

 

Cherry Creek / Belcaro / University Hills / Cherry Hills - prestigious and prominent neighborhoods south of Denver off Interstate 25 heading towards Colorado Springs, these affluent neighborhoods are ideal for families, shopping, dining, work and play!

 

The market has shifted some here in Denver and in most American markets back towards a more balanced and sane place, but a home in great condition and in the right location will still sell quickly. If the home is new to market, there may be less wiggle room with the negotiations in order to secure the home and get it under contract. If it’s a home that has been on the market 10 days or more with no interest or current offers, which we are seeing more and more in Denver, then there will be room to negotiate a price under where the seller and their agent listed it. Another option, to be discussed with the lender, is to offer the seller their price and ask for a concession (seller’s assist / credit) towards your closing costs or “buying down” your interest rate. Framing the right offer at the right time with an experienced Realtor like myself is crucial to securing your desired home!

 

Ensuring the contract is properly filled out as it relates to all of the various dates and deadlines (mortgage, escrow money, title, survey, disclosures, etc) and contingencies (inspections, mortgage, etc) is a primary job of my team and I to ensure that you are well protected throughout the contract period - and that you have the ability to terminate the contract should home inspections reveal material defects with no loss of deposit (escrow) monies.

 

Another step in the process down, but not quite time to celebrate yet. In fact, there is still much more work to be done. If no official mortgage application has been made, you as a Denver homebuyer must do so as soon as possible, but usually within a week of an accepted contract. In most cases, the buyer is required to pay for an appraisal of the property upfront, where a neutral third party certified appraiser goes into the home to ensure everything looks good and that the value (purchase price) is in line with the current market. This protects the lender, as most loans are backed by Fannie Mae and Freddie Mac, government institutions - and will eventually be sold to other parties to hold the loan.

 

Home Inspections: the basic home inspection covers all the systems, the roof, grading and the like.. basically everything except what is behind the walls. They usually run from $300-$450 depending on the square footage of the home and is an upfront buyer expense. Other optional inspections include water testing, radon testing (safe levels are under 4), sewer scopes (if public water) and septic inspections (if private) and mold testing - among others. These are strongly recommended, even with new construction, as they provide peace of mind and knowledge that nothing major is wrong with the home at the time of purchase.

 

Most lenders will require proof of homeowners insurance, so be sure and get that in place as soon as you know you will be proceeding to the closing table, after successful appraisal, inspections and the receipt of clean title from the title company. There are many nuances and details to various insurance policies one must unpack, so be sure you connect with a good partner who can walk you through all the coverage details.  Prior to the closing date, be sure and transfer all appropriate utilities into your name as of the date of closing, so nothing gets turned off! Usually, the title company will handle the transfer of the public water from the sellers name to the new buyers. Lastly, the Colorado contracts allows us to perform a final walk through on the day of or prior to settlement to ensure the property is as you last saw it, it is clean and free of debris and material possessions, and that everything is still in working order! Now, onto the settlement table. Get your signing hand ready, and then the keys are yours!