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- Home Buyer InfoDeciding to Buy Many things to Consider Whether you are a first-time home buyer or are thinking of purchasing your next home, you’ve probably been given advice from friends, family and co-workers, many of whom are encouraging you to buy a home. However, you may still wonder if this is the right time or even if buying a home is the right thing to do. Knowing you are making an informed decision takes the stress out of the process. This site provides you with both general information about buying a home and information about buying a home in Colorado and also relevant links to other sites. Today’s housing market in the Denver area is changing rapidly. There are some challenges and also great opportunities for buyers. The interest rates are still low and housing prices are the best they have been in 7 to 10 years and sometimes better. Please contact us with any questions or for a free individualized consultation focusing on your needs. Steps to Purchasing a Home Lender Pre-Qualification For some reason people hesitate taking this step. This is really for the buyer’s benefit and doesn’t obligate you to anything. All it involves is talking to a lender, which is a great time to ask questions about interest rates and types of loans available. You can also talk to the lender about payments and what you can afford based on where you want your mortgage payment to be. In Colorado a lender’s pre-qualification letter must be include with any offer. So the sooner you get this step out of the way the sooner you can move forward. The lender will ask you some pertinent questions, such as what is your monthly income ? what your monthly credit card bills are, an estimated average? do you have money for a down payment and how much do you have? do you know what your credit score is? will you be the only one seeking the loan or will your spouse be on the loan as well what type of a loan are you interested in pursuing? Loan PreApproval/Approval This should ideally have been initiated prior to finding your perfect home and can progress while you are looking at homes. To initiate the approval process you will have filled out a loan application and given the lender permission to pull your credit report. The lender then examines your credit report, your income, and your expenses and determines how much you can borrow and what the interest rate. You will be asked to provide the lender with various documents to verify your finances and income. Final approval is given after your file has gone through underwriting and you have met all of their conditions. (See Underwriting below) Closing then follows shortly after that. They won’t start the final approval process and underwriting process until you have gone under contract on a home. LOOKING FOR YOUR NEW HOME This is often considered the “fun” part. You should meet with your agent and talk with her/him about the type of home you want, the location and of course the price range (which your lender has helped you determine). How soon do you need to purchase and be moved in by? Do you have any other special requirements such as allergies or accessibility. Your agent will then look through the homes that are listed and provide you with a list that meet your criteria. You will go through this list and choose the ones that you want to see. Basic questions on criteria: How many bedrooms, how many bathrooms? — do you want a garage and how many spaces? — do you want a basement?– Location? — What type of property: townhome, condo, single family, duplex, farm, ranch… — Big yard or small yard? — Style of home: ranch (1-level), 2 story, tri-level …? And many more questions. MAKING AN OFFER Once you have found the right home you will work with your agent to determine the best price to offer. Your agent should offer to prepare a report on similar properties that have recently sold and help you interpret that to determine your offer price. The agent will the create a “Contract to Buy and Sell” and you will sign it. You will then be asked to write a personal check or get certified funds for the “Earnest Money”. And your agent will contact your lender to get a pre-qualification letter. A copy of the Earnest Money check and the lender letter will be included with the offer and sent to the listing agent. In the “Contract to Buy and Sell” there is a date table which your agent will also go over with you. The date table establishes the deadlines for you to do your due diligence on the property everything from reviewing the title and HOA documents to the inspection and appraisal. This is where the works really begin for your Real Estate agent and why you need to have chosen a knowledgeable and experience agent to look out for your best interests and help you manage these dates and deadlines. OFFER ACCEPTANCE The listing agent will present your offer to the seller and the seller will then decide one of three things: Accept your offer — in which case they will sign “The Contract to Buy and Sell” To counter your offer — return a “Counter Offer” with a different price or terms or dates or all three Decline your offer If the seller counters your offer then you will need to decide if you will accept there counter or you can counter their counter. This is where you will find a good real estate agent invaluable. This can go back an forth for a while until all parties are satisfied or one party can choose to decline (terminate) negotiations. ONCE THE OFFER IS ACCEPTED; YOU ARE UNDER CONTRACT AND THE WORK BEGINS Once the offer is accepted your agent will have you sign the disclosures if you haven’t done so already. The agent will give your lender a copy of the contract and counter (if applicable) so that he can start processing the loan. The title company will also get a copy of the contract and any counter so that they can begin processing the title work. And you will start your “due diligence”.
- Home Owner InfoTo Sell or Not To Sell Are you thinking about selling and moving but concerned about today’s market? Here are some things to think about. If the local market is hot then you will probably be able to sell you home quickly. Once it’s under contract you will need to act quickly to find your next home. It’s likely that there will be lots of competition and the homes will be priced high. If the local market is cool (slow) then your home will probably take longer to sell. However it will be easier to find a new home because there is less competition and the prices are more reasonable. So you will be able to get more house or a more desirable for the money. We are currently in a cool market which means you will not be able to sell your home for the same amount as you could have in a hot market but there are still a couple of advantages for you in this market. First, Interest rates are GREAT probably better than what you are currently getting on your mortgage now. Second, housing prices have dropped across the board so even though you will sell your home for less the home you will be moving to will also cost less. Everyone’s situation is different please call me to discuss your situation. The advice is free and there is never any obligation. The following is a list of things to consider when your thinking about selling. It was put together by the National Association of Realtors. Does Moving Up Make Sense? These questions will help you decide whether you’re ready for a home that’s larger or in a more desirable location. If you answer yes to most of the questions, it’s a sign that you may be ready to move. 1. Have you built substantial equity in your current home? Look at your annual mortgage statement or call your lender to find out. Usually, you don’t build up much equity in the first few years of your mortgage, as monthly payments are mostly interest, but if you’ve owned your home for five or more years, you may have significant, unrealized gains. 2. Has your income or financial situation improved? If you’re making more money, you may be able to afford higher mortgage payments and cover the costs of moving. 3. Have you outgrown your neighborhood? The neighborhood you pick for your first home might not be the same neighborhood you want to settle down in for good. For example, you may have realized that you’d like to be closer to your job or live in a better school district. 4. Are there reasons why you can’t remodel or add on? Sometimes you can create a bigger home by adding a new room or building up. But if your property isn’t large enough, your municipality doesn’t allow it, or you’re simply not interested in remodeling, then moving to a bigger home may be your best option. 5. Are you comfortable moving in the current housing market? If your market is hot, your home may sell quickly and for top dollar, but the home you buy also will be more expensive. If your market is slow, finding a buyer may take longer, but you’ll have more selection and better pricing as you seek your new home. 6. Are interest rates attractive? A low rate not only helps you buy a larger home, but also makes it easier to find a buyer.
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