It is about this time of year when those who are serious home buyers start paying attention to the market in anticipation of purchasing in the springtime. Interest rates are still historically low and while inventory has been a little tight for a few years, I believe if you remain patient and somewhat flexible (and realistic of course), I am confident you can own your own place when you are ready.
The first question I hear from first time home buyers is “What do I need to do to prepare?". To help answer this very large question, I have included a few of links to articles I recommend you read to help you get the big picture to start this journey. I don't like to overwhelm my clients, so I suggest you just save these links below and read them at your leisure or at your own pace. Once you feel you have a good hold on the path you want to take, then you will be ready to take these more interactive, more productive and arguably more fun steps.
Drive Around & Take Notes Every Day - When you are out and driving around start looking for communities in which you would like to live. Drive them day, evening and weekends to get the full picture. Notice if the area is quiet, or it is bustling with traffic? Does it have a lot of kids and families or does it seem to be full of retirees? The more you see, the more opinions you will create, which is good! Keep a little notepad in the car and jot down what you like and don’t like. Feel free to eliminate areas you know you won’t want to live in and don't go back - cross these neighborhoods off your list and move on. This tactic will save you time down the line.
Talk to Home Owner Friends - Converse with friends who have purchased homes, town homes or condos and find out what they like and don’t like about their decision. Do they have any regrets? Lessons learned? Secrets to share? Include questions such as if they like their HOA. Is the neighborhood pet-friendly? Is the school district well respected? How much are property taxes? Is the crime rate low crime? The more you talk and ask questions, the more you will learn and thus, know what will attract you to a neighborhood.
Meet at Least 3 Lenders - I encourage you to speak to at least 3 mortgage lenders or brokers who have experience with first time home buyers. I will refer you to some great lenders I know if you don’t already know someone you trust and who is responsive. The first step is to get a formal pre-approval letter or statement (on company letterhead) from a locally based lender and then work with him or her to understand your budget and how to improve your credit score (if needed) or improves other factors to help you buy a home you can afford. It can be tempting to work with an online lender or even a lender out of the area, but this may make your eventual offer on a home less attractive to a Seller. Local lenders are preferred and typically are easier to work with to close on time, which is what the Seller and the listing agent will want.
Conduct Only MLS Originated Searches! Start to look at properties online using Colorado Properties MLS or not syndicated website like Zillow, Trulia or Redfin, which may have out dated information. Such third party websites only provide data available in the County's public records and can often be misleading. Bookmark the Colorado Properties link I am providing you, which will give you accurate MLS information unlike these online sites (read more about why I suggest this approach here). Using MLS only searches will help you understand the current market, what you may be able to afford and is a fun way to get you excited and knowledgable about the real estate market. Once you have set a budget with a lender, your licensed real estate broker can set you up with some easy-to-use MLS search alerts direct to your smart phone, so you can start to see what is available and what you may and may not like.
As you probably know, it does require some savings to get purchase a home, even if you have a 0% loan in place. A home inspector will cost $300 to $500 depending on the property. There will be closing fees due to both your lender and the title insurance company, which can add up to $2,500 or more depending on your loan and the value of the property. A home appraisal will be required from the lender and will cost about $500 - $800. Some of these fees can be rolled into your mortgage and financed. Sometimes not. Moving costs, pre-paying taxes and insurance, not to mention setting up utilities, and if there are HOA fees, will all add up. Good news is that in Colorado, a Buyer's Agent's fess are paid for by the seller, allowing me to work together on as much as you like at no additional charge.
As you start this exciting journey, here are articles I recommend you read first:
What you are about to embark upon is a combination of relationships, your education and follow up on what you want. Everyone needs partners to purchase a home (a home inspector, an appraiser, a lender, a real estate agent, and of course a seller!), so if you can remember that it is a process, then you will be fine!
If you would like to see housing data for Boulder County, there are plenty of statistics to check out in such as "Days on Market", "Total Inventory" and "Newly Listed Homes". We track all these market statistics for Single Family Homes (SFH) for most of neighboring towns on a monthly basis, including Louisville, Erie, Lafayette and Superior. Check out Winter 2017 market summary here. At Louisville Realty Associates, we have the experience, energy and depth of knowledge to help you list your home for the best price. You can reach me anytime at firstname.lastname@example.org.
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