Watch a few top rated tv shows and you might think you are ready to find a foreclosure deal and fix and flip it, making a bundle along the way. This would be a myth contrary to the best steps to buying a home.
“Hey Bob Gordon, how do I check my credit score?”
“When start the process early, looking at houses online, what criteria do I use to set my budget?”
“Some of the tv shows out there make it look like I can save a lot of money doing this on my own. C’mon, do I really need a Realtor?”
Separating Misconceptions From The 10 Most Important Steps To Buying A House
Let’s take an honest look at what you need to know when it comes to buying Boulder realestate. Even if this is your second home purchase. Or maybe even a Second Home, you want to avoid the mistakes that trip up home buyers in this challenging Sellers Market sweeping the United States. So let’s jump right into it.
Finding The Right Realtor Critical To Buying Your Boulder House
Search online and just about every guide suggests checking your credit score first. Well, how exactly do I do that? I mean, do I run down to the bank? Is there an online App? Is it safe to just plug my social security information into the internet?
Why not find a Realtor you know, like and trust and then ask that individual for some direction? After all, that’s our job. I’ve been helping home buyers in the Colorado house market since 1995.
I know where to get your credit checked, what to expect in a transaction, what home values have been doing the past several months/years plus the forecast for Boulder Colorado. Helpful info for home buyers!
I have a lot of info to share. My number one recommendation: start your Boulder home buying process talking to a Realtor.
A Good Realtor Knows The Market Plus
- Can share Market Insights. Recent town news, shopping districts, walk-ability to schools average home values, trends in values and taxes.
- Hyper local expert. I hear this a lot. Having lived and played in Boulder and the Colorado Front Range since 1991, I know this area.
- Advise you on your offer price for your new home. With multiple better than full price offers commonplace this can be critical to making a good investment.
- Negotiating your home inspection, house repairs, the contract to get successfully under contract. I have experience winning bidding wars without the highest or best offer.
- Recommend the best professionals. During the transaction such as home inspectors and mortgage pros and after a closing. I know painters, handymen, landscapers. Put my experience to work for you!
Qualify Early: Choose A Mortgage Lender
Key step. Definitely deserves to be at or near the top of any 10 most important steps to buying a house list. These days, with multiple offers more and more common, having your financing lined up is a key to moving into your new home.
Colorado Realtors will tell you, “You don’t want any issues to pop up as part of your home financing process. That can cause a lot of sleepless nights.” Not all mortgage banks are created equally. And sometimes, you might switch as the process unfolds. For instance, if you are purchasing something unique, like a alley accessed condo that used to be part of a house and was split in the Eighties. Or if you are looking at cabins for sale in Colorado mountains. Unique property requires unique home lending.
Local banks such as Elevations Credit Union and FirstBank might be better placed to serve your needs for these unique sort of loans. A good Realtor can help you determine what sort of mortgage provider to seek for any given house.
Most of the time, a good mortgage banker is going to be able to get you pre-qualified and maybe even on the road to final approval before you start viewing homes for sale. Your lender can explain how much principal vs interest will be in each payment. And why though your income might have you thinking one price point, your debt obligations dictate another.
And your mortgage pro can help with that credit score.
Check Your Credit Score
As you fill out the mortgage questionnaire, the lender is inevitably going to get your credit report. You’ll be able to learn about what your various debts mean to the financial world. A good score is generally 720 and up. But depending upon market conditions, there are financing options starting in the mid 500’s and even government backed FHA notes only require a score of 620.
You’ll probably only care what your credit score number is; and whether it allows you to qualify for your dream home. Those will excellent credit scores can be rewarded with better home mortgage interest rates!
Get Pre Approved For Premier Mortgage Experience
Look, at some point you are going to move from pre-approval totally approved to buy you real estate Boulder Colorado. So why wait to be under contract? The process remains the same. Why not get approved pending the selection of your new home? And a successful appraisal?
Let’s say you run into multiple offers. Well, if your loan deadline is this Friday and all the other offers have 45 days to get mortgage approval, I would say that is a big time advantage!
Why doesn’t everyone do this? Lenders are busy, Buyers don’t always want to first get approved for every penny they qualify for (maybe out of fear they’ll spend all that money on a house!) and it takes time. But you have time as you look for the right place to call home. And knowing your true budget can help you get the best home possible, within your budget.
Determine Your Priorities
Sounds simple. I want this and this and this. Add a spouse. He wants that, she has to have this. Throw in a pandemic. Covid-19 has really scrambled what works for home these days. A year ago, living in the city put you walking distance to the gym, sports arenas, superb fine dining and friends. Today, that same city experience might have you cramming your home office and home gym and home cooking into six hundred square feet of tiny home space.
What are your priorities when it comes to finding a new home? Santa’s helper had good advice when she said, “Make a list and check it twice.”
One of the first questions I always ask condo shoppers, “Do you have a dog? Do you want a dog?” Not all condominiums allow dogs. Knowing your seller or buyer market priorities is critical to success in finding the right place.
Shop For Your Home
One of the most important steps to buying a house is always going to be getting out there and seeing homes!
ReMax and 8Z real estate each recently put out a great blog about Zillow. These companies pointed out that our competitor offers the most houses for sale. But how is that even possible? Well, it turns out sometimes Zillow Lafayette houses are actually already under contract. Yikes. Technically they are for sale. However, if you knew the place was already under contract, it might not make your Top 3 list.
Why not rely upon your designated Realtor to create a home search of only Active and available Boulder real estate. This way you know you are getting first crack at the best houses and not wasting your time viewing places that are never coming to the market.
Pre Novel Coronavirus this step might also include attending in person open houses. You can still drive through neighborhoods, look for signs, ask friends and check bulletin boards at work (or while masked in a coffee shop).
Running Faucets And Going Into Crawl Spaces
This is never going to make my list of the most important steps to buying a house. But it happens lots. I’ve had clients tell me, “My father said to check the water pressure.” Well, who am I to argue with someone’s Dad. When you start viewing houses in person, do the things that make you comfortable. Open closet doors, sit out on the deck, envision your furniture decorating the space.
Some clients even use FaceTime or Skype to have a loved one present for the showing. Don’t worry so much about hard to spot cracks and whatnot – if the house feels right (and buying a home is all emotion), there will be plenty of time to find all the little things during the home inspection.
Make Your Best Offer
We’re not in Kansas anymore.
Well, where we really are no longer is a market where you test the waters with an aggressive low ball offer. Those days are long gone. We are firmly in Sellers Market territory (unless you are purchasing at the top of market, or very ultra luxury market, where you might experience a Buyer’s Market). But for the moment, let’s assume you are in the more common Sellers Market.
Make a smart home offer. By this I simply mean, you want to make an offer that is likely get the Seller to speak with us. If we know there are multiple offers, we need to take steps to be the best offer. Sellers don’t tend to call low offers back. Why would they?
A smart offer is going to:
- Address the financing contingency. If buying with a home mortgage, include your lender letter and contact info.
- Address the cash. When purchasing a house with all cash, Proof of Funds (POF) is a great way to show the Seller you mean business.
- Be realistic on closing date. I like to ask, “when does the seller want to move?” A quick close with delayed possession can sometimes be a winning formula. Its unreasonable to ask a Seller to wait months and months while you sell a house or wait for a lease to terminate.
- If you do have to sell a house to buy a house, address the contingency in the offer. You don’t want to get stuck with two mortgage payments.
- The inspection – in a moment I’m going to say, “always have an inspection.” But, sometimes, to win a bidding war, you might waive some of your inspection options.
- Don’t forget the earnest money. Although in Colorado this is frequently collected after going under contract.
- Sign disclosures ahead of time – be prepared!
I can’t emphasize enough how crucial a smart offer is in the process of completing the most important steps to buying a house. Making a bad offer after narrowing a list of houses to your one favorite property – that’s just an unforced error. Don’t let the best one get away. Be smart, be competitive, be in your new home!
Always Perform A Thorough Home Inspection
Even with a brand new house, why not have a home inspection? I’ve purchased new houses and inevitable the home inspector finds mistakes made by the builder. Once we found an incorrectly installed furnace ventilation pipe – that would have spewed carbon monoxide back into the living space.
Once complete, you’ll get a written report from the inspector. Many reports highlight concerns. You get an opportunity whether you are investing into one of the Louisville wineries or a simple condo or even your perfect rustic log cabin for sale Colorado to have an inspection. And object, in your sole subjective opinion, tot he condition of any part of a house.
Its not uncommon to bring in a specialist too. Older houses are prone to sewer issues. Any house can experience Radon. Your inspection report might have you getting a quote for HVAC repairs. This is a time in the Colorado contract to buy and sell real estate for home buyers to get the 411 on your new home. Once under contract, this might well be the most important of the most important steps to buying a house!
Line Up Home Owners Insurance aka Hazard Insurance or Property Insurance
It goes by different names in different states. But whatever you call it, you’ll need a policy. Living in Boulder Co? Line this up promptly. Not every house qualifies for insurance. Or the rate might not be in line with your expectations.
Complete The Home Appraisal
This one is pretty much out of your control. It is ordered by the mortgage lender and completed by a third party. The appraisal doesn’t give you the value of the house. This is market driven. The appraisal is actually a protection for the mortgage lender loaning on the property, to ensure the value of the house. Again, in this topsy turvy Sellers Market, you might even waive portions of your appraisal to win a bidding war. Sound crazy?
Consider this: cash offers account for about a 1/4 of the national marketplace (and a 1/3rd of Boulder’s). Cash buyers usually do not have an appraisal provision. So, about one in three house sales is never appraised. Waiving yours to win a bidding war might be a good play. In any event, on the road to successfully closing on your new house, we need the appraisl to be completed.
Attend Your Home Closing!
I’ve lost track of where we are in terms of the 10 most important steps to buying a house –I think this last one might be number eleven or twelve. But, once you cross all the T’s, dot all the i’s, get all the info to the lender and negotiate the inspection its time to close on your new home.
When I started in Boulder Colorado real estate, everyone went to the closing. Sometimes there would be someone signing with a POA – Power of Attorney. These days, especially with Covid-19, the closing might all be virtual. There are lawyers doing zoom notarized closings. Title companies offer curbside service. Out of state home buyers might sight with a notary and then move to the area.
Whether you are in person or not, one super important task not to forget just before you close. The Final Walk Through.
Boulder Real Estate News Recommends
Discover the guidelines for an FHA mortgage. Luke Skar blogs on everything you can ever possibly need to know. Dig deeper on four suggestions before you buy your next home from Chris Highland. Search for your perfect home now on BoulderRealEstateNews.com now.
Thank you for checking out my blog and see you tomorrow. ~ Bob