Finding your dream home

In my experience, a house is not just a dream home because of its size or number of bedrooms or because it sits in the perfect neighborhood in the hottest zip code. It’s about how you feel when you walk through the front door – the way you can instantly see your life unfolding there. It is about investing in not just a house but a place you can call home. It is about a lot more than real estate. It’s about your life and your dreams.

Whether you’ve bought many homes or you’re looking to buy your first, whether you’re in the market for your dream home, an investment property or that perfect vacation getaway, purchasing a property is one of the most exciting, rewarding and frequently stressful, experiences you’ll ever go through. Not to mention, the home buying process is most likely one of the biggest financial decisions you will make.

There are a multitude of factors to consider and decisions to make when navigating the home buying process and it is crucial to have all the available resources necessary to make a well-informed decision. The professional you enlist to help you through the buying process, can provide expert guidance and save you from unnecessary headaches and unforeseen hassles.

This is where I come in, offering the advice, information and assistance that only a qualified real estate professional can provide. And because I stay on top of all the latest real estate laws, regulations and contracts, you can rest assured that you are always getting expert guidance and service. Together with a financial expert you will have a dedicated team working together on a planned strategy, and chances are you’ll be moving into your dream home sooner than you might imagine.

Why buy?

Every person has a different dream they want to attain and having a clear sense of your reasons for buying will help you choose the right property.

Are you renting and dream of owning your own home? Are you tired of paying rent and want to pay your own mortgage instead of your landlord’s? Have you outgrown your current home? Are you dreaming of a larger yard for you children and dogs to play in? Are you looking for an investment portfolio or a rental property? Would you rather live in a different neighborhood or maybe shorten your commute so you can spend more time with family? Are your kids grown and you dream of downsizing to a smaller low-maintenance home in order to travel? Maybe you envision yourself buying a mountain property where you can live out your dream of skiing every powder day?

Or maybe your income has grown? Property ownership is an excellent investment; whether you are looking for your dream home, a rental property, or to expand your investment portfolio. Owning real estate is one of the least risky ways to build equity or to obtain a greater return on your initial investment.

Clearly determining the reasons you’re buying and what kind of home you’re looking for is an important step before searching for the right property.
 

First things first...

There are some considerations and preparations that should be made prior to beginning your home search. For some, this may be a bit daunting and buyers may benefit by consulting an experienced real estate professional right from the start. Please feel free to contact me at any time with questions or if you need assistance at any point during the process.

First, examine your current financial situation and project how much you can afford. While every financial situation is different, a good rule of thumb is to calculate between two and three times your gross income to find a home value you can afford. You should also calculate the costs of homeownership such as property taxes, insurance, maintenance, utilities, and association fees, if applicable. 

Start saving. Do you have enough money saved to qualify for a mortgage and cover your down payment?  Ideally, you should have 20 percent of the purchase price saved as a down payment. Weigh other sources of help for a down payment. Do you qualify for any special mortgage or down payment assistance programs? Check with your state and local government on down payment assistance programs for first-time buyers. Do you have an IRA account where you can use the money you’ve saved to buy your fist home without paying a penalty for early withdrawal?
 

Be Careful With Your Finances. Now is not a good time to make sudden career changes or large purchases. You want to approach your property purchase from a position of financial stability.
 

Check your credit rating and get it in order. Your credit score will have a huge impact on what type of property you can buy and at what price. Obtain a copy of your credit report to make sure it is accurate and correct any errors immediately.

Establish your purchasing power. Meet with a lender who will help you determine which type of financing will work best for you and how much you qualify for with each type. Explore different loan options such as 30-year, 15-year fixed mortgages or ARMs and decide what is best for you. Ask your lender if you qualify for any assistance programs. If you don’t have a mortgage lender, I am happy to suggest lenders with a history of offering excellent mortgage products and services.

Get pre-approved for a loan before you start viewing homes with the serious intention of buying. After a lender examines your current financial situation and credit history, the lender may provide you with a document detailing the amount you can borrow to buy a home. Getting pre-approved can put you in a much stronger negotiating position because it shows the seller that you are a committed buyer, financially capable of buying the property and more likely to close on it.
 

Identify your goals

Location, location, location. Narrow your search before you start touring every house in town. Compile a list of three or four neighborhoods you’d like to live in, taking into account items such as schools, recreational facilities, shopping, dining, public transportation, area expansion plans and safety. Decide what neighborhoods work best for you and your family. For more information on neighborhoods, investment opportunities and market trends, give me a call…I’m here to help!

Take a drive and get to know the neighborhoods which interest you. Drive around to get a feel for what it would be like to own a property in the area and start getting a sense of the properties available in those areas. Contact me to register for automatic e-mail alerts to have available homes sent to you in those target neighborhoods or call to discuss your goals and I will send you homes I have reviewed that might fit your criteria.

Develop your home wish list. The key to the home search process is knowing what you’re looking for. Among other things, that means distinguishing between “must-haves” and “like-to-haves” to help you target your search and define your home preference priorities. List your priorities and prepare to compromise. Make a list of the features you are looking for in a house and rate them on a scale of one to five, with five being a feature you can’t live without. With this wish list and the right market conditions, you are well on the road to finding your dream home.

Contact me to discuss your home-buying goals and dreams. Buying real estate is a complex matter with many factors to consider since no two homes or transactions are alike. Moreover, with all the unique opportunities and potential pitfalls of the current market, it’s more important than ever to contact a real estate professional you trust who will look after your best interests. I can guide you through the property search, financing, negotiation and transaction process with my extensive local market knowledge, experience and track record.

The buying process

Once finances are in order and preparations are out of the way, it is time to find your dream property.

THE SEARCH

We will discuss your budget, location and wish list, and I will send you applicable listings. Select properties that interest you and showings can commence. We will tour potential homes together and as an experienced real estate professional I can provide expert analysis, notice things you might miss, offer insight in the potential long term resale value of the properties you are considering and act as an impartial sounding board.

THE OFFER

Once you have picked out the property you want to purchase, I can help you make an offer and negotiate with the seller. Keep in mind with Denver’s current competitive market that you may not always get the first home you submit an offer on, but I can draft your offer in a way that gives you a potential advantage over another offer. In the contract, we will specify a sale price and also allow the inclusion of clauses specifying various terms of purchase, such as the closing and possession dates, your deposit and other conditions. We will carefully review the contract together to be sure that it accurately express your intended offer. Generally speaking, the seller can accept your offer, reject it, or counter it to initiate the negotiation process until a mutual pending agreement is reached or the negotiations breakdown.

THE AGREEMENT

After the agreement is signed by both parties, you and the seller will be given a timeline to mark every stage in the process of closing the real estate contract. Meeting the requirements on time ensures a smoother flow of negotiations so that each party involved is not in breach of their agreements. During the process I will keep you constantly updated, so you will always be prepared for the next step.

EARNEST MONEY & TITLE

It is standard practice that your earnest money will be due within the first day or two of signing the agreement. In most cases a title company will be selected as a closing agent who will hold the deposit (earnest money) in escrow. The title company  will also research the complete recorded history of the property to ensure that the title is free and clear of encumbrances by the date of closing and that all new encumbrances are properly added to the title. Some properties are subject to restrictions which limit various activities such as building or parking restrictions. There may be recorded easements and encroachments, which limit the rights to use your property. It’s also necessary to purchase Title Insurance for protection in the event of errors in the records or mistakes in the review process.

FINALIZE MORTGAGE

At this point, it’s time to return to your chosen lender to finalize mortgage details such as your down payment, interest rate, regular payment schedule and all other financial conditions associated with the closing. It is imperative that you keep in close communication with your lender, who will let you know when additional documents are needed to approve your loan application and fund your loan.

INSPECTIONS

You will also need to have a licensed property inspector inspect the property within the time frame that was agreed upon in the agreement. You may elect to have different inspectors inspect the property, if you wish to obtain professional opinions from inspectors who specialize in a specific area (eg. roof, HVAC, structure). Depending on the outcome of these inspections, you may request a renegotiation of the terms of the contract after reviewing the property and the papers or you may be ready to move on to the next step.

APPRAISAL

If the agreement is conditional upon financing, then the property will be appraised by a licensed appraiser to determine the value for the lending institution, via a third party. This is done so that the lending institution can confirm their investment in your property is accurate. Appraisers are specialists in determining the value of properties, based on a combination of square footage measurements, building costs, recent sales of comparable properties, operating income, etc. When you are within two weeks of closing, double check with your lender to be sure the loan will go through smoothly and on time.

PROPERTY INSURANCE

If you are obtaining a loan, you will be required by your lender to purchase a certain amount of insurance on the property. The value will depend on the lending institution and the purchase price of the property. You may be able to save hundreds of dollars a year on homeowners insurance by shopping around for insurance. You can also save money with these tips. Consider a higher deductible. Increasing your deductible by just a few hundred dollars can make a big difference in your premium. Ask your insurance agent about discounts. You may be able get a lower premium if your home has safety features such as dead-bolt locks, smoke detectors, an alarm system, storm shutters or fire-retardant roofing materials. Persons over 55 years of age or long-term customers may also be offered discounts. Insure your house NOT the land under it. After a disaster, the land is still there. If you do not subtract the value of the land when deciding how much homeowner’s insurance to buy, you will pay more than you should.

FINAL WALK-THROUGH

More of a formality than anything else, you will be given the chance a day or two before closing to look at the home one last time to make sure it’s in the same condition as when you signed the sale agreement. You can verify that everything included in your purchase is still at the property and that there are no extra items left behind.

CLOSING

The closing agent will furnish all parties involved with a settlement statement, which summarizes and details the financial transactions enacted in the process. You and the seller will sign this statement, as well as the closing agent, certifying its accuracy. If you are obtaining financing, you will have to sign all pertinent documentation required by the lending institution. If you are unable to attend the scheduled closing, arrangements can be made with advanced notice. If you are bringing funds to the transaction, you can elect to either have the funds wired electronically into the closing agent’s escrow account, or bring a certified bank check to the closing in the amount specified on the settlement statement. The settlement will include paying your closing costs, legal fees, property adjustments and transfer taxes. At that point, you’ll receive the property title and copies of all documentation pertaining to the purchase. The seller should arrange to have all property keys and any other important information for you at the closing so that you may receive these items at this time.

Tip: Create a finance folder

Buyers often dread all the paperwork they expect they’ll have to come up with to do their transaction, above and beyond the basic loan application, contract and closing docs.  Start prepping early by creating a finance folder containing all of your important financial documents you will need if you plan to finance your purchase with a mortgage.

Include the following documents in your finance folder:
Financial statements
Bank account statements from the past two months
Investments
Credit cards
Auto loans
Recent paycheck stubs
Tax returns or W-2 forms from the past two years
Copies of leases for investment properties
401K statements, life insurance, stocks, bonds, and mutual account information
Divorce decree if recently single buyers might need to prove that they shouldn’t be held to account for their ex’s separate debts or credit report dings
Gift letter if buyer is using gift money toward their down payment