As some of you may know, my husband AJ and I are not only purchasing our first home together, but we are diving headfirst into building it. Yikes! We are beyond excited to start this chapter of our life! Throughout this buying process, we have been reminded of how complicated and overwhelming being a “buyer” can be.
AJ and I thought long and hard about where we wanted to settle down and make our home together. For us, this was an emotional and exciting process. We definitely considered looking at the foreclosure/short sale market. After all, it is well known that you can get a “great deal” and the buying process has significantly improved in 2011 making it less of a pain (although still a pain, in my opinion) than in 2010.
Our decision about where to buy ultimately came down to location, lifestyle and budget. We first decided that we wanted to live closer to the Tech Center, near both of our offices. We additionally decided our budget did not afford us a custom home in some of the more prestigious neighborhoods south of Denver such as Cherry Hills Village, Buell Mansion, the Preserve or Ravenna (yet!), but that a semi-custom home would be within our means. Every time we would take a day to look at properties, we continually found ourselves driving back to Backcountry, a new home community in Highlands Ranch, located just outside Denver, Colorado and backs to hundreds of acres of open space. For us, it was the feeling we got as we drove through the gate – the kids playing in the street, the parks throughout, the sounds of laughter from the community pool and the hiking and biking opportunities on the trails and the simplified buying process (special shout-out to Austin Ellis, the onsite broker, who was knowledgeable, super friendly and very patient with us!). Although we do not have children (another “yet”!), we felt that Backcountry provides for many of the same luxuries our parents had “back in the day”. We want our kids to be able to ride their bike to their friends’ homes, have neighborhood play dates any day of the week, walk to school, and ride their bikes up to the swimming pool in the summer. And so – we did it! In August we contracted for a home, to be constructed and completed by June of 2012 (no pressure, Austin!).
For me as a real estate agent, going through the buying process has been a great reminder of what it actually feels like to be a buyer. I have to admit, I got a bit emotionally attached at times and found it necessary to remind myself that buying a home is a “business decision”. Ha! Yes, while it is true that purchasing your home is a business decision since it has the potential of being one of your greatest financial investments, it is also true that buying a home is an emotional decision. As AJ & I went through the buying process, I was reminded of some Basic Buyer Tips I hope you find helpful:
GET PRE-QUALIFIED
Initially, BEFORE you begin your home search, you really should meet with a lender. Even if they are not the lender you end up using, they will be able to provide you with your boundaries for your purchase. They should be able to provide you with a MAX of what you would qualify for, a MINIMUM of what you need to have down and an APPROXIMATE mortgage payment based on the current interest rates. Please make sure the monthly mortgage amount they provide you includes PITI: Interest, Principal, Estimated Taxes (an estimate which will vary based on the specific property), and Insurance (again, will vary based on the property). You will have to add in a monthly cost for homeowner’s association dues, if applicable. All of these costs add up. So, the more accurate in your estimates, the better. No one likes surprises! You can get ballpark monthly payment by using a mortgage calculator. However, if you are a more serious buyer, we recommend you speak with a lender. Several of our past clients have worked with, Mo Robinson with On Q Financial. Feel free to give her a call or send her an email. We also encourage you to shop around – various lenders can offer different types of loans at different rates.
ENGAGE A PROFESSIONAL
At first glance, this does not seem imperative, but it is. Dale has been representing buyers and sellers for over 30 years. I have been representing clients for 11 years. We have exceptional experience and take representation very seriously. Your real estate broker (preferably us!) should add value to you and your transaction. Brokers work solely on your behalf, negotiate on your behalf and act as your advocate. They are far more than simply a “tour guide” (it is our opinion that showing houses is the easy part – it’s what happens when a buyer writes an offer that buyer representation becomes critical). Your broker should know the market, have access to information that is not available to the general public, be a skilled negotiator, have deep relationships with inspectors/industry professionals and possess have significant experience in conducting real estate transactions.
BE GRATEFUL AND RESPECTFUL OF YOUR BUDGET
Let’s face it: everyone has one. If you ignore your budget, you will undoubtedly regret it later.
BE FINANCIALLY PREPARED
Yes, this means a down payment. What we used to call “funny-money” (i.e. 0% mortgages or money back at closing) no longer exists. Times have changed and you now must have a significant amount of money down to qualify for a loan (with the exception of FHA financing, which typically requires 3.5% down). In addition, closing costs, inspection costs, furnishings, window coverings, landscaping, title fees, etc., are all additional costs you may expect to incur throughout your buying process. Stretching just to afford your down payment is not the best of all plans – being over prepared is.
DEFINE YOUR PARAMETERS: MAKE A LIST OF YOUR WANTS AND NEEDS
This is YOUR home and it should fit your lifestyle. Think about it and do not be afraid to draw parameters. If you “need” four bedrooms, do not look at homes with three bedrooms. Know how you live, where you want to be relative to your work/family/schools, how you spend your time when you’re inside your home, what the next five-ten years look like for you, etc. These things will help you better determine what you need and what you want in order to live comfortably.
TAKE NOTES
When you and your real estate broker look at properties, look at the big picture first. Rule “in” and “out” certain areas and neighborhoods. Then, for the areas that fit your desires, take photos of each prospective home and the surroundings. Do you like the surroundings and location? What is next door? Across the street? Immediately after leaving the home, rate the home from 1-10, 10 being the highest.
MAKE A SHORT LIST AND RE-VISIT
When you re-visit your short list of homes, your agent, (Dale and myself, of course!!) should call the listing agent to find out the particulars regarding each property. Some of this information may be helpful in your purchasing decision and negotiating position.
MAKE AN OFFER, DO YOUR DUE DILIGENCE, SECURE FINANCING, CLOSE, MOVE-IN, LIVE HAPPILY EVER AFTER
All joking aside – each of these topics merit their individual blog entry … so, of course, stay tuned!
If you have hopes to buy a home in 2012, please give us a call! We welcome the opportunity to help you establish a purchasing plan, to work solely on your behalf and to representing you in your home purchase.
Take care,
April
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