How Much Does Buying a House Really Cost

Down Payment

-It's a huge misconception that you need 20% down. Obviously there are advantages to a bigger DP like a lower payment or lower/no PMI, but the 3-10% range is much more common!

-Min of 3% with a conventional loan

-Min of 3.5% with FHA loan

-0% with VA loan

Closing Costs

-1-2% of purchase price + comprised of the below elements
-Setting up escrow account (pre-payment of 6-12 months of home owners insurance + taxes)
-Title fees (part of closing fee, loan insurance policy, deed + doc recording, etc)
-Loan fees (loan origination cost, credit check fee, appraisal, etc)

Inspection

-General inspection, $300-$500, depending on square footage
-Sewer Scope or Radon add-on, $125-$150
-Other specialty inspections available on case by case basis (structural, mold, etc)

Misc Costs

-Movers
-Immediate renovations/updates
-New furniture
-Emergency fund. Being a homeowner means being responsible if anything needs repair or replacement. Would recommend at least about 5k (tip: buy a home warranty if you want to mitigate the risk of big surprise costs)

Have questions or ready to get started? Send me a message!

Denver Neighborhoods You Should Know About

One of my FAQs during new buyer meetings is for recommendations on additional neighborhoods the buyer should consider in their search...or if there are areas they should know about that have good potential for upcoming growth + appreciation.

Everyone always thinks of the well known neighborhoods, but there are so many other great options that people may not even know about that I love to add on or recommend...and most of them come with friendlier price tags and good potential for growth.

If you like the below neighborhoods, check out these ones too!

Highlands → Edgewater

Berkeley → Regis

Sunnyside → Chaffee Park

Sloans Lake → West Colfax

West Wash Park → Speer + Baker

East Wash Park → Cory-Merrill

Platt Park → Englewood

RiNo → Whittier + Cole

Save this post for your future house hunt, or send me a message if you have q's or are ready to get started.

Everything You Need to Know About Buying

Casually strolling through this ridiculously pretty kitchen to give you some of the most helpful info you’ll need if you’re thinking about buying a house soon! Swipe ⇢ and get more info ⇣

𝗣𝗿𝗲𝗽𝗮𝗿𝗮𝘁𝗶𝗼𝗻 𝗶𝘀 𝗞𝗲𝘆 | Denver’s market moves quick. if you wait til you find a house you love to jump in, you’re already behind the game…and it pretty much never works out. Get pre-approved, and update it later if you want to just casually search.

𝗧𝗶𝗺𝗲𝗳𝗿𝗮𝗺𝗲 | Contract to close is about 1 month. It takes my buyers on average 2 weeks to 2 months to find a house they love and get under contract. Start shopping at least 3 months before you want to move.

𝗖𝗼𝘀𝘁𝘀 | Earnest Money Deposit: 1-2% (deposit only, applied towards down payment + closing costs)
Down payment: 3%+
Closing Costs: 1-1.5%
Inspections: $500-$1,000

𝗧𝗵𝗲 𝗦𝗲𝗮𝗿𝗰𝗵 | Make a list of musts/wants…but be flexible. No house is perfect, and you’ll likely end up compromising on something. Your search will likely evolve and you’ll hone in on what’s most important to you.

𝗖𝗼𝗻𝘁𝗶𝗻𝗴𝗲𝗻𝗰𝗶𝗲𝘀 | Once under contract, you have several opportunities to negotiate with the seller if issues come up. If a resolution cannot be reached, the buyer may terminate the contract + get the earnest money back. Inspection is the biggest contingency to get past.

𝗬𝗼𝘂𝗿 𝗧𝗲𝗮𝗺 𝗠𝗮𝘁𝘁𝗲𝗿𝘀 | Your Realtor + Lender will be a huge part of guiding you through the process, getting your offer accepted + getting you the best deal possible. Do your research + find someone you trust, has a good reputation, experience + will go the extra mile to advocate for you.

Seasonal Buyer Opportunity - Nov 2023

It’s the most wonderful time of the year…for homebuyers. I LOVE November + December for my buyers because that’s usually when we can get the absolute best deals of the year on homes. Why?

⪢ A lot of other buyers are taking their foot off the gas of house hunting with the holiday season (less competition)
⪢ A lot of sellers are ready to move on from the property before the new year (motivated sellers)
⪢ Average days on market are higher than the rest of the year (more negotiation power + more time to think)
⪢ Prices are steady before they historically rise during the busy spring season (great deals to be had)

Of course, buying a house is a big deal and definitely not a one size fits all situation - the BEST time to buy is when it makes sense for the individual buyer. However, if you have any interest in trying to “time the market” this is a great time.

And a few bonus notes:
⪢ Mortgage interest rates have gone down about 1% in the past month (that’s a big deal)
⪢ Inventory levels are great + higher than we typically see in the winter (a lot to choose from)
⪢ Seller credits are still being commonly negotiated (closing costs and/or rate buy downs paid for)
⪢ Now is a great opportunity for contingent, VA, or FHA buyers to purchase without competing

Home Inspection

Aside from getting under contract, the home inspection is one of the biggest steps in the process for both buyers or sellers…here is the rundown on what that looks like!

The Colorado contract allows the buyer to do their due diligence on the home and conduct a home inspection. This usually occurs the first week of the under contract period. The buyer can ask the seller to repair issues prior to closing, ask for a credit to address issues after closing, or if any deal breakers come up, they may terminate the contract at their subjective discretion (and get their earnest money back).

How much a buyer can ask for from a negotiation standpoint really depends on how much leverage each party has in the specific transaction. If it is a competitive house, oftentimes buyers will limit their requests to major issues ahead of time in their offer…and if the seller has other buyers interested in the home, they’re going to be less inclined to do a bunch of repairs. If the buyer has more negotiation power, they can usually ask the seller for more in terms of repairs if the seller doesn’t want to risk losing the buyer and going back on the market.

In general, the goal is to reach an agreement that is fair to both parties as no resale home is perfect. The buyer shouldn’t have to inherit big problems, but they also shouldn’t nit-pick the seller on a million fixes or try to just rack up a big seller credit.

My go-to rule of thumb in determining the reasonableness of a request is to consider if the problem is an issue for any buyer…or just a specific buyer. If any buyer would have an objection to the issue, it should probably be addressed…and if a specific buyer is just asking for a lot, then maybe the seller will push back a bit or the house just isn’t the best fit for them.

Here are some basic inspection objection guidelines on what (imo) typical requests look like in Denver’s market:
✅ structural issues, dysfunctional sewer lines, active water leaks, safety issues (gas leaks, high radon levels)
❌ cosmetic fixes, upgrades, general homeowner maintenance tasks

The Agent You Work With Matters

As someone who works in this industry + sees what happens behind the scenes, this thought crosses my mind all the time. However, for buyers or sellers who are just excited to get started, they probably don’t give it enough credit: 𝘁𝗵𝗲 𝗮𝗴𝗲𝗻𝘁 𝘆𝗼𝘂 𝗰𝗵𝗼𝗼𝘀𝗲 𝘁𝗼 𝘄𝗼𝗿𝗸 𝘄𝗶𝘁𝗵 + 𝗿𝗲𝗽𝗿𝗲𝘀𝗲𝗻𝘁 𝘆𝗼𝘂 𝗺𝗮𝘁𝘁𝗲𝗿𝘀. 𝗔 𝗹𝗼𝘁. It will be one of the most important decisions you make, and can often mean the difference of getting the house you want or losing it…or potentially earning or losing tens of thousands of dollars.

There are a wide variety of characters when it comes to Real Estate Agents. Tbh it’s not that hard to take the classes + get licensed…then they can run their businesses however they want. As a result, you get a lot of people who practice real estate as a hobby, do the bare minimum when it comes to presenting or getting offers for clients, and have terrible communication skills.

Of course you should you find someone that you get along with personally + trust, but here are some things you should look for when choosing an agent.

𝗘𝘅𝗽𝗲𝗿𝗶𝗲𝗻𝗰𝗲 - They should be active in the market, meaning if they haven’t sold a house for several months they probably aren’t aware of what’s happening in the current market or what types of offers + terms are being written. They should be familiar not only with competitive offer strategies, but what options may be when the buyer has more negotiation power.

𝗥𝗲𝘃𝗶𝗲𝘄𝘀 - If an agent has done a good job for clients they have worked with in the past, they will have testimonials to show for it. Find some online, and don’t be afraid to ask for references.

𝗘𝘅𝗰𝗲𝗹𝗹𝗲𝗻𝘁 𝗖𝗼𝗺𝗺𝘂𝗻𝗶𝗰𝗮𝘁𝗶𝗼𝗻 - Do they call the other agent to find out what a great offer would be for the seller + put in the extra effort to build some rapport with the other agent, do they present your offer in the best light possible with a cover letter + lender communication, do they FOLLOW-UP multiple times after submitting an offer to ensure you’re in the best position possible? On a listing, is the agent conveying your priorities + wants…are they even answering their phone? Ask these questions.

Timeline to Purchase

It’s almost the 𝗡𝗘𝗪 𝗬𝗘𝗔𝗥, which means… people are starting to think about those 2023 goals that involve making a move + getting into a new home ✨🏡

Here is what the basic timeframe of a home purchase looks like so you can figure out when it’s best for you to start preparing:

𝗟𝗲𝗮𝗿𝗻 𝗮𝗯𝗼𝘂𝘁 𝘁𝗵𝗲 𝗽𝗿𝗼𝗰𝗲𝘀𝘀 𝘄𝗶𝘁𝗵 𝗮 𝗯𝘂𝘆𝗲𝗿𝘀 𝗺𝗲𝗲𝘁𝗶𝗻𝗴 + 𝗺𝗼𝗿𝘁𝗴𝗮𝗴𝗲 𝗽𝗿𝗲-𝗮𝗽𝗽𝗿𝗼𝘃𝗮𝗹: Less than a week
𝗦𝗵𝗼𝗽𝗽𝗶𝗻𝗴 𝗳𝗼𝗿 𝗮 𝗵𝗼𝗺𝗲: Average for my buyers is about 2 weeks to 2 months, but it totally depends on personal motivation, amount of inventory that matches search criteria + level of competition with the homes interested in
𝗨𝗻𝗱𝗲𝗿 𝗰𝗼𝗻𝘁𝗿𝗮𝗰𝘁 𝗽𝗲𝗿𝗶𝗼𝗱: Average is about 4 weeks, but could be shorter or longer depending on buyer/seller preference + contract negotiation

𝗦𝗼, 𝗶𝗳 𝘆𝗼𝘂𝗿 𝗴𝗼𝗮𝗹 𝗶𝘀 𝘁𝗼 𝗯𝗲 𝗶𝗻 𝗮 𝗻𝗲𝘄 𝗵𝗼𝗺𝗲 𝘁𝗵𝗶𝘀 𝘀𝗽𝗿𝗶𝗻𝗴, 𝘁𝗵𝗲 𝘁𝗶𝗺𝗲 𝘁𝗼 𝘀𝘁𝗮𝗿𝘁 𝗽𝗿𝗲𝗽𝗮𝗿𝗶𝗻𝗴 𝗶𝘀 𝗿𝗶𝗴𝗵𝘁 𝗮𝗯𝗼𝘂𝘁 𝗻𝗼𝘄!

And, here is a fantastic bonus tip - you don’t make your first mortgage payment until the month following the month after you close, which can be super helpful when determining financial comfort level with any overlap in a current lease + a new home, or you could even go a month or two without a house payment!

𝗛𝗲𝗿𝗲’𝘀 𝗮 𝗽𝗿𝗮𝗰𝘁𝗶𝗰𝗮𝗹 𝘁𝗶𝗺𝗲𝗹𝗶𝗻𝗲 𝘁𝗼 𝗰𝗵𝗲𝗰𝗸 𝗼𝘂𝘁:
🤓Dec • Schedule a new buyers meeting + get pre-approved
🏡Jan • Start house hunting
📑March • Make an offer + go under contract
🔑April • Close on your new home
💵June • Make your first mortgage payment

Price Reductions + Seller Credits

The most recent Denver market stats report shows that average days on market are up to 20 and the list to sales price ratio has dropped below 100 for the first time since July 2020 and currently sits at 99.41%…these numbers are a little 🤓 but basically mean it’s a great time to buy a home compared to the 3 DOM and 110%+ we frequently saw this spring and over the past couple years.

If a house has been on the market for a bit and is not competitive, buyers have a great opportunity to try and get a ✨𝗗𝗘𝗔𝗟 The first assumption people make is that they should negotiate down the purchase price. However there are several options to consider depending on what is most important to the specific buyer:

𝗣𝗿𝗶𝗰𝗲 𝗥𝗲𝗱𝘂𝗰𝘁𝗶𝗼𝗻: If you buy a house for a lower price, this is great in the long term because you’ll have more equity in the home. However, every 10k in purchase price only makes about a $50 difference in your monthly payment

𝗦𝗲𝗹𝗹𝗲𝗿 𝗖𝗼𝗻𝗰𝗲𝘀𝘀𝗶𝗼𝗻 𝗮𝗽𝗽𝗹𝗶𝗲𝗱 𝘁𝗼𝘄𝗮𝗿𝗱𝘀 𝗰𝗹𝗼𝘀𝗶𝗻𝗴 𝗰𝗼𝘀𝘁𝘀: The seller can credit the buyer up to the amount of closing costs and pre-paid items, which is usually about 1-1.5% of the purchase price. The buyer in turn can keep this amount of cash in their pocket instead of using it at closing…and could save it or use it for immediate updates, new furniture, etc.

𝗦𝗲𝗹𝗹𝗲𝗿 𝗖𝗿𝗲𝗱𝗶𝘁 𝘁𝗼 𝗹𝗼𝘄𝗲𝗿 𝘁𝗵𝗲 𝗶𝗻𝘁𝗲𝗿𝗲𝘀𝘁 𝗿𝗮𝘁𝗲: A buyer has the option to lower their interest rate by purchasing points. Points are pre-paid interest on the loan, and by having the seller give a credit to purchase them, a buyer can lower their interest rate over the life of the loan, and in turn lower their monthly payment.

Of course price is just one aspect of an offer - we’re also seeing buyers having the power to negotiate some good inspection items + having their appraisals come in high (𝗜𝗻𝘀𝘁𝗮𝗻𝘁 𝗘𝗾𝘂𝗶𝘁𝘆!), which are also fantastic!

Market Opportunity - July 2022

I wrote a post a couple months ago as mortgage rates started to tick up, and how that actually might have a positive impact on our market. Here’s a little update and a 𝗵𝘂𝗴𝗲 𝗣𝗦𝗔 𝗜 𝗵𝗮𝘃𝗲 𝗳𝗼𝗿 𝘄𝗮𝗻𝘁-𝘁𝗼-𝗯𝗲 𝗗𝗲𝗻𝘃𝗲𝗿 𝗵𝗼𝗺𝗲 𝗯𝘂𝘆𝗲𝗿𝘀.

Now that we’re in the middle of the sweet summertime and I’ve had a chance to relax over a few margaritas, I’ll shoot you straight - the recent spring real estate market in Denver was BRUTAL. Fierce competition and offers 10/50/100k+ over list price, full appraisal gap coverage, as-is purchases with no inspection repairs, and several other tricks to net the seller just a bit more money were the norm. Most buyers wrote a handful of offers before getting one accepted, searched way under max budgets, and ultimately made a lot of sacrifices to get a home. I wrote SO MANY offers that never got accepted. The buyers I worked with had no choice but to be extremely determined and so resilient. Denver’s market was uncontrollably on fire and to be honest, for the long-term health of it, we needed something to cool it down.

𝗦𝗼 𝘄𝗵𝗲𝗿𝗲 𝗮𝗿𝗲 𝘄𝗲 𝗮𝘁 𝗻𝗼𝘄? The combination of a little more inventory and slightly higher interest rates have put a damper on buyer demand. Some buyers are priced out, some are “waiting for rates to get better,” some are resigning leases and will give away tens of thousands of dollars for another year. I’m very adverse to sounding salesy, but I just want scream from the rooftops the amazing 𝗢𝗣𝗣𝗢𝗥𝗧𝗨𝗡𝗜𝗧𝗬 that is happening right now. Buyers are getting houses for list price or under, appraisal waivers, inspection requests, walking into instant equity…and even getting seller credits for their closing costs or to 𝗯𝘂𝘆 𝗱𝗼𝘄𝗻 𝘁𝗵𝗲𝗶𝗿 𝗶𝗻𝘁𝗲𝗿𝗲𝘀𝘁 𝗿𝗮𝘁𝗲 to lower their monthly payment.

Those wanting to take advantage of an FHA or VA loan, get an offer accepted contingent on selling a current home, first-time buyers without a ton of extra cash…or really anyone who wants to get a 𝗚𝗢𝗢𝗗 𝗗𝗘𝗔𝗟, now is the time. There are so many great houses out there + this is the most buyer-friendly market we’ve seen in years.

Interest Rates are High...But Calm Down

As if people’s love for telling Denver home buying horror stories wasn’t enough, now we have rising interest rates adding fuel to the fire.

Obviously no one loves paying interest, and the biggest downside is that a higher interest rate will affect your monthly mortgage payment and the total amount you can qualify for. But, most people buy a home because it’s the right time for them personally, and not because they’re trying to time the market…so don’t let it deter you from making an amazing long term investment sooner than later. Here’s my two cents on current mortgage rates + a few things to consider…

• It’s more important now than ever to work with an experienced + honest lender who will keep you informed of changes throughout the buying process and not try to bait and hook you by promising a low rate at the pre-approval stage just to give you an accurate market rate once you’re under contract.

• In reality, most homebuyers live in their homes for 3-7 years, so try to stop looking at mortgages like you’re going to pay it for a full 30 years. If you’re there a handful of years, or longer, chances are rates will dip at some point and you’ll be able to refinance at an opportune time to lower your monthly payment.

• The impact on buyer affordability could help offset some of the demand in our market, which would be so welcomed by many. We’ll see how this plays out in the upcoming months, but I’d 100% rather buy with a higher rate for a better purchase price…than pay 100k more for a house just because rates are low and the monthly payment is fine (*ahem* 2020).

• Regardless of where rates are at, prices are anticipated to continue to rise (albeit hopefully at a lower more sustainable level than we’ve seen the past two years), so the cost of waiting is substantial, and it’s important to take the big number of your purchase price into consideration from a long term investment point of view.

Buyer Fatigue

Let’s talk 𝗯𝘂𝘆𝗲𝗿 𝗳𝗮𝘁𝗶𝗴𝘂𝗲

The Denver market is always tough…but the early spring frenzy of new year excitement, high buyer demand, trying to beat rising interest rates, and sellers who aren’t quite ready to list have made things more challenging…and we’re all feeling it.

This is what we’re seeing ➡️
• Double digit offers
• Places selling 10%+ over list price
• Buyers offering appraisal gap coverage, limiting inspection repairs, free post-occupancy agreements, paying seller costs, etc

So if you want to buy, what’s the solution…Wait for things to “calm down?” Sign a lease for a year and watch values to go up 10%+, disregard basic rules of supply and demand + think somehow prices are going to drop despite the fact that there are dozens of buyers willing to pay a premium for the same house?

My advice ➡️ 𝘀𝘁𝗮𝘆 𝘁𝗵𝗲 𝗰𝗼𝘂𝗿𝘀𝗲. Yes, it might be hard…but so are most things in life that are worthwhile.

Here are a few tips on finding a house this spring, and not burning out in the process:

𝗦𝘂𝗯𝗺𝗶𝘁 𝗼𝗳𝗳𝗲𝗿𝘀 𝘁𝗵𝗮𝘁 𝘆𝗼𝘂 𝗵𝗮𝘃𝗲 𝗮 𝘀𝗵𝗼𝘁 𝗮𝘁 𝗯𝗲𝗶𝗻𝗴 𝗰𝗼𝗺𝗽𝗲𝘁𝗶𝘁𝗶𝘃𝗲 𝗼𝗻. If other offers are tens of thousands higher or have aggressive terms you don’t want to play with, let it go
𝗕𝗲 𝗿𝗲𝗮𝗹𝗶𝘀𝘁𝗶𝗰 𝘄𝗶𝘁𝗵 𝘆𝗼𝘂𝗿 𝗽𝗿𝗶𝗰𝗲 𝗿𝗮𝗻𝗴𝗲 + 𝗲𝘅𝗽𝗲𝗰𝘁𝗮𝘁𝗶𝗼𝗻𝘀. If houses you like are starting in your budget and skyrocketing out of it, adjust your price point focus + reconsider expectations on the type of house you can afford
𝗥𝗲𝗲𝘃𝗮𝗹𝘂𝗮𝘁𝗲 𝘆𝗼𝘂𝗿 𝗻𝗲𝗲𝗱𝘀/𝘄𝗮𝗻𝘁𝘀. Can you broaden locations? Do you have to have a 2nd bathroom? Could a TH/condo be a good fit? Can you do updates yourself?
𝗔𝗽𝗽𝗿𝗼𝗮𝗰𝗵 𝘆𝗼𝘂𝗿 𝘀𝗲𝗮𝗿𝗰𝗵 𝗱𝗶𝗳𝗳𝗲𝗿𝗲𝗻𝘁𝗹𝘆. Instead of looking at the hot new listings, browse places that have made it through the first weekend or have been sitting with no movement
𝗕𝗲 𝗮𝗴𝗴𝗿𝗲𝘀𝘀𝗶𝘃𝗲 𝘄𝗵𝗲𝗻 𝘆𝗼𝘂 𝗳𝗶𝗻𝗱 𝗮 𝗽𝗹𝗮𝗰𝗲 𝘆𝗼𝘂 𝗹𝗼𝘃𝗲. If you want to play the competitive house game, you’re not going to feel like you’re getting a deal, you're going to feel like you’re giving up a lot. Come to terms with that + determine your comfort level with crafting competitive offers

Selling + Buying

The approach you take when it comes to selling your current home + buying a new one during the same time frame comes down to your flexibility in regards to finances + convenience, knowing the options for your specific situation, and deciding which approach makes sense for you. Here are some common options:

𝗕𝗨𝗬 𝗕𝗘𝗙𝗢𝗥𝗘 𝗦𝗘𝗟𝗟 | If you’re able to carry the mortgage on your current home + qualify for a new mortgage, and have funds available for the down payment on your new home without needing to utilize proceeds from your sale, this option offers the most convenience. You can shop without being on a time frame, then list your current home as soon as you get UC so you don’t have an overlap in mortgage payments or later after you move into your new place.

𝗦𝗘𝗟𝗟, 𝗧𝗛𝗘𝗡 𝗕𝗨𝗬 | If you want to use proceeds from your sale towards the down payment on your new home or want to maximize purchasing power by qualifying for one mortgage, this option offers the most financial flexibility, but puts pressure on you to find a new home. You could request a post-occupancy agreement to give yourself an extra couple months to house-hunt, or have a short-term plan to stay somewhere else while you’re in between homes.

𝗠𝗔𝗞𝗘 𝗔𝗡 𝗢𝗙𝗙𝗘𝗥 𝗖𝗢𝗡𝗧𝗜𝗡𝗚𝗘𝗡𝗧 𝗢𝗡 𝗬𝗢𝗨𝗥 𝗛𝗢𝗠𝗘 𝗦𝗘𝗟𝗟𝗜𝗡𝗚 | This sounds like a great idea, but it’s very difficult to get a contingent offer accepted in the current market if the house you want is a new competitive first-weekend listing. There are various degrees of this contingency:
•Your house isn’t even on the market and still needs to be listed
•Your house is listed but not UC
•Your house is UC but isn’t past inspection
•Your house is UC and closer to closing.
The further you are in this sequence, the stronger your contingent offer will be…however a contingency is sometimes a deal-breaker for sellers looking for a quick close or a high degree of certainty, and most sellers will likely want a significantly higher offer price and/or aggressive contract terms to take on the risk of a contingency due to the domino effect it creates in everything going right in the multiple transactions.

Costs of Buying

So, you want to buy a house…the first expense that likely comes to mind is your down payment. And while that is a big chunk of change, there are other costs to account for when saving money for a new home search. My philosophy has always been for buyers to be as prepared as possible before diving in and a huge aspect of that is accurate + realistic expectations on the financing side of things…so here is what you can plan on:

+ 𝗘𝗮𝗿𝗻𝗲𝘀𝘁 𝗠𝗼𝗻𝗲𝘆. Typically 1-2% of the purchase price, and the minimum amount is set by the seller/listing agent. This is due within a few days of going under contract, and is a good faith deposit to show that you are serious about the purchase and have some skin in the game. This is not any additional cost, as it is applied towards your down payment + closing costs at closing.

+ 𝗜𝗻𝘀𝗽𝗲𝗰𝘁𝗶𝗼𝗻𝘀. Inspection fees are paid directly to the Inspector at the time of the service. The cost will depend on the square footage of the home, and any additional inspections you choose to add on (sewer, radon, structure, etc). Expect to be in the ballpark of $500-$600 on average.

+ 𝗗𝗼𝘄𝗻 𝗣𝗮𝘆𝗺𝗲𝗻𝘁. Minimum DP on a conventional loan is 3%…but many buyers choose to do more. Your down payment will affect your monthly payment, interest rate + mortgage insurance. In addition to those considerations, evaluate how important it is to have cash in hand vs invested in a home. Your lender should show you several options so you can make the best decision for your specific situation.

+ 𝗖𝗹𝗼𝘀𝗶𝗻𝗴 𝗖𝗼𝘀𝘁𝘀. The majority of this amount will be setting up an escrow account to pay for your annual taxes and homeowners insurance. You will also have various fees like an appraisal fee, a loan origination fee, a title closing fee, county deed recording, etc. Your lender should give you a very close estimation for this so there are no surprises, but generally they total about 1-2% of the purchase price.

My recommendation is to chat with a lender sooner than later so you can find out what your options are and save money + plan accordingly!

Appraisal Gap Coverage

Appraisal gap coverage seems to be the theme of getting offers accepted in the 2021 Denver market. So what exactly is it, and why does it make an offer more appealing?

Right now about 85% of homes sell over list price with multiple offers. When a buyer offers over list, there is always a question of if the home will appraise at that price or not. An appraisal is an official valuation of the home and is required by the mortgage lender. A buyer is only able to get a loan for the appraised value that the appraiser determines.

With a financed offer, the appraisal is an important consideration to a seller because if a buyer offers over list, they want to ensure they will get all of their proceeds from that agreed upon purchase price, and not have to renegotiate or lower it if the appraisal comes up short.

Appraisal gap coverage can be written into an offer by a buyer and shifts the risk of a low appraisal from the seller to the buyer. It says 𝗶𝗳 the appraisal comes in lower than the purchase price, then the buyer will cover a set amount or the full amount of a 𝗽𝗼𝘁𝗲𝗻𝘁𝗶𝗮𝗹 gap between the appraised value and the purchase price in 𝗰𝗮𝘀𝗵 𝗮𝘁 𝗰𝗹𝗼𝘀𝗶𝗻𝗴. 

Say for example you have a house listed at 500k and the following offers:

• 525k w/ full 25k gap coverage

• 525k w/ partial (5/10/15/20k) gap coverage

• 525k w/ no gap coverage

Even w/ the same purchase price, the offers go from strongest at the top to least at the bottom in a seller’s eyes.

I’m the first to admit I don’t love gap coverage when representing buyers...but there are a few considerations to make:

• It may be necessary to be competitive and win a home

• Look at the long term investment/projected appreciation of the home + how long it would take to recoup that value

• It is a calculated risk + value isn’t black and white. Even when paying over list, if there is supporting data the home may appraise at the purchase price just fine, making the gap coverage a non-issue 

Sound like a lot? Buying + selling such a big investment definitely can be confusing...which is why you have someone help guide you through the process + your options! Questions? Send me a text or email!

Preparation is Key

It seems to happen fairly often - someone stumbles across a house that is so ✨AMAZING✨ it motivates them to jump into action. I get a text or a DM asking to go check it out. SUPER EXCITING - I love when people reach out wanting to buy a house!

But then the reality check of the Denver market sets in… 

The truth is by the time you stumble across that unicorn listing in your late-night Zillow browsing, handfuls of other buyers have already seen it…their agents have already scheduled showings…and they’re ready to pounce with their pre-approvals in hand + strategies made about the offers they will submit…if there aren’t already multiple offers on the table. You’re behind the curve…and sadly these scenarios almost never work out!

DENVER MOVES QUICK. If you want to successfully find a home with as little stress as possible, you need to be PREPARED so by the time that great house comes up, you're ready to make some moves. I equate Denver’s real estate market to a river with white water rapids - you can’t really dip your toes in and go for a leisurely swim…you’ve gotta have your gear ready, a plan in place, and a pretty good boat if you want to have an enjoyable experience! 

Here's what that looks like:

• MEET WITH A REALTOR SOONER THAN LATER. Get a realistic idea of the market, what the buying process looks like, get all your questions answered + put a plan in place. Get an MLS search set up so you're the first to know when new places list.

• GET FULLY PRE-APPROVED. Know what you can qualify for, how a comfortable monthly payment translates to a purchase price, and have a shiny official pre-approval letter in hand. Homes selling a decent amount over list price is the norm…that means the list price is often just the beginning, and you also have to factor in extra considerations like how much more you’d be willing to pay for the home, appraisal gap coverage + covering seller fees in order to be competitive…and understanding how all that affects your loan, down payment, and cash at closing.

Sound like a lot? It kind of is. And that’s why you have someone to guide you through the process. Have questions, or thinking about getting started…sooner or later…send me a text or email!

Buying in the Current Market - Aug 2021

2021 has been a challenge for home buyers, and anyone who tell you otherwise is prob lying 🙃...It has been a constant evolution of adjusting to new market norms + staying on top of current trends in order to advise clients on writing winning offers. If you’re thinking about getting started on the house hunt (which I still recommend vs waiting bc prices are only going ⬆️)...here a few tips:

SET REALISTIC EXPECTATIONS IN THE CURRENT MARKET • Year over year appreciation is up 15%. To put that simply, you can’t buy the same house as you could last year for the same price. Low interest rates do help with affordability, but get familiar with what inventory in your price range looks like NOW, not what it looked like in the summer, fall, or even winter of 2020.

BE WILLING TO SACRIFICE SOME WANTS + SEE THE POTENTIAL IN SPACES • Its better to start somewhere than wait forever for a perfect unicorn house. Do some deep digging into what your absolute NEEDS are, and let the long wish lists go. Be open to adding your own changes too - updating a bathroom or kitchen is a heck of a lot cheaper than paying tens of thousands over list price on a house. 

BE AGGRESSIVE FOR A HOME YOU REALLY WANT • Unfortunately you’re probably not going to feel like you’re getting a deal. You’re likely going to have to concede a lot to a seller + look at the long-term investment aspect of things. Stay within your comfort zone, but don’t have regrets about losing a great house over a couple thousand dollars.

LET GO OF THE BIDDING WAR HOMES • You know the ones...they look like they could have their own Pinterest page, hundreds of showings booked solid through the weekend, offers 100k+ over list price...Unless you HAVE.TO.HAVE.IT and are willing to overpay a bit + waive basically all of your buyer rights, most of the time it’s just not worth it.

KEEP A POSITIVE ATTITUDE • It is tough at times, can be so disappointing when a offers don’t get accepted, and overall it’s a very emotional process. But, with some perseverance, it always works out in the end!

Questions or want to get started? Send me a text or email!

Buying a Home in a Tough Seller's Market

Well, secret’s out - Denver is a great place to live! Combine significant population growth in recent years, millennials entering the housing market, COVID making people realize home is more important than ever + historically low interest rates...and we’ve got lots of buyers with not enough houses to go around. Here are a few tips to consider to help you get under contract on a place you love:

GET A THOROUGH PRE-APPROVAL WITH A LOCAL LENDER • The solidity of your financing is going to be a huge consideration of sellers. Local lenders have the best reputation and listing agents also want someone they can contact directly (usually on weekends/evenings) to advocate for you, so availability is key

BE FLEXIBLE ON PRICING • It’s super common right now for homes to go under contract within just a few days, with multiple offers, for over list price. Focus your search about 10-30k under your max budget so you have some wiggle room if you need to be competitive

OFFER THE SELLER CONVENIENCE WITH TIMING • Be open to closing quick...or possibly offering the seller a post-closing occupancy agreement in case they want to stay in the home a little longer after closing 

ADD SOME COMPELLING TERMS TO YOUR OFFER • Limit post-inspection requests to major issues...give the seller reassurance you’ll cover all or part of an appraisal gap if there ends up being one...escalate your offer price if competing offers are on the table

GET A REALTOR WHO WILL WORK HARD FOR YOU • Setting you up on a home search and opening doors for showings are the bare minimum of what your agent should do for you. They should establish consistent communication with the listing agent on the home you’re interested in, gather info + give advice and strategy on crafting a winning offer, and be your #1 advocate conveying that you’re the best buyer for the home!

Have questions? Send me a text or email!

What to Do Now if You Want to Buy or Sell Soon

𝗜𝘀 𝗺𝗮𝗸𝗶𝗻𝗴 𝗮 𝗺𝗼𝘃𝗲 𝗼𝗻𝗲 𝗼𝗳 𝘆𝗼𝘂𝗿 𝗡𝗲𝘄 𝗬𝗲𝗮𝗿𝘀 𝗿𝗲𝘀𝗼𝗹𝘂𝘁𝗶𝗼𝗻𝘀? Well, 2021 is just a few days away...so here are a few things you can do to make your goal a reality!

𝗕𝗨𝗬𝗘𝗥𝗦

𝗟𝗲𝗮𝗿𝗻 𝗮𝗯𝗼𝘂𝘁 𝘁𝗵𝗲 𝗺𝗮𝗿𝗸𝗲𝘁 + 𝘁𝗵𝗲 𝗯𝘂𝘆𝗶𝗻𝗴 𝗽𝗿𝗼𝗰𝗲𝘀𝘀. Denver moves fast + is competitive. In order to set yourself up for success, you have to PREPARE + be ready to go when a home you love comes up. If you wait til after you find the perfect house, you’re already behind the game + another buyer will probably swoop on it before you can get things lined up! Let’s jump on Zoom call so I can walk you through the steps in the process + get you a buyers packet so you can be fully informed!

𝗙𝗶𝗴𝘂𝗿𝗲 𝗼𝘂𝘁 𝘆𝗼𝘂𝗿 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗻𝗴 𝗼𝗽𝘁𝗶𝗼𝗻𝘀. You need to know what you qualify for so you can search in the right price range + you definitely can’t make offers until you’re fully pre-approved. If you do this early, a lender can advise if there’s any way you can improve your credit and let you know what you need to save.

𝗦𝗰𝗼𝗽𝗲 𝗼𝘂𝘁 𝗻𝗲𝗶𝗴𝗵𝗯𝗼𝗿𝗵𝗼𝗼𝗱𝘀. Browse online, but also drive around and get a feel for areas you like + may want to live in. This will help you narrow things down when you’re ready to start house-hunting! 

𝗦𝗘𝗟𝗟𝗘𝗥𝗦

𝗖𝗵𝗲𝗰𝗸 𝗼𝘂𝘁 𝘁𝗵𝗲 𝗻𝘂𝗺𝗯𝗲𝗿𝘀. Have a Realtor prep a CMA so you know what your home is worth (don’t trust online estimates!) and a Net Sheet to show you what your proceeds could be. If you’re planning to sell + buy, chat with a lender to see what your financing options are in regards to having a contingency, securing a bridge loan, or buying first then selling.

𝗚𝗲𝘁 𝗮 𝗷𝘂𝗺𝗽 𝗼𝗻 𝘀𝗽𝗿𝗶𝗻𝗴 𝗰𝗹𝗲𝗮𝗻𝗶𝗻𝗴: 𝗱𝗲𝗰𝗹𝘂𝘁𝘁𝗲𝗿, 𝗽𝗮𝗰𝗸, 𝗮𝗻𝗱 𝗱𝗼𝗻𝗮𝘁𝗲. Store items you won’t need anytime soon + get rid of anything you wouldn’t take with you in a move. Organize closets and “catch all” spaces too.

𝗗𝗲𝗲𝗽 𝗰𝗹𝗲𝗮𝗻. This is a must. Buyers don’t like funky smells, dusty corners, and dirty walls/baseboards that you probably don’t even notice. If you’re not up for it, it’s worth hiring a professional!

Have questions or want to get started? Send me a text or email!

Paying Over List Price

Alright, it’s no secret that Denver’s real estate market is 🔥

When you’re buying a house, it would be fantastic if you can negotiate a great deal on purchase price...or even if you can just write a straightforward clean list-price offer. However, in a market where inventory is extremely low and demand is crazy high, the result is buyer competition, and subsequently often offers over list price.

We have just over 5,000 active listings in all of the Denver area. This is about 1/6th of the amount we’d need to have a balanced market (🤯). Colorado is a great place to live...and a lot of people want to put down roots here. Here are a few reasons that it may make sense to pay over list price in order to stake your claim on Denver real estate:

LIST PRICES AREN’T BLACK AND WHITE • They’re based on the listing agent and the seller’s opinion of the value. Ultimately a home is worth what a buyer is willing to pay for it. If there’s market demand that says a home is valued higher than perhaps it is.

YOU MIGHT HAVE TO • If a home is popular and has multiple offers, it may be necessary in order to have a fighting chance of a seller accepting your offer over another.

THE COST OF WAITING OUTWEIGHS THE HIGHER PRICE TAG • Historically in Denver, homes appreciate in value (typically it’s in the range of 2-5% a year, but this year it’s been upwards of 7%). That means the cost of the exact same home today will likely be thousands more next spring/summer. If you pay over list for a home now, it will likely recoup that value in the upcoming months anyway. If you’re planning on owning for a few years, the investment can make sense.

INTEREST RATES ARE SUPER LOW • Like crazy low. That can make the difference of tens of thousands of dollars in purchasing power. They’re not expected to last forever, which is why so many people are taking advantage of them. A lower rate can offset a higher price and keep your monthly payment the same.

Ultimately, as much as competition breaking into the market might not be ideal for a buyer...it’s a great thing to own property in a place like Denver that’s a desirable place to live with stable home values + consistent appreciation!

Q’s? 👇

Starter Homes

So I’ll be the first to admit, most of the listings I share are Pinterest-worthy dream homes...why? Simply because I love some good home inspo and they’re fun to look at!

However, then it comes to real estate as an investment, and especially first-time homebuyers, I am a HUGE fan of starter homes! Check out why below ⇩

YOU’LL GET A BETTER DEAL • Homes that need a little bit of work or cosmetic updates are going to be priced much more affordably than something super updated

LESS COMPETITION • If a house has a gorgeous updated kitchen or some trendy finishes, it’s going to get a ton of interest. Lots of interest means it’s likely to get multiple offers and have several buyers competing to get it...which in turn drives the price up

YOU CAN MAKE IT YOUR OWN • Cosmetic updates are inexpensive + often easy to DIY. Painting walls or cabinets, updating fans + light fixtures, getting new hardware or doorknobs, or replacing old trim is SO easy...and you can choose everything to fit your own style. If you need to bring in a professional to add some trendy subway tile, or another more skilled project, you can still do that on a budget

YOU’LL GET MORE RETURN ON YOUR INVESTMENT • If you do a little work on your own you’ll build some “sweat equity,” and any updating you do in general will add value to your home. At the same time, you’ll be paying down your mortgage principal and your home will likely be appreciating in value. All of this builds wealth, and when it comes time to sell, you’ll see bigger proceeds

IT’S NOT FOREVER AND IT DOESN’T HAVE TO BE PERFECT • Most people live in their first home for 3-7 years...then they capitalize on their investment by selling and “moving up” into a bigger home or their forever home. Even if you start in a condo or townhome, you will be investing in yourself and building equity. When it comes time to sell, many people then have tens (or hundreds) of thousands of dollars to use towards a new down payment and can easier afford that “dream home!”

Thoughts or questions? Share in comments!