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Home Buyers Guide

Posted at 06/30/2017 11:43 AM by Pat O'Connor

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There has never been a better time to buy a home. So if you haven’t already started looking, it’s time to get in the game and start looking. Why?

Real estate has traditionally been one of the safest and most profitable investments one can make and recent data supports that trend.

According to Forbes Magazine, both S&P and real estate markets have had a great recovery since the Great Recession (2008-2009). The investment return on real estate was 11.37 percent, just under that of the S&P’s 12.65 percent (Dec. 31, 2010 – Dec 30, 2016). Zillow reports that half of first-time home buyers in the United States are under 36 and first-time buyers make up 47 percent of all property sales.

In Denver, there will most likely be a surge in opportunity to buy new condominiums with the passage of the construction defects law, signed by Governor Hickenlooper in May 2017. There has also been a uptick of interest in freshly minted homes in new housing developments. Regardless of whether you are interested in a single family home or a condo, acquiring home buying information should be on the top of your “to do list.”

Below you will find some of the most compelling reasons to get out of the rental pit and into the home buying process. Once you understand why it’s important to buy a home now, Usaj Realty will be able to guide you through the process with its downloadable home buyers guide. This home buying guide goes step by step through the purchasing process and outlines what you can expect. After you read it, a Usaj Realty broker will sit down with you and go over any questions you have and explain the process more in-depth! Call us today at 720-398-2999 and we will connect you with one of our amazing brokers.

Here is why you should consider buying a home:

We are still experiencing historic low interest rates and this alone is reason enough to buy a home. This really is a no brainer. Right now, you can find interest rates below 3.75%. As interest rates rise, the value of the home you can afford to purchase decreases. Roughly, with every quarter of a percent interest rate increase, you are able to afford 2.5% less home. If today you are able to afford a $400,000 home at a 4% interest rate, when interest rates increase to 5% you'll only to be able to afford a $360,000 house at your current income.

Buying a home is a great investmentHome prices in the Denver metro area have increased over 10.5% since 2016. That is a big increase in not only pricing but the value of home ownership. It’s important to think long term with home ownership and think of it as the savings account that your parents insisted you have. Additionally, buying a home and renting it out is a great tool to earn additional income.

Denver offers great transportation options for getting in and out of the city. Even if you can’t find a home in the city of Denver, the outlying metro area offers a number of housing options that are close to the RTD light rail and bus lines. Being close to public transportation makes accessing all the the city has to offer incredibly easy and convenient. In many cases, you can get from the suburbs to downtown Denver in less than 20 minutes and not have to deal with parking or traffic. Whether you buy a home downtown or in the suburbs, it’s likely a bus connection or light rail station is going to be nearby to take you to your desired location in the Denver metro area.

Owning a home provides you a great opportunity to gain equityWhen you rent, you are not investing in anything except your landlord’s portfolio. Owning a home is a great investment and what you save on your taxes is significant. The value of a home typically rises at least 2 percent per year; in Denver, many homes are valued 50 percent higher than they were 10 years ago! Building equity (the difference between your home’s value and how much you owe your mortgage lender) in your home is an easy way to invest towards your retirement or future home improvement projects. Once you buy a home, you may consider refinancing if interest rates drop or obtaining a home equity line of credit to add value to your home.

The days of requiring a 20% downpayment are long gone. Most lenders now have many low down payment options available. Some of these require as little at $2,000 down which is probably close to what you are paying in rent. It takes only an hour appointment with a qualified lender to determine what kind of house you can afford. Even if you can’t afford to buy a house now, a lender can help you plan for the future and map out the necessary steps to get you qualified in the future.

How to Buy a Home in Six Steps

Now that you’ve decided to find your dream home, here are the next steps of your journey can be found in the “Home Buyers Guide.” This manual by Usaj Realty helps people prepare for the purchasing experience and lessen the unknowns. A few of the highlights include:

home buyers guide - get preapproved

1. Pre-approval

Sounds scary doesn’t it? But the most frightening aspect of this first step is steeling yourself and getting the necessary documents and paperwork in order. Be prepared to show an ID, tax returns, pay stubs, bank statements including checking, saving, brokeragestatements, 401K, IRAs, Roth, etc.

It’s critical to show all sources of income as well as financial obligations such as child support and maintenance. Assuming all the documents are in order, the pre-approval process goes pretty quickly and best of all, will help you determine how much you will be able to spend on a home.

home buyers guide - meet with a broker 

2. Meet with a Broker

It’s natural to go online and start looking but to make it happen, it’s advisable to hire a professional. An experienced, reputable and trustworthy real estate agent is worth having by your side when you get ready to make what will most likely be the biggest purchase of your life. The knowledge they possess of the local market and their ability to zero in the properties that will be best suited for you is worth the time and effort you’ll save yourself. Their commission comes from the sale price of the home soyou pay nothing and get all the benefits. Usaj Realty brokers are carefully selected and offer “white glove service.”

Before you go on showings it’s important to be thinking about what your perfect house would look like: Single-family home or condo? How many bedrooms and bathrooms? Ranch or multi-story? Do you need a yard? Is public transportation important to you? If you have children, how is the local school ranked? What kind of neighborhoods do you like?

home buyers guide - search for homes

3. Search for Homes  

Once you and your Usaj Realty broker have found a potential fit, it is time to go and view the property. Consider the following details while you’re touring and what aspects you like, dislike or would want to upgrade:

  • Exterior condition Patio, balcony and/or yard
  • Interior condition Floor plan; AC and heating systems
  • Garage
  • Laundry room
  • Kitchen appliances
  • Bathroom fixtures
  • Bedroom size 
  • Master bedroom/bathroom

Once you see the first couple of properties, you’ll have a better sense of what’s really important to you and what things you can let slide. Your broker should be asking you lots of questions and be pointing out specific qualities/drawbacks of each house you visit. It will help you to narrow down the parameters and be able to focus on your needs.

home buyers guide - make an offer

4. Making an Offer

You’ve found the “right one” and are ready to make an offer. This is where the experience of your broker will pay off. Many key factors go into making the right offer: market conditions, age/condition of the home, length of time on the market, inclusions and move in date are just a few. A seasoned broker will have done the necessary research to determine a reasonable offer.

Following the offer, three events will take place: The owner will accept or reject the offer; or, will provide a counter proposal.which reflects either different terms of the sale or a different price. Except in a hot market, it’s not unusual to have an extended back and forth with counter proposals.

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5. Under Contract

Once the offer is accepted, the clock starts to run and it’s important for the buyer to complete the final steps in the home buying process -- home inspection, obtaining financing and homeowners’ insurance, and enlisting the services of a title company (which ensures that the seller is the current deed holder, there are no outstanding liens on the property and provides title insurance which  protects you from any claims made against the property from the previous homeowner).

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6. Closing

The is the last step before getting the keys to your new home. Bring your ID and the patience to get through all the paperwork you’ll have to sign. You’ll know ahead of time how much you’ll be required to wire to the seller or have in the form of a certified check. This may be the last step in the home buying process but hopefully, it will be your first step to many wonderful years in your new home! 

 

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Topics: Home Buying