"I think I'm ready to buy my first home but how do I really know?"
"It's time to sell our first home but where do I even start?"
Do either of the above questions speak to you? If so, my February newsletter is designed to help you understand the basics of buying or selling your first home in a few simple steps.
I get many questions regarding real estate but mainly they come from those who are buying or selling their first home. I always tell my clients that there are no stupid questions and to keep them coming! Part of my job as your Realtor®, is to put your interests before mine and to be as thorough, genuine and factual as possible when discussing the buying and/or selling process with you.
Below I have addressed the top 10 first time home buyer questions as well the top 10 selling secrets! Please feel free to email or call me to discuss each topic in more detail. I'm here to help!
Buying a home is an emotional experience that is exciting and terrifying all at the same time. There are many steps to the home buying process and each step creates a new set of questions. Knowing the answers to the 10 most common home buying questions can alleviate some of the stress that comes with buying real estate. Buying a home may seem intimidating, but your hired Realtor® (yes, that's me) will make it much easier and fun! I was recently awarded Top 1% Buyer's Agent in all of Colorado and Top 5% Producer in Denver. Please be assured that I will take care of you through each step of the process and make your experience as smooth as possible.
1. What is the First Step to Buying a Home?
Answer: The Mortgage Pre-Approval
Unless you are paying cash for a house, you will need to get a mortgage and in order to know how much home you can afford, you will need to get pre-approved for a loan. This is the first-step in the home buying process and I have several amazing lenders on my team that I can recommend to you! Mortgage rates are the lowest they have been since April 2018 (30-year fixed rate average of 4.41%) so now is a greattime to take advantage of that!
2. How Long Does it Take to Buy a Home?
Answer: About 30-45 Days
The timeline for finding a house varies greatly from person to person. Believe me, you want a customized experience from your Realtor® and not just a cookie cutter system that some agents use on every client. Once you find a house and have an accepted offer , it usually takes around 30 days to close. I am a very competitive and aggressive Realtor®, which is needed in this market, and if we need to move quickly then I have you covered. There's nothing like working under an intense deadline that makes me more excited to do my job!
3. What Does a Realtor® Do?
Answer: Almost Everything!
A Realtor® is your most valuable asset when buying a home! I will walk you through every part of the home buying process and I will educate and inform you of all your options. I will represent you throughout the transaction and beyond. To fully understand what that means, you can read this article entitled “What does it Really Mean to be 'Represented' by a REALTOR®?” There is a difference between a Realtor® and a real estate agent; many people do not know this. A Realtor® is regulated by the National Association of Realtors® ("NAR") and subscribes to a strict Code of Ethics. A real estate agent does not. It is recommended that you work with a licensed Realtor® to avoid potential problems. Choose wisely!
4. How Much do I have to Pay a Realtor® as a Homebuyer?
You do not have to pay me anything to help you purchase a home! Isn't that fabulous news?! The seller pays their Realtor® a fee, and then that listing agent pays the buyers agent for bringing the buyer and facilitating the transaction.
5. What is Your Best Advice for First Time Home Buyers?
Answer: Trust the Professionals
Beware of advice from people who do not work in the industry. Real estate is a popular topic and almost everyone feels like they have some great insight to offer (you know who you are). In reality, the people who know best are the people that work in the business. Good Realtors® can show you their successful track record. We know what to expect and what to look out for. Friends and relatives have only bought and sold a few homes, if any at all. Buying and selling a couple of homes does not make someone a well-rounded source of information. I’ve seen too many first-time buyers become persuaded by well-meaning friends and family, only to be disappointed later. Be confident in your decisions and trust the professionals.
6. What Kind of Credit Score Do I Need to Buy a Home?
Answer: Usually 620+
A 620 credit score, or higher, is recommended. As you are probably aware, a higher credit score offers better lending terms. This is an ever-evolving topic, however, as loan requirements are constantly changing. There are some lenders who will approve buyers with a 580 score, sometimes even lower. Your lender will be the best source to give you a current answer for today’s lending requirements.
7. Are There Special Home Buying Programs I Should Know About?
There are some great home buying programs to research. The main ones would be VA loans, USDA loans, and FHA loans. Knowing the difference between these loan types is very important. Other local options would include The El Paso County “Turnkey” Mortgage Program and the CHFA SmartSteps Plus Purchase Mortgage Program. Both provide down payment assistance under certain conditions. This is another topic to discuss in depth with your lender.
8. How Much Money Do I Need For a Downpayment?
Answer: It depends on your loan type.
Usually at least 3%-5% down is sufficient and the more you can put down, the better! There are also some conventional loans that only require 3% down. Veterans are usually eligible for a VA loan, which requires no money down. Properties in rural areas are usually eligible for a USDA loan, which also requires no money down. This again, is another topic to discuss in detail with your lender.
9. What Other Fees/Costs Are Involved Besides MyDownpayment?
Answer: Loan Origination, Closing Fees, Earnest Money and Inspection Costs.
Besides your downpayment, I tell my clients to please have approximately $10,000 of "other fees/costs" ready to go and here's why:
The downpayment is usually the largest cost associated with buying a house. Lending fees are the second largest costs to homebuyers. Most lenders will charge between 2% to 4% of the loan amount for loan origination fees and closing fees, depending on the loan type. Conventional loans usually have lower loan origination fees, but require more money down. Your lender will be able to help you determine how much you can expect to pay towards loan origination and closing costs. Once you're under contract (wahoo!), you will need to put down Earnest Money within 3-5 business days. Earnest Money is a form of a security deposit and is usually 1%-3% of the purchase price. When it comes time for inspection, you will need to pay the inspector for services completed. This is charged by square footage of the property and is approximately $500-$700 depending on what services are performed.
10. When Do I Get The Keys?
Answer: At Closing
You made it! Closing Day is the bestday! This is where I bring you an awesome closing gift and you walk away with keys to your new home! A closing typically takes about an hour. In some cases, the lender will need time to fund the loan and you will need to pick up the keys after the loan has been funded. If you have a Friday evening closing and the loan cannot fund until Monday, you may not get the keys until Monday. We can make sure to coordinate your closing to get the keys on the same day, if that is what you need.
When the decision is made by a first time home seller to list their home for sale, there is often a period of confusion. Most first time home sellers have no idea where or how to start the home selling process. That's where I come in! It’s very important that first time home sellers understand what the home sale process entails, what costs are associated with selling a home, and many other very important aspects of selling. It takes some work to find a buyer while getting the price you want. When working with me to sell your home, I use many different tools and strategies to get the job done! Selling your house doesn’t have to be overwhelming or scary. Hiring the right team of professionals to guide you (yes, that's me), will ensure you get the price you want in a timely manner.
1. The Price is Right
You want to get as much money for your house as possible. Who wouldn’t? Many home sellers make the mistake of being overly ambitious when it comes to the price their house will sell for. The day your house hits the market, it should be priced correctly! I use many tools to achieve a reasonable price point and you and I will discuss this during our listing appointment. Please....pretty please....don’t price high and hope to snag a buyer! This rarely works and your listing will slowly drop down the line and a high price up front will get it overlooked. Plus, potential buyers will be able to see any price changes you make. Continuously dropping the price will make you appear like a desperate seller or as if you don’t know what you’re doing. It can also give the impression something is wrong with the house because you aren’t able to get your asking price. Let me do my job and my homework up front and price the property correctly from day one.
2. Pack Up Before You Sell
Selling and moving go hand and hand. Do yourself a favor, and pack up before listing your home (I will even help you). Box things up and put them in storage, the basement or even the garage. Removing as many of your personal effects as possible will make potential buyers feel less intrusive when they are viewing your home. In addition, your listing photos should be completely free of clutter. Ads with personal items front and center often get scrolled past. Packing up your non-essential items will save you a ton of work down the road. Getting this out of the way early will make the moving process much easier for you.
3. Don't Say No To a Showing
It might seem a little inconvenient having strangers walk through your house at any given moment, but you need to make viewing of your house as easy as possible. If I have a buyer who wants to see the house at 9 pm, let them. If your house is all packed up, short notice shouldn’t be too much of a hassle. Do whatever you can to get your house seen. Don’t limit your showings to certain times or alienate potential buyers in any way. You can’t only rely on an Open House to sell your home. In fact, the vast majority of houses sell through direct showings. Being hospitable and flexible to potential buyers will set the tone for a positive, future transaction!
4. Pictures Say a Thousand Words
I can’t stress this one enough! Part of my listing services is that I will purchase your photos and virtual tour package. Also, if needed, I'll purchase high-end drone photography as well! Good photography is one of the most important things you will do when selling your house! Advertisements using bad photography, or with cluttered, messy or highly personalized rooms will likely be looked over. You have only a few seconds to capture someone’s interest when they are looking through listings, and you do this with amazing photography. Your house needs to pop! It has to stand out and make people click on your listing to find out more. I have 2 fabulous photographers that I work with. We can sample their work and you can choose who you prefer.
5. The Kitchen Comes First
You’re not actually selling your house, you’re selling your kitchen – that’s how important it is. The benefits of remodeling your kitchen are endless, and the best part of it is that you’ll probably get 85% of your money back. It may be a few thousand dollars to replace countertops where a buyer may knock $10,000 off the asking price if your kitchen looks dated. The fastest, most inexpensive kitchen updates include painting and new cabinet hardware. Use a neutral-color paint so you can present buyers with a blank canvas where they can start envisioning their own style.
6. Know Your Local Real Estate Market
Real estate markets can vary significantly from one neighborhood to another. First time home sellers need to understand what the current state is of their local real estate market. Before we price your home, we will look at comparable homes that have sold in or around your neighborhood (comps) and discuss the state of the Denver market. Generally speaking there are three “states” of a real estate market: a sellers market, a buyers market, and a balanced market. Since the spring months are typically stronger months to sell a home, many home owners have to decide whether they should list their home in the fall and winter months or wait until spring. There are advantages and disadvantages to both that we will discuss. Obviously a sellers market is preferred when selling a home for the first time and the Denver market is currently strong so if you're on the fence, let's go!
7. The First Impression is the Only Impression
No matter how good the interior of your home looks, buyers have already judged your home before they walk through the door. You never have a second chance to make a first impression. It’s important to make people feel warm, welcome and safe as they approach the house. Spruce up your home’s exterior with inexpensive shrubs and brightly colored flowers. You can typically get a 100-percent return on the money you put into your home’s curb appeal. Entryways are also important. You use it as a utility space for your coat and keys. But, when you’re selling, make it welcoming by putting in a small bench and possibly a vase of fresh-cut flowers or even some cookies.
8. Hire the Right Realtor®
An obvious sale killer is hiring the wrong agent! I am always informed of the Denver market and am constantly monitoring the MLS (Multiple Listing Service) to know what properties are going on the market and to know what comps are in your neighborhood. I embrace the most up-to-date technology and being tech-savvy means I have many tools to get your house sold! I will give much more detail regarding my selling strategies during our listing appointment.
9. Light It Up
We will want to maximize the light in your home. After location, good light is the one thing that every buyer cites that they want in a home. Take down the drapes, clean the windows, change the lampshades, increase the wattage of your light bulbs and cut the bushes outside to let in sunshine. Do what you have to do make your house bright and cheery – it will make it more sellable.
10. Half-Empty Closets
"Where do I put my stuff?!" Storage is something every buyer is looking for and can never have enough of. Take half the stuff out of your closets then neatly organize what’s left in there. Buyers will snoop (trust me), so be sure to keep all your closets and cabinets clean and tidy.
If you're a buyer: Remember, a good Realtor® is your best source of information when buying a home. Once you and I have discussed your wants and needs for your first home, start asking as many questions as possible! I will gladly inform and educate you through each step of the home buying process. Remember to have fun! Buying a home is an exciting achievement!
If you're a seller: Selling a home for the first time can be extremely stressful and exhausting. A first time home seller who has a top producing agent in their corner (again, that's me) will have a much greater chance of a smooth and successful home sale.
If you have any questions regarding the Denver housing market, I'm here for you! I would be honored to help you with any and all of your real estate needs. Let's make it a fantastic year.
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