First-Time Homebuyer Advice
Many potential first-time home
buyers ("Property Virgins") feel overwhelmed and think homeownership is an impossible dream.
Well, it's not! While home prices in the
Denver area have increased in the past year, 30-year mortgage interest
rates are still very low
(4% - 4.75%) and there are several loan options available that require
a down payment as little as $500!
The information below will help you gain knowledge about the
home buying process and will hopefully give you the courage to keep that
dream alive. The first bit of advice I will give you is to hire a
buyer's agent who will look out for your best
interests and make sure you are not making mistakes than can cost you
several thousands of dollars. This is the biggest financial decision
you will ever make, so it's essential that you work with a professional,
trustworthy Realtor who's there for you every step of the way.
As your REALTOR, I'm here to make sure:
1. you fully understand what it takes to purchase a home
2. you work with reputable mortgage lenders who won't take
advantage of you
3. you are utilizing every available first-time buyer
4. write an purchase offer that protects you before & after
5. that all of your questions are answered in a timely &
6. you don't get overwhelmed with the process - I'm here for
In his 1990 book Washington Homes, author and real estate
broker Jim Stacey claims that there are three stages for the
first-time home buyer: contemplation, comparison, and commitment.
He urges prospective buyers to get through the first stage on their own,
with the help of friends and family members. The road between
contemplation and being ready to commit to buying a house is arduous and
emotional, and Stacey has learned that the best use of a broker's time and
skills is to enter the fray after buyers have done some preliminary
Figuring Out What You Want
No matter how well you can picture your dream house and
communicate your idea to me, the house you finally fall in love with may
have little resemblance to the image you started out with. But you
have to begin somewhere, and a detailed wish list is a great head start.
Let's say your wish list looks like this, in order of priority:
Two bedrooms, two baths
Safe, quiet neighborhood
Ability to add on
No major repairs needed
Near close friends or
Close to downtown
Lots of natural daylight
Good investment with
excellent resale potential
Enclosed laundry area
Walk-in closet in master
Storage space for
lawn/garden and sports equipment
Gas hookup for stove
Back deck or patio
Close to work, schools,
Finished basement for
office or guest room
No threat of commercial
French doors leading to
Close to public
Now, how would the list change
if you had to settle for only 10 of your wishes in your price range?
If you had to narrow it to five, would your top priorities be different?
When you start looking at houses, this information will be invaluable to a
Realtor as he or she matches your requirements to available houses.
What Can You Afford?
Every market is different, but the first step to answering this
question is finding out what you can pay on a monthly basis after you've
made your down payment...3.5%, 5%, 10%, or 20% of the purchase price of
Speak to a mortgage
loan officer. The best way to learn what you can afford is to get
pre-qualified for a loan. I have excellent resources to local
who will ensure that you get the best loan rates and terms.
Pre-qualifying won't cost you anything and you'll walk away with a good
idea of how your income, assets, and liabilities translate into what you
can afford, and it can also help your chances of beating out the
competition in a sellers market (where there are more buyers than houses
on the market).
LOANS & MORTGAGE REFINANCING
Mortgage Alliance - Tiffany
Independent Mortgage - Kari
Mortgage - Tenby
Do the math. You can
also do a simple calculation on your own. Broker wisdom says that monthly
payments should be 25 to 33 percent of your monthly gross income. Use my
calculator to get a rough idea.
Take heart in knowing that
most first-time buyers are simply getting into the market. Your
dream house may be two or three houses into the future, so don't feel like
you have to spend every penny you can afford if it means trading off some
Starting the House Hunt
Now that you have an idea of what you can afford, you can focus
on whether you're in the market for a condominium, loft, townhouse,
single-family detached home. Call Anthony Rael
at 303-520-3179 and I
will help educate you about what to look for and avoid, provide reliable
references for other experts you'll need along the line - such as lenders
and inspectors - and represent you in negotiations and at closing.
Now you're ready for the fun
stuff: pounding the pavement. If you decide to drop in on an "Open House"
or a new home community when I'm not with you, please be sure to tell the
salesperson or agent that you are working with me. It's okay to talk to friends and family
about their buying experiences. People are often surprisingly open
about what they've learned about financing, construction (and even
themselves) in the course of buying their first house. However,
don't take everything to hear verbatim because you will have your own
experience. Finally, don't get frustrated by the lack of inventory,
condition of some properties or even the prices - if you are committed to
the process, we will find the right property.
If you would like to sit
down for coffee and discuss the Denver Real Estate market, just call me
anytime at 303-520-3179. Anthony Rael, RE/MAX Alliance offers professional & trustworthy real estate
services to buyers &
sellers throughout the
Denver metro area including
Wheat Ridge, Adams
Douglas County &