Buying a First-Time Home: A Step-by-Step Guide for How to Buy a Home in Colorado
Whether you are buying a first-time home in the Denver-Boulder area, moving here from out of state, or buying a forever home, the real estate market in Colorado can be challenging! In Boulder, Jeffco, Larimer, Broomfield, and nearby communities, the types of housing and their condition vary widely. Depending on when and where you are looking for a new home, the pricing can be high for homes and the most desirable homes for sale sometimes go under contract with lightning speed.
Having a good home buyer agent can really help you have a better home search, but it’s also important to take some time to educate yourself so that if you can make better decisions when the time comes.
That’s why Agents for Home Buyers is happy to share this step-by-step guide to the home-buying process. We love working with first-time home buyers, so this guide will be particularly helpful for you if that’s your situation. For more experienced home buyers, consider this guide a valuable review and refresher. After all, most people don’t buy homes very often and reminding yourself of what’s involved could really help.
Let’s explore the steps of the home buying process.
Overview of The Steps of the Home Buying Process
Step 1: Educate Yourself About the Home Buying Process
Buying a first-time home is one of the most consequential financial decisions a person can make. Spending some time learning about the home-buying process can help you avoid costly mistakes and help you feel confident that your home purchase is a wise investment for you and your family. Every real estate market has its own practices, and getting familiar with them can avoid confusion.
Step 2: Form Your Team of Real Estate Professionals: Mortgage Broker and Buyer Agent
Making a six- or seven-figure decision without expertise and experience is very risky. We show you how to find a good lender and a good home buyer agent who will help you navigate the home buying process. We also offer info on the different types of real estate agents and what they can and cannot do as defined by law in Colorado.
Step 3: Focus Your Home Search: From City to Neighborhood, House Layouts, and More
In a diverse real estate market like in the Denver-Boulder area, the choices can be overwhelming. By making some directional decisions on locations, types of housing stock, and your checklist of requirements for a home, we can show you how to focus your home search and save weeks and months of time.
Step 4: Beware the MLS and Online Real Estate Databases
Most home buyers think that online real estate websites like Zillow are intended to help them. Not so. Online MLS and real estate websites are marketing tools for home sellers and their seller’s agents. Armed with this knowledge, you can see the best ways to use these sites that won’t put you at risk. And let’s be clear: using real estate websites the wrong way is very risky and can cost you dearly.
Step 5: Tour the Home
Once you have focused your home search, it’s time for the fun part! Working with Agents for Home Buyers means getting private tours of homes, avoiding the perils of open houses, and perhaps even getting to see homes before they are listed for sale.
Step 6: Craft Your Home Purchase Offer
Once you have found a great home that meets your requirements, it’s time to craft a winning offer that invests your money wisely and gets you the best possible terms, protecting you from any issues that arise during the inspection process..
Step 7: Negotiating the Contract
Most offers will go through some form of negotiation on terms and pricing. Negotiating badly is a great way to lose opportunities, so we share guidance on how to negotiate a home purchase.
Step 8: Understand the Key Colorado Real Estate Documents
Regulations in the state of Colorado require the use of standardized real estate forms. Get familiar with Colorado real estate documents now to reduce confusion and delays during the all important paperwork, negotiation, and closing phase.
Step 9: Home Loans and Financing
Once the contract is settled, you will “lock” your loan, confirming clean title, and more.
Resources: Home Buyer Assistance Programs
The State of Colorado and Boulder County have home buyer assistance programs that can help you with financing your home purchase, even if you’re not a first-time home buyer. Some of these programs come with strings attached, so it’s good to understand if you are eligible to take advantage of these helpful programs and what each program can and can’t do for you.
Alright, let’s dive right in!
Step 1: Educate Yourself About the Home Buying Process
Information Is Power
Like any other complicated undertaking in life, the home buying process has conventions, protocols and a vocabulary all its own. If you take a little time to educate yourself about the home buying process at the beginning, you will be way ahead of the game. There are whole books on the home buying process that deal with many of the issues discussed on our website. You can find a lot of information elsewhere on the web as well. The Freddie Mac website, for example, offers a simple but useful description of the home buying process.
Home Buying Practices and Regulations Are Local
We don’t just mean “location, location, location!”
There are vast differences in real estate practices across the country. In different states, the home buying process has different approaches, practices, and regulations.
Agents for Home Buyers focuses exclusively on the practices in our real estate market, which is in the Denver-Boulder area of Colorado from roughly Jefferson County to Larimer County including Boulder, the foothills, and the western parts of Weld and Adams Counties. Home buying practices and regulations in other areas may be quite different.
In fact, we have seen that regional differences are a constant source of confusion for buyers moving from out of state. For example:
- In some areas of the country, the law requires buyers and sellers to have attorneys represent them. In Colorado, attorneys often don’t play any role at all.
- Some areas don’t have multiple listing systems (MLS), the databases of homes for sale that are critical to how our markets function here. But in Colorado, there are several MLS online systems, and they each have different coverage for different areas.
- Some states define professional real estate roles. In Colorado, there are legal requirements for seller’s agents, buyer’s agents, and transaction brokers and you need to know which type of agent you are talking to.
Buyers who have purchased homes in other states are often more confused by the process here in Colorado than if they had no understanding of real estate practices at all.
This Step-by-Step Guide to the Home-Buying Process is helpful both for first-time buyers and real estate veterans in our market, which includes Boulder County, Broomfield County, Adams County, parts of Weld County and Jefferson County.
You Will Have a Lot of Choices
In many respects, the process of buying a home is like buying a car.
First, you decide what you want in a home and then match this up with what you can afford.
Then, you must determine how you will pay.
In home buying, as in car buying, you’ll find that what you can afford will depend on the financing you are able to qualify for.
Furthermore, in both cases, you are wise to have a professional inspection to ensure you are making a smart purchase.
And finally, you must know and follow the legally sanctioned means of recording and transferring legal title to the property.
Choose with Care!
Home buyers will often spend 10-20x as much on their home as they do on their car. But money isn’t the only consideration. Home buying decisions have a wide-ranging impact on all aspects of our lives. The home we buy, and where we buy it, will affect the social contacts we make and the way we spend our leisure time. It affects what schools our children go to and who their friends are.
The home we buy is one of the most important financial investments we make in our lifetimes. We think of cars in terms of how much they will cost over time. We think of homes in terms of their eventual value as an investment.
For all of these reasons, you should educate yourself about the home buying process. It’s wise to approach a home purchase with more knowledge, more assistance and more care than any other purchase you make.
Common Stumbling Blocks in Buying a First Time Home
Agents for Home Buyers has been helping home buyers find great homes on the Front Range for nearly 30 years. Oftentimes, we help buyers after they have made some mistakes on their own and have decided that they need the help of a good buyer agent for their next home purchase.
There are 6 common mistakes that many home buyers make, regardless of their experience in buying homes. The industry is full of potential hazards for buyers and these are just a few.
Many stumbling blocks stem from a lack of clear understanding of the home buying process or the roles of the people involved.
Often, buyers just don’t understand the best way to get the process rolling and how to keep it going.
Because so much is at stake, this can create a high anxiety level throughout the many steps in the process.
These misunderstandings can cause buyers to waste a lot of time in a series of false starts before they move forward with a home purchase.
Jumping Right In Is Usually A False Start
Examples of those false starts include driving through neighborhoods, dropping by “open houses,” or looking at model homes in new subdivisions. While this can be a useful way to get a feel for the market, it can also lead to serious problems.
First of all, you never want to fall in love with a home you can’t afford. Doing that will likely result in the gut wrenching loss of a purchase that was never yours in the first place. Even worse, you could lose several thousand dollars by committing to a purchase contract you can’t complete.
Not Arranging Financing First
Home buyers really should not start a home search without a realistic sense of what they can afford. And you won’t know what you can afford until you talk with a good mortgage broker who can help you understand your financial situation and how your budget fits into the Boulder-Denver real estate market.
Unless you are a cash buyer, it’s important to sit down and talk with a local loan officer. A good mortgage broker can help you understand what you can afford to buy, how much cash you’ll need, and what your monthly payment will be.
You can learn a lot about home loans on the internet, but nothing beats sitting down with a knowledgeable loan officer and getting their input on the best approach to financing your home purchase.
Not Getting Professional Real Estate Help
These days, MLS listings are available directly to consumers over websites and mobile apps. It seems that searching for and purchasing a home on your own would be more feasible than it was a few years ago. Sometimes home buyers ask: Do I really need an agent?
These websites and apps make it really easy to find homes for sale. But finding homes for sale has really never been the hard part of buying a home.
As seasoned home buyers can attest, finding the perfect home is easy compared to contract and inspection negotiations. See 40 Things to Consider When Buying a Home in Colorado. This is where having a good buyer agent working to protect your interests and to provide a clear understanding of the home buying process is so important.
Considering that buyer agents are generally compensated as part of the seller’s agent fee, there is really no good reason for any home buyer to try to buy a home without the assistance of a good buyer agent.
Next Steps in Buying a First-Time Home
Contact Agents for Home Buyers! Lindsey and Danielle can help you navigate the home buying process to find a great home you will love. It’s what we have been doing as buyers agents for 25 years in Boulder County, Jefferson County, Broomfield, Larimer County, and nearby.
Step 1: Educate Yourself About the Home Buying Process
Step 2: Form Your Team of Real Estate Professionals: Mortgage Broker and Buyer Agent
Step 3: Set Realistic Goals for Your Home Search
Step 4: Beware the MLS and Online Real Estate Databases
Step 5: Begin a Focused Home Search
Step 6: Craft Your Home Purchase Offer
Step 7: Negotiate the Contract
Step 8: Colorado Real Estate Documents and Forms
Step 9: Home Loans and Financing
Resources: Home Buyer Assistance Programs