First-Time Buyers – Boulder CO Real Estate Agent
Finding a Boulder Real Estate Agent
If you have never owned a home before it is important to have a general understanding of the process. First, contact me or another experienced real estate agent who you like and trust and let them help guide you through the process. If you reach out to me and I am the real estate agent who you end up trusting to help guide you through the home buying process, all the better. If you have someone else in mind, that’s fine too. Just be sure to go with someone who you like and trust, and who you know is going to help get you past the inevitable rough patches along the way.
If you contact me the process starts with an initial interview/consultation, usually conducted at my office. If we are a good match, I will ask you to sign an agreement that states that only I will be the only real estate broker representing you and that I commit to representing you and working to advance your best interests (establishing a fiduciary relationship).
Finding a Lender
Second, if you cannot purchase the property outright with cash (few people have enough money to do this) talk to a mortgage lender (preferably a local one) and get pre-approved for a loan. I have people to whom I can refer you, or, if you have a particular mortgage lender or bank in mind, you can go with that person or institution. Certain institutions are easier to work with (i.e., more likely to close on time) than others, so I recommend you reach out to me first before getting too far into the process.
Occasionally there are situations, particularly related to the purchase of land or when the seller is related to the buyer, where “seller financing” or “seller carry financing” is used rather than a loan from a bank. Seller financing situations require the involvement of one or more attorneys in the transaction because real estate brokers who are not also attorneys are not allowed to draft financing documents on behalf of clients under Colorado real estate license law.
Contrary to popular believe, for the most part a 20% down payment is not required by lenders for a prospective home buyer to qualify to purchase a home. With the home prices being as relatively high as they are in Boulder County, 20% down would often be an excessive requirement for a down payment, leaving many prospective buyers in the cold. A simple example of a $500,000 property, which is typical for first-time home buyers to see in Boulder County, would, with a 20% down payment, mean $100,000 down. The down payment in this example is far more than most first-time home buyers have on hand to put toward a down payment. And even for those first-time buyers who might have 20% of the purchase price to put down, it often is not convenient for them to do so, given moving expenses, costs of necessary repairs and the like. Often, a much more reasonable amount of 5% of the purchase price, or sometimes even less (0% for VA loans and 3% for FHA and certain conventional loans) is all that is required. While coming up with $15,000 to $35,000 for a down payment is by no means an easy task for most first-time home buyers, it is certainly much better than having to come up with three to five times as much. All of this being said, I am not a mortgage lender and can only provide you a general understanding of the residential mortgage lending market. For information specific to you, you will need to establish a relationship with an experienced mortgage lender with whom you can place your trust.
Finding a Home and Closing
The next step is finding a home. There are an historically low number of houses on the market in Boulder County but, for diligent buyers willing to present competitive offers when they know a property is right for them, we will work together make the offer as attractive as can be, while still protecting the buyers’ interests to the maximum extent possible.
If the offer is accepted (it often takes several offers on several different properties before getting under contract in this market) then the next part is the due diligence period. The due diligence period is the period of time between the MEC date (the mutual execution of contract date) and the closing date (it is often 30 to 45 days, but can be more or less, depending on the circumstances). The due diligence period is when the home inspection (if improvements are on the property), appraisal (always required if there will be a mortgage/deed of trust encumbering the property following closing) and survey (if the buyer or title company determines one is necessary) will take place. This is often the most complex period of time in the home purchase process and there is much to learn, especially for a first-time home buyer. In the end, due diligence is the responsibility of the buyer, but as your fiduciary I can help you by giving you an overview of the types of inspections that may be advisable under the circumstances and by recommending professionals who can help you, if requested.
Lastly, there is closing. Usually the parties go to a title/closing company that handles the closing process by, among other things, presenting the parties with the necessary closing documents and issuing a title insurance policy in favor of the buyer and the mortgage lender. At closing the seller executes a deed, which grants the buyer legal title to the property. With the deed, which is recorded in the county’s records, you have the right to use the property as you wish, subject to, among other things, the covenants that were disclosed during the due diligence period and restrictions imposed by your lender.
While that might seem like a lot, and it is, with expert guidance the home buying process can, hopefully, be enjoyable. If nothing else, despite the rigor and stress that is so often involved in buying your first home, the end result is a home of your own. No roommates, unless they are of your choosing. No landlord, unless you decide to become a landlord. No parents, unless you invite them over. And best of all, you get to decide for yourself what you do with your property. Homeownership is truly a beautiful thing. If you’ve been thinking about taking the necessary steps to achieve the next major milestone in your life, call your Boulder real estate broker. I look forward to hearing from you!
If you are looking for Boulder real estate agents with a results oriented approach tailored to your specific needs, contact Royal Arch Real Estate. We are knowledgeable and experienced brokers who always have your best interests at the forefront of our minds, whether you are buying or selling a home, vacant land or a new construction.