We know that the idea of buying a home can seem intimidating, but it doesn’t need to be. We’ve detailed everything that you need to know when buying a home in Colorado.

1. Find a Loan Officer and Get Pre-Approved for a Mortgage

The first step in the home buying process is to find out what your purchasing power is! A loan officer is the person that will secure a mortgage loan on your behalf. If you’re thinking “Where on earth do I find a loan officer?” Our Real Estate Agents are happy to help set you up with a loan officer that is right for you.

On the loan application they will ask you for information about your income, credit history, and current assets. They will also ask for documentation like pay stubs, bank statements, and tax returns. They can help walk you through which type of loan best suits your needs! If everything checks out, within a day or two you will have a pre approval letter for your home loan!

2. Find a Real Estate Agent

Your Real Estate Agent will play a vital role throughout your home buying process! It is important to choose a Real Estate Agent that is knowledgeable, they will be your personal shopper and chief negotiator!

3. Create Clear Intentions

It is pertinent to know what type of home you want and what your future goals are with the home. Not all homes are created equal, some may have HOAs, deed restrictions, and many other possibilities. You will need to discuss this with your real estate agent in detail so they can help you find the home that’s right for you!

4. Saving for a Down Payment

It is commonly thought that you must have 20% for the down payment, however, in some cases you may only need as little as 3.5% for the down payment. This is something that your loan officer will be able to clear up for you. 

5. House Hunt and Start Making Offers

Once you find the right house for you, you will submit an offer to the seller. Your Real Estate Agent will help you make a competitive offer for the home you desire to purchase. 

Important Note: At this point in the process it is important that you don’t change any of your finances; no additional large purchases or new credit cards.

6. Your Offer gets Accepted, Now What?

Once your offer is accepted, you are under contract! This is the Due Diligence or Option Period (depending on your location). You will pay a deposit to the sellers of about 1% to show that you are serious about buying the home. In exchange, you will have an agreed upon timeframe (3-10 days) to inspect the home and make sure you want to purchase it. You will hire a professional inspector to make sure it is safe and up to code, they will notify you if there are any problems with big ticket items like plumbing, roof, or HVAC. 

At this stage if you do find something wrong, you and your Real Estate Agent can negotiate with the owner. You can either adjust the purchase price, ask for seller concessions, or ask for the owner to fix them. Once you have come to an agreement and all parties agree you will move to the next phase of the process and prepare to close.

7. Prepare to Close

The loan officer is working behind the scenes turning over documents to the underwriter. The underwriter is the one who holds ultimate power to approve or deny your loan. During this time, your loan officer might request additional information, it is key to stay on top of things. Once you’re all clear, you will be “clear to close”. 

During this time period you mortgage company will hire a third party to appraise the property. They will report the appraisal to you and your loan officer. Further negotiations may take place depending on the appraised vs purchase price. 

The loan officer will now provide you with documents stating how much you owe in down payment and closing costs. 

8. Final Walkthrough

Before you head to the closing, you will need to walk through the home to make sure everything is in the condition promised by the seller. This a key step to insure the seller has made any agreed upon changes as well. 

9. Close on Your Home 

Yay! You made it to closing day! 

Typically before closing you will have already wired the money you owe for your new home. So all you will need to bring is your ID, proof of insurance, and your patience (there’s lots of paperwork).

Want to make the process even easier? If you’re looking to buy in the Colorado area, reach out to us at Good Neighbor Realty and we’ll help you every step of the way!