Buying a house can be a daunting task, especially for first-timers. Even so, there's a reason to overcome that fear: for some people, paying a mortgage is a smarter financial decision than paying rent.
Each time you make a mortgage payment, you are investing in ownership of a home that will likely increase in value over time. Plus, many of the improvements you make over the years will only sweeten the payoff of your initial investment.
Right now, the Colorado housing market is healthy, which is great news for those looking to buy property in the Centennial State. Before you go scouting out every "for sale" sign you see, here are a few pointers on how to get the most bang for your buck.
1. Choose A Trusted Mortgage Lender
Before you even start looking at homes, it's a good idea to get pre-approved for a mortgage. This shows potential sellers that you are a serious and motivated buyer. Colorado Housing and Financial Authority (CHFA) has a long track record of helping first-time and low- to middle-income homebuyers afford their dream house by offering down payment and closing cost assistance, along with a variety of loan programs. CHFA's loan programs are available through a statewide network of more than 100 participating lenders.
2. Look at Ugly Houses
We've all heard the adage "buy the worst house in the best neighborhood." Turns out, there's some truth to this advice. When it comes to real estate, a desirable location can be the rising tide that lifts all boats—even the ugly ones. Consider fixer-uppers in great school districts or homes near cute downtown areas. You can use the money you save on the sale price to transform an ugly duckling house into your customized dream home. Just remember to be realistic about your handyman skills or costs associated with renovation.
3. Do Your Research
If you're looking to buy in a particularly hot market like Boulder or Denver and the price of a certain house is in line with recent sales, you might not have much opportunity to negotiate. On the other hand, if you feel your dream house is overpriced and you have the research to back up your claim, you may be able to get the seller to come down on their asking price. Find out how much similar homes in the area sold for and use the information to your advantage.
4. Pay Attention to The Inspection
A home inspection is an important step in the homebuying process and can help you understand the overall condition of a home. If an inspection reveals problems with a house, you can often leverage those issues in price negotiations. Instead of asking the seller to complete repairs, especially cosmetic ones, you can ask for a credit that would lower the overall sale price. You can then make the repairs yourself after the sale or hire a contractor within your budget.
5. Know Your Seller
Learning a few key facts about the seller can help you out in the long run. Why are they moving? Are they motivated to sell quickly, or would they rather have a longer closing period to get their ducks in a row? Do they have another place lined up or does their new mortgage depend on the sale of this house? Understanding the seller's motivations allows you to tailor your offer to their needs, often making them more open to negotiations.
Think you're ready to take the plunge into home ownership? While it may seem daunting, remember that you're not alone. We can help you level up your knowledge with homebuyer education programs as well as assist you with down payment and closing costs to help get you the home of your dreams.