303.805.1200
18425 Pony Express Drive #201
Parker, CO 80134
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Phone:303.805.1200 | 18425 Pony Express Drive #201 Parker, CO 80134
Peak Real Estate
If you are considering buying a new home we have some buying tips that we think you might find useful.
Many people find the process of buying a home a little daunting and sometimes overwhelming. You're not alone. No two buying experiences are the same, but these home buying tips provide an idea of the different steps you may encounter when buying a home.
Despite recent slowdowns in some markets, housing remains a good long-term investment, and demographic demand favors housing over the longer term especially in Denver, parker, etc… and demographic demand favors housing over the longer term.. Homeownership offers immediate benefits and long-term value. Homeowners accumulate wealth for the future while enjoying the benefits of a shelter that they can use, improve and sell.
Our Prudential Peak Real Estate Agents are ready to help you make an
informed decision to get you on your path home. Some of the issues you
may be considering are:
- What is Right For You?
- How Much Can You Afford?
- Know Your Neighborhood
- What If You Already Have a Home?
- Buying A Second Home
- Shopping For A Home
- Working With A Real Estate Agent
What's the Right Home For You?
Are you looking for a home? Before deciding which house to buy, think about your lifestyle, your current and anticipated housing needs, and your budget. It’s a good idea to create a prioritized list of features you want in your next home – you'll soon discover finding the right house involves striking a balance between your "must-haves" and your "nice-to-haves."
To start, consider your lifestyle. If you love to cook, you'll want a well-equipped kitchen. If you're into gardening, you'll want a yard. If you're planning your office at home, you may want a room for a separate library or work space. If you have several cars, you may require a larger garage. Use this list as your search guide.
Next, think about what you might need in the future. As you consider your housing needs, it's important to consider how long you may live in your home. If you're newly married, you might not be concerned with a school district right now, but you could be in a few years. If you have aging parents, you may want to look at homes that offer living arrangements for them as well as you.
It’s important to think about your new home’s location just as carefully as you do about a house’s features. Location is a huge part of any move. In addition to considering the distance to work, you need to evaluate the availability of shopping, police and fire protection, medical facilities, school and day-care, traffic and parking, trash and garbage collection, even recreational facilities.
Perhaps the most important decision is deciding on the type of home you want. Do you want a condominium or a co-op? A town house or a detached single-family home? Do you want brick, stone, stucco, wood, vinyl siding, or something else? Do you prefer a new home or an older one?
Through all of this, make sure to talk to your real estate professional about where you want to live. While more buyers now use the Internet to gain access to listings, or available properties for sale, it is still a good idea to use an agent. The agent brings value to the entire home buying process: he or she is available to analyze data, answer questions, share their professional expertise, and handle all the paperwork and legwork that is involved in the real estate transaction. Prudential Peak Real Estate professionals have the expertise to help their clients narrow down their choices by sharing market trends and local information.
How Much Can You Afford?
Now that you know what type of home you're looking for, the next step is figuring out what type of home you can afford. A review of your income, savings, monthly expenses, and debt will be necessary.
Early on in the process, you'll want to get pre-qualified for a mortgage loan, which helps determine how much you can afford, the realtors at Prudential Peak Real Estate can recommend one for you. This process enables you to move swiftly when you find the right home, especially when there are other interested buyers. It also indicates to the seller that you are serious and can afford to buy the property. A pre-approval is a simple calculation done by a mortgage lender that tells you the amount you'll be able to finance through a loan and what your monthly payment will be. When you find a home to buy, a pre-approval also reassures the seller that you have the financial means to purchase his or her home and makes any agreement more confident and whole.
Knowing what you can afford is the first rule of home buying, and that depends on how much income and how much debt you have. It pays to check with several lenders and we'll provide you some direction in getting multiple options before you start searching for a home.
The price you can afford to pay for a home will depend on several factors, like:
- Your household gross income
- The funds you have available for the down payment, closing costs and cash reserves required by the lender
- Your debt amount and type.
- Your household credit history
- The type of mortgage you wish to pursue.
- Current interest rates
Another figure lenders use to evaluate how much you can afford is the housing expense-to-income ratio. It is determined by calculating your projected monthly housing expense, which consists of the principal and interest payment on your new home loan, property taxes and hazard insurance (also known as PITI).
Each buyer is unique and a mortgage professional can help you find out just what you can afford. Your income and your debts will typically play the biggest roles in determining your price range. It's simple to make an estimate, just run the numbers utlizing this simple mortgage calculator
Buying a Home
Property Search
Know Your Neighborhood
When you buy a home, you're not only buying a home but you are investing in a community. You'll spend a significant amount of time and money supporting the businesses, schools, community organizations and commercial centers in the surrounding areas. Before you make the final decision, take a good look at the location and make sure it fits your needs.
- Evaluate the properties proximity to other important locations in your life. How long will your commute time be? Is there a hospital or doctor's office nearby? What about schools, childcare, shopping, family and friends?
- Consider all your transportations options. A new home could lend itself to public transportation options or car-pooling. Depending on the type of community, you may be able to find alternative methods of transportation. Take the time to drive from the new home to your commuting destinations to understand the impact it will have on your lifestyle.
- Visit and understand the school district you'll be moving in to. Even if you don't have children in the school system now, you may some day. The district reputation could positively or negatively impact the selling price of your future home as well.
- Make sure you feel comfortable in the area. Drive around the neighborhood at different times of the day and night on multiple days of the week to observe activity/noise levels. Discovering that barking dog next door or noisy road conditions will eliminate unneeded stress from a hasty decision.
Prudential Peak real estate professionals are experts in the areas they serve. Ask your agent for a list of schools, shopping centers, parks or other important amenities. Buying a new home is about more than the structure and property. It's about your new lifestyle as well.
What If You Already Have a Home?
Buying a new home and selling an existing home at the same time has it's own set of difficulties. But with planning, you can ensure everything goes smoothly.
Before putting your house on the market or committing to buying a new one, take a look at the prices of houses in the areas where you'll be both selling and buying. You'll need a realistic idea of how much similar houses are going for. Since you're both a buyer and a seller, you'll need to protect yourself in your weaker role while letting your stronger role take care of itself.
What if you're unable to perfectly time the sale of one house with the purchase of another? You may own no houses for a time, in which case you'll need money in the bank and a temporary place to live. Or, you may own two houses at once. That's why it's important to have a back-up plan. Here are some options to consider:
- Research short-term rental and storage options (family, friends, storage facilities, containers).
- A bridge financing is a loan for the down payment on a new home backed by the equity in your old house, typically at prime plus two percentage points.
Another option is a no-ratio mortgage. A no-ratio mortgage is usually made based on the buyer's down payment, credit scores or assets. Income isn't used or reported, and therefore will not exclude a borrower from receiving this mortgage. Rates are often higher but you can refinance later.
Alternatively, you may be able to draw on a home equity line of credit on your old home. However, you might pay a penalty fee if you sell the house within a year.
Buying a Second Home
Buying a second home isn't that much different than buying a first home. Affording it usually depends on your ability to qualify for a mortgage on the second home. Benefits include tax breaks, a getaway for the family on vacations or holidays, a future retirement home, renters making your mortgage payments for you, or just a smart investment.
Many people see buying a second home as an investment opportunity. You'll need to identify sources for your down payment, since you're not selling your current house and using the proceeds, and you'll need to expect a larger monthly obligation for housing expenses.
Keep in mind that if you declare it as a rental, your mortgage might be slightly higher. Work with your lender to create a customized loan program with the best combination of rate, points, and closing costs for your needs.
Shopping For a Home
Selecting a buyer's agent to help you find your dream home is an important first step. He or she can represent the buyer's interest in a real estate transaction. Before making a decision, however, have a realtor explain the pros and cons of using a buyer's agent versus a sales or dual agent.
When you're ready to visit houses, ask your Prudential Peak Realtor to help you with:
- Arranging showings
- Tracking of the properties you've seen.
- Identify if the home meets your criteria - refer to your "what's right for you" list
- A digital camera to record what you see
After touring each home, write down what you liked and didn't like. Develop a rating system that will help narrow the field. For example, pick the house you like best on day one and compare all other houses to it. When you find a better one, use the new favorite as the standard.
Working with a Real Estate Agent
Buying a home is one of the most important decisions you will make. That's why it's in your best interest to choose an experienced real estate agent who listens to and understands your needs, and works in the area where you want to live. When you choose a Prudential Peak Realtor, you're dealing with an experienced professional who understands your concerns and will provide you with the personalized service that makes all the difference.
The professional realtors at Peak Prudential Real Estate have the expertise and experience here in metropolitan Denver to assist you in finding the right home whether you are a first time home buyer, looking to move from a starter home or looking for the right investment property. Call me today at 303.805.1200 so we can start helping you make the right choices and be the experts for you in this process.
