Every year, 5280 Magazine does a feature on Denver’s real estate market. Their feature for 2022 is titled, “13 Tips for Buyers Navigating Denver’s Real Estate Market” lists tips for home buyers in the Denver market. In a time where there is heavy demand and a lack of inventory, the article mentions that we are in a seller’s market, therefore it is even more important to understand proper navigation as a buyer. We’ve outlined their 13 recommendations and in the teal boxes added our comments.
1. Be ready to pay well over asking price
5280 sites the Denver Metro Association of Realtors’ annual market report, and extracts that last year’s close-price-to-list-price ratio averaged 104 percent for single-family homes and 105 percent for multifamily units.
2. Get your finances in order and then find a lender
5280 reminds us that before getting overly excited about the list of houses for sale, it’s important to be realistic about how much you can pay on a mortgage, down payment, and the loan you’ll receive.
3. Budget for interest rates to go this year
5280 highlights the interest rate’s reaction due to inflation cause them to rise and leaving buyers feeling precarious on the price of home they can truly afford.
4. Determine what you can live without
Compromises are important in relationships and 5280 parallels that to home buying because it is unrealistic to find a house with every aspect of one’s wishlist. But, they offer the alternative of using refinancing, home equity loans, or lines of credit to finally make those alterations through renovation.
5. Beware the risks of waiving contingencies
With the speed that houses are going off the market, 5280 has noticed that it leads buyers to forgo some of their rights and protection measures as a buyer. However, they remind us to understand the importance of these rights.
6. Understand the difference between FHA and conventional loans
5280 discerns between two types of loans, a federal loan from the FHA and a private loan known as conventional loans. They have different minimums for down payments, credit score requirements, and the lifetime of mortgage insurance.
7. Asses the value of new verse “vintage”
Buyers often have a vision for their house, either a traditional old home or a new build. There are trade offs for both. In older homes there is the risk of asbestos or lead-based pipes disguised by its classic charm. With a new builds there are building delays, upgrade charges, and additional expenses like blinds and landscaping that pile up.
8. Be Prepared
The front range has risk for natural disasters and that is an added factor that Coloradans should take into account when thinking about protecting their home.
9. Consider a condo or townhome if you’re a first-time homebuyer
Although many people have ideas about buying their first home and it being a detached residency, 5280 reminds buyers that the first home is about getting one’s foot in the door. Therefore, an excellent economic decision can be a condo or townhouse.
10. Find your perfect home – outside the Mile High City
The Mile High City is an expensive place to live and the cost of housing is rising, but there are great suburbs with low costs that still have great restaurants and neighborhoods. 5280 encourages finding those special nooks.
11. Find a champion in your agent
According to 5280, there are a variety of real estate agents to help in the home buying process. So it’s important to do research and find the proper agent that can find the best house for you.
12. Consider buying with friends or family
Although many people might consider buying a house with a significant other when it is time to settle down, 5280 hints at the benefits of buying houses with family or friends because that allows for the emergence of building wealth at an earlier stage of life.
13. Be creative when using your digital resources.
In the age of technology, 5280 shares ways to get involved with the home buying process through digital resources. They include a nice list of sites that go beyond the typical Zillow search to help ease the anxiety associated with buying a house.