BUY A HOME
Location, location, location. You must’ve heard that before. But that’s because, much of the time, that’s what real estate is all about. And never is it more true than when you’re buying a home. As a certified Real Estate Agent, I have the local knowledge, skills and experience to help you through the buying process. From property hunting and price negotiations to mortgage offers and legal paperwork, I’ll help you meet your goals, whatever they may be. Your dream home is waiting and I can’t wait to help you find it.
Steps To Buying A Home
Aspiring homeowners, buckle up because we're about to take you on a journey to homeownership! Don't worry, we'll make sure to highlight all the important steps to ensure that your new asset is a safe and secure investment.
Step 1: Get Ready for Home Ownership
First things first, to make your dream of homeownership come true, ensuring your credit history is good is crucial. Get mortgage pre-approval, find out what type of mortgages you qualify for, and save up for a downpayment (typically 10-20% of the property’s value; if FHA-qualified, then possibly less). But wait, there's more! You should also consider hiring an attorney to review all contracts and agreements associated with the home buying process. Remember, knowledge is power!
Step 2: Find a Real Estate Professional
You'll need some expert help to find your dream home. Consider asking friends, family, and work colleagues for referrals, searching realtor.com®, or looking for real estate yard signs and advertisements. Make sure you understand buyer's representation contracts and agreements before signing.
Step 3: Find the Right Property
This step is all about you! Determine what's important such as particular schools, neighborhood amenities, monthly mortgage payments, public transportation, walkability, etc. Don't forget to include home owner’s assessments, utilities, and taxes when calculating the monthly mortgage payment.
Step 4: Finance the Property
You're one step closer to getting the keys to your brand new home! Contact your mortgage broker or lender to get started. The lender or attorney will run a title search to ensure there are no clouds on the title. Make sure you understand the financing terms—ask the lender for clarification if needed.
Step 5: Make an Offer
Getting to this step means you're closer than ever to owning your dream home. Ensure the property is inspected by a licensed home inspector, acquire title insurance and read all contracts before signing. Don't forget to place a competitive bid and be prepared to make a counter-offer. Remember, only one offer will result in a sale, so if your bid is not accepted, be ready to move on.
Step 6: Closing and Life After the Big Purchase
Congratulations, you did it! Now it's time to protect your new asset by obtaining insurance such as homeowner’s, flood, disaster, and fire. Don't forget to weatherproof your new home and maintain files—digital or print—for all warranties, insurance documents, contracts, etc. Keep original closing documents in a safe place, preferably outside your home, and set up utilities bills in your name. Finally, implement desired aesthetic changes such as painting, minor construction, and re-flooring. Welcome to life as a homeowner!
Don't Wait To Buy Real Estate.
Buy Real Estate And Wait.
Real Estate Lingo Simplified
In the world of real estate, jargon can sometimes be confusing. To make sense of it all, here's an A to Z breakdown of the most important terms you need to know.
Adjustable-rate mortgage (ARM): A type of mortgage with an interest rate that may fluctuate over time based on market conditions.
Active listings: The total number of homes available for sale at the end of a given period. This can significantly impact supply and demand, as well as home prices.
Amortization: A payment system that distributes the cost of a loan over a series of fixed payments. With each payment, the amount allocated to interest decreases while the amount applied to the loan balance increases.
Amenity: Bonus features provided in residential property such as swimming pools or fitness centers.
Apartment: A housing unit within a building, either rented or owned.
Appraisal: A licensed appraiser's estimate of a property's worth based on comparable sales.
Appraisal contingency: A clause in a contract to protect the buyer, ensuring the home is worth the agreed-upon price.
Appraisal gap coverage: Covers the difference between the purchase price and the appraised value. When the appraised value of a home is less than its purchase price, this coverage is used.
Appraisal Management Company (AMC): Serves as a middleman between appraisers and lenders to ensure appraisals are unbiased.
Appraiser: A licensed professional who determines the fair market value of a property.
Area total: The square footage of a property.
As-is: The current condition of the property at the time of sale.
Basement: It's the lowest part of a building that could be entirely or partially located underground. It may also be finished or unfinished, depending on the owner's preference.
Bilevel (or bi-level): A bi-level, also referred to as a raised ranch, has two floors with one entrance located between the two. Don't confuse it with a split-level design, though.
Blind offer: It's an offer made by a buyer who has not visited the property yet.
Boiler: This helps circulate steam or hot water through a radiator system, generating heat.
Buyer’s Agent: A licensed professional who assists clients in the home-buying process to make sure they get the best possible deal and legal advice to protect their interests.
Capitalization rate (or cap rate): It's the rate that assists in evaluating a property investment's financial performance, calculated by dividing the net operating income by the current market value of the asset.
Carport: It's a covered structure with open sides that protects a car from the elements.
Cash reserves: It's the amount of money saved or kept by a person or company to use in case of an emergency.
Closed listing: A real estate property is only considered "sold" after the ownership has been transferred, and payments have been completed. After the transfer, the property is now "closed," and the new owner has full control over it.
Closing (also referred to as completion or settlement): The final phase of a real estate transaction that involves finalizing the mortgage agreement, paying transaction fees, and signing legal documents to complete the deal.
Closing costs: A buyer and seller both incur expenses during the transaction process, including application fees, inspection fees, insurance, taxes, and commissions for a seller's agent's portion of the sale.
Coming Soon: A property not yet listed for sale in the real estate market but is expected to be soon.
Commercial lease: Similar to a standard lease, but instead, this contract is designed for commercial renting purposes. It involves renting commercial properties such as offices, shops and warehouses for carrying out business activities.
Condo: A private unit in a building that has shared walls, like an apartment, but is owned instead of rented.
Comparable (or comp): A recently sold property used to determine the value of a similar property.
Covered Parking: Multi-car, covered parking structure.
Counteroffer: A response to an offer that presents three options: accept, reject, or make a new offer.
Covenants, Conditions & Restrictions (CC&Rs): Rules for residences in a neighborhood controlled by a builder, developer, association or neighborhood association.
Contingency: A condition that must be satisfied for a real estate contract to be closed or finalized.
Concession: A buyer or seller benefit or discount to aid in selling a home.
Conventional Sale: Sale of a property that's been paid off or the owner owes less than market value.
Commission: Payment made to a Realtor®, real estate agent, or broker for services provided in buying or selling property. It's typically a percentage of the sale price but can also be a flat fee.
Contract: Legally binding written agreement between buyer and seller detailing real estate transaction details.
Comparative Market Analysis: Determines a home's value based on sale prices of similar properties in the vicinity.
Curb Appeal: A property's first impression or attractiveness viewed from the street.
Days on Market (also known as DOM): The number of days from listing until the seller accepts the offer or signs a contract.
Detached Home: A single-family home that sits on its own lot and does not share any walls with another home or building.
Duplex: A property where two units are attached either side by side (like a townhouse), or above each other (like apartments).
Deeded Parking: A parking space that is deeded to either the townhouse or condominium unit as detailed in the legal description.
Down Payment: The amount of money a buyer pays upfront as part of a real estate transaction. Typically a percentage of the total of the home’s purchase price.
Due Diligence: Doing your homework before buying real estate. It refers to a buyer’s investigation of the various aspects of a property.
Debt-to-Income Ratio: This ratio is one way lenders measure your ability to manage the monthly payments to repay the money you plan to borrow. It's calculated by dividing all your monthly debt payments by your gross monthly income.
Deed of Trust: A deed of trusts transfer the legal title of a property to a third party (e.g. a bank, escrow company or title company) to hold until you can repay the debt to the lender.
Down Payment Assistance: Assistance from a local or state housing authority, a nonprofit or a lender to help a buyer with their down payment on a mortgage loan.
Exclusive right-to-sell: This agreement between a Realtor®, real estate agent or real estate broker and a seller gives the agent exclusive rights to market and sell the seller’s property.
Escrow: An arrangement in which a neutral third-party provider holds the funds associated with a real estate transaction until a specific condition is met. In Colorado, the earnest money you deposit is applied to your down payment and all closing costs, deposits, credits, etc. are applied toward the final closing cost on the day of closing.
Equity: One of the best benefits of homeownership is building equity, calculated by taking the market value of a property and deducting the amount still owed on the mortgage - if there is any.
Earnest money: Money the buyer puts down to show the seller they are serious about purchasing the property.
Exclusion: Any item that is not included in the sale of a home or property, such as appliances, furniture, personal property, electronics, and chandeliers.
Expired: A property that a seller and the listing agent agreed to sell for a specified period but has not yet sold.
Estate: A trustee who is in charge of a homeowner's property that is being sold posthumously.
Fixer: A type of property that needs upgrades or renovations to make it livable or up to modern standards for occupancy.
Fair Market Value (FMV): The benchmark for property value determined by a buyer's willingness to pay for the property and the seller's acceptance. This value is obtained when neither party is desperate for a sale, and both are knowledgeable about the home's good and bad points.
Fixed Rate Mortgage: A home loan with a fixed interest rate for the loan's lifetime. Federal Housing Administration (FHA) loans are insured by the Federal Housing Administration and are ideal for low-to-moderate-income borrowers as they require a lower minimum down payment and credit scores compared to a standard loan.
For Sale by Owner (FSBO): When a homeowner lists their property for sale without the representation of a real estate agent.
For Sale by Agent: A property that a real estate agent or Realtor® lists for sale on the open market for their own sale purposes.
Flipping: The process of selling a home shortly after purchase to turn a profit by making cosmetic updates and upgrades.
Foreclosure: When a homeowner defaults on mortgage payments, the mortgage lender takes possession of the home and resells it to recover losses.
Garage: a sheltered four-sided structure with a convenient retractable door to protect your vehicle and recreational goods.
Garden level (or garden level basement): An intriguing term for a living space located somewhere in between the basement and first floor. In a garden-level unit, expect the windows to be at eye level with the street.
Great room: The perfect hub for an open and warm family home - an all-encompassing area that entails the living room, family room, and dining room.
High-rise: A building that rises seven or more stories into the sky.
Historical district: A protected area under historical governance. Be aware that any changes made to a building in the district require prior approval to preserve its legacy.
Home warranty: Enjoy peace of mind with a contract that covers discounted repairs and replacements for major home functionality such as plumbing and electricity.
Homeowner’s association (HOA): Join forces with other homeowners in your community to set guidelines everyone must follow. It’s like being part of a team!
Homeowners association fee: When living in an HOA community, expect a monthly fee to cover the cost of maintaining all properties, amenities, and common areas.
Homeowners insurance: Protect your investment with insurance that covers losses and damages to your home and belongings. It also provides liability coverage against accidents that may occur in your home or on your property.
iBuyer: A real estate investment company that specializes in quick cash offers on homes (but be careful, it may not result in the best deal for you).
Inclusions: Extras like appliances, furniture or decor that the seller has thrown in the deal, possibly as an added incentive.
Inspection: A professional examination of the property's condition that you, as a buyer, should get done before closing.
Interest (or interest rate): The percentage of your mortgage payment that is paid to your lender. Be sure to understand whether it is a fixed rate or adjustable.
Irrigated lot: A property that comes with valuable irrigation rights to a well or other water source.
Irrigation well: A well that's located within a lot and used to keep your gardens lush and green with sprinklers.
"Kick-out clause" (or the right of first refusal): A contractual provision giving property sellers the power to keep advertising their house during a contingency period. Suppose your buyers have to sell their current property before they can take ownership of your house. In that case, a kick-out clause legally lets you give them the boot (after a certain grace period, of course) if a better offer comes up. Note: Although these deals are rare, they do occur in some Colorado neighborhoods, so it's best to double-check with your Realtor® before making any offers on a house to ensure the property does or doesn't have a "kick-out" clause.
Landscape: This term refers to the visual or functional enhancements made to a property's outdoor spaces. Landscaping can include the installation of gardens, walkways, or pavers, and other outdoor modifications.
Lease: A legally binding document that specifies the conditions of a rental agreement between a landlord and a tenant for a property.
Lien: A legal claim granting possession rights to a property owned by another person until a debt is settled, which can result from an unpaid mortgage or work performed on the property that remains unpaid.
Listing: A property available for sale and listed on the local multiple listing service (MLS), accessible to both buyers and real estate agents.
Listing Agent: Also known as a seller's agent, this professional is a real estate agent or Realtor® who represents property owners in the sale process, working to ensure the best possible outcome for their clients.
Listing Agreement: A legally binding contract that empowers a real estate professional to market and sell a property on behalf of its owner.
Loan: The sum of money a buyer can secure from a financial institution, a private lender, or a third-party lender at prevailing interest rates, in order to purchase a property listed for sale.
Manufactured Homes: Often referred to as "mobile homes," manufactured homes are residential structures built predominantly or entirely in off-site factories and then assembled at their final location.
Master-Planned Community: A thoughtfully designed residential area rich in amenities, created to enhance the living experience for its inhabitants.
Mid-Rise Building: A structure consisting of five to 12 floors.
Model Home (also known as a Show Home): A demonstration-only residence used to showcase living spaces to prospective residents of a subdivision. No one will occupy the model home until all other homes in the area have been sold.
Months of Inventory (MOI): An indicator that gauges the equilibrium between buyers and sellers in the housing market. MOI signifies the hypothetical number of months required to sell all available homes for sale at the current sales pace. A balanced market comprises of four to six months of supply, while a buyer's market displays a higher number and a seller's market a lower figure.
Mortgage: A long-term loan (typically 30 years) used to finance the acquisition of property, with monthly installments functioning like rent payments that also contribute to a long-term investment.
Mortgage Broker: An intermediary who assists borrowers in finding the most suitable mortgage deals by comparing various lenders and options on their behalf.
Mortgage Insurance: A safeguarding policy that comes into effect if a borrower is unable to fulfill their loan payments. Typically, lenders insist on mortgage insurance when the down payment made is insufficient.
Mudroom: A designated compact space or entrance dedicated for taking off footwear and, often, doubles as additional storage space.
Multi-family Property: A type of residential building that accommodates more than one household in separate units within the same structure.
Multiple Listing Service (MLS): A cooperative digital platform where home sellers, through their agents, showcase their properties for sale to other agents representing potential buyers. The MLS ensures accurate and up-to-date information pertaining to local listings, for streamlined transactions.
Net Operating Income (NOI): A crucial metric calculating the profitability of a real estate property, taking into account the income generated and ongoing expenses.
New Listings: The collection of properties newly introduced to the market during a specified time frame.
Offer: A strategic document that presents the suggested terms and conditions for a real estate deal. Here, a proficient Realtor® can work their magic and negotiate optimal outcomes for their clients.
Off-Street Parking: Say goodbye to parallel parking struggles! Off-street parking encompasses parking areas away from the roadside, such as private lots, garages, or driveways.
Open House: A scheduled event when sellers open their property for potential buyers to explore and get a feel for the space.
Open Listing: A non-exclusive arrangement in which a seller engages with multiple agents simultaneously, allowing for a more extensive marketing approach.
Open Space (also known as Green Space): Pristine, untouched land that is open to the public, offering a breath of fresh air and recreational opportunities.
Partial Basement: A basement that doesn't extend beneath the entire house is known as a partial basement. Essentially, it has a smaller floor area than the level above it.
Patio Home (Cluster Home): Similar to townhomes, patio homes share walls with neighboring units. The key distinction between them is their size: while townhomes boast at least two stories, patio homes feature a maximum of one and a half stories.
Pending: A property sale enters pending status when an offer has been accepted but the official closing has not yet occurred. It can remain in this state for several weeks.
Personal Property: Items that can be packed up and moved with you are considered personal property.
Pocket Listing: A pocket listing refers to a property for sale that has not been publicly disclosed. The National Association of Realtors® has recently prohibited this practice to promote fair housing.
Post-Closing Occupancy Agreement: This agreement allows sellers to continue residing in their home after closing for a predetermined period. Sellers may pay rent to the buyer, or the buyer may provide rent-free accommodation to strengthen their offer and provide the seller with more flexibility during their move.
Pre-Approval Letter (Pre-Qualification Letter): A statement from a lender that indicates their initial willingness to approve a loan for an applicant, up to a specified amount. This document is also known as a pre-qualification letter.
Pre-approved: A state in which potential homebuyers have their financial documents reviewed, and they have been granted a specific loan amount for purchasing a property.
Preliminary report: A document created by a title insurance company to identify and address any issues before issuing a policy, ensuring a smooth transaction.
Pre-qualified: The status of a homebuyer who is deemed eligible for a loan, although the exact amount is yet to be determined.
Principal: The initial sum borrowed for purchasing a property, excluding any interest.
Private Mortgage Insurance (PMI): A type of insurance that safeguards the lender, rather than the borrower, against potential default on mortgage payments.
Probate sale: A property sale that occurs when a homeowner passes away without leaving a will that names an heir to inherit the house. Typically, an estate attorney or representative is responsible for selling the property to distribute the proceeds among surviving family members.
Proof of Funds (POF): A document or set of documents proving that a buyer has sufficient funds available to complete a particular transaction.
Property tax: A tax levied on property ownership, with rates varying by location. Interestingly, Colorado boasts some of the lowest property tax rates in the country!
Purchase and Sale Agreement (PSA): A binding contract between a buyer and seller that outlines the final price and conditions of a property transaction.
Quadruplex (4-plex): A specially designed residential property consisting of four individual living spaces. Quadruplexes offer multi-family housing options for those seeking a unique and versatile living situation.
Real Estate Owned (REO) Properties: Foreclosed properties that have been repossessed by mortgage lenders or investors. These homes present potential opportunities for savvy buyers looking for discounted properties in the real estate market.
Realtor®: A real estate professional committed to exceptional service and ethical practices. Realtors® assist with buying and selling properties, guiding clients through the complexities of the market. As voluntary subscribers to the Code of Ethics, Realtors® ensure fairness and professionalism at every stage of the transaction, fostering trust among all parties involved.
Refinancing: The act of securing a new mortgage agreement to replace an existing loan. By refinancing, borrowers can benefit from reduced interest rates, improving their financial situation and saving on monthly repayments.
Relocation (Relo): The process of selling a home as a direct result of a job transfer. Relocation sales require unique considerations and, often, quicker timelines than traditional real estate transactions.
Reverse Mortgage: A financial tool designed for seniors (62 years or older) to tap into their home equity and secure funds for retirement. Reverse mortgages allow older homeowners to convert their property's value into income, enhancing their financial stability without the need to sell their beloved home.
Seller Disclosure: A document provided to potential buyers that outlines any known issues with a property, as well as any home improvement projects completed by the current owner during their time in the residence.
Short Sale: A situation in which the selling price of a property is lower than the amount remaining on the mortgage, requiring lender approval for the transaction to be completed.
Split-Level (also known as Tri-Level): A unique architectural style of a home that features a minimum of three staggered levels, with the third level positioned directly above the first, and the second level offset to the side, all connected via staircases.
Staging: The art of strategically preparing and furnishing a home to appeal to a wide range of buyers, utilizing tasteful and elegant design elements to showcase the property's best features.
Title Insurance: The concept of title, which refers to the legal right to own a property, can often be more intricate than one might assume. Title insurance serves as a safety net for both the purchaser and lender in case any disputes or divisions arise over the property's ownership.
Title Search: This process involves scouring public records to verify that the person selling a property holds complete legal rights to do so. If any flaws or discrepancies are discovered, it can cause significant issues in finalizing the transaction.
USDA Loan: This is a form of financial support provided by the United States Department of Agriculture, aiming to assist rural Americans through their Rural Development Guaranteed Housing Loan program.
VA Loan: A mortgage alternative designed specifically for veterans of the U.S. Armed Forces. These loans receive partial backing or guarantees from the Department of Veterans Affairs.
Withdrawn (or Canceled) Listing: A withdrawn listing refers to a property that was once available for sale but has since been taken off the market. This term can also denote a situation where a prospective buyer decides to retract their offer.
Zillow's Zestimate: The Zestimate is Zillow's estimation of a property's value, serving as a helpful starting point when determining home prices. However, it's crucial to understand that a Zestimate is not equivalent to an official appraisal and may not always be accurate. According to Zillow's data, Zestimates fall within a 20 percent range (+/-) of the final sale price 82.5 percent of the time, which means it could either overestimate or underestimate a home's true value by 20 percent.
Zoning Categories: Zoning is typically divided into three main categories: residential, commercial, and industrial. Zoning codes dictate the permitted types of structures and land use for a specific lot. Each category comes with its own set of regulations and allowances based on the zoning designation.