What is the first step in the home buying process?

Getting pre-approved through a mortgage lender. Why? You need to know how much you can borrow, in order to know the price point of a home you can afford.

I'm a home buyer. How much do I have to pay you to help me buy a home?

Approximately $0. Traditionally, the Seller pays for my commission as the Buyer's Agent, as well as their Listing Agent's commission. All of my Buyer Agency agreements are structured such that you are never on the hook for paying me.

How will you find potential buyers/renters for my property?

According to the National Association of Realtors, 87% of home purchasers used an agent. As a result, my primary focus is marketing directly to Realtors, as there is an 87% chance that the buyer of your property will have found your property via their agent. I do so through a variety of tactics, including but not limited to, social media, the MLS, attending Realtor only meetings, email blasts, etc.

COMMON QUESTIONS

You’ve Got Questions, I’ve Got Answers..

How long does it take to buy a home?

If you're paying with cash, the whole search and under contract to close period could take less than 2 weeks. If you're getting a loan, the time varies! The pre-qualification and search period typically lasts 30-60 days, while the under contract to close period is typically 30 days or less. Altogether, the average is about 9-18 weeks (60-120 days). Given the situational differences, it is best to consult with your Realtor on your particular timing needs and goals sooner rather than later.

What is a Seller's market?

A Seller's market is when a Real Estate market's conditions favor Sellers. Indicators of a Seller's market include:

Less than 5 months of housing inventory (means demand is high
and supply is low!)
Increasing home values
Low number of days on market
Interest rates moving downward (cheaper borrowing of money increases Buyer demand/competition)

What is a Buyer's market?

A Buyer's market is when a Real Estate market's conditions favor Buyers.
Indicators of a Buyer's market include:

More than 5 months of housing inventory (means supply is high
and demand is low!)
Decreasing or steady home values
High number of days on market
Interest rates increasing

What is an ADU?

ADU stands for Accessory Dwelling Unit. An accessory dwelling unit is a secondary living space on a lot zoned for a single-family residence. For example, an ADU may take the form of a finished basement with a private entrance, a mother-in-law suite above a garage, etc.

When is the best time to buy?

There are a few sweet spots throughout the year where conditions become slightly more favorable for Buyers. However, there are many factors that come into play for your unique situation, such as an existing lease terms, present and future interest rates, what's going on in the market, etc. In short, it is largely based off of your circumstances and goals!

When is the best time to sell?

There are a few sweet spots throughout the year where conditions become slightly more favorable for Sellers. However, there are many factors that come into play for your unique situation, such as your timing needs, your moving situation, etc. In short, it is largely based off of your circumstances and goals! However, Denver is currently in a strong Sellers' market, meaning that right NOW is a great time to sell.

What is earnest money?

Yes! Earnest money is similar to a deposit when renting a place. It is made in good faith to demonstrate to the seller that the buyer’s offer is legitimate. As a real estate agent, you should ask your client for the earnest money as a deposit in the form of a check or cash. The amount is usually 1-2% of the selling price and essentially takes the property off the market. The money also gives the buyer extra time to conduct a title search, get an inspection and property appraisal, and financing.

Should I do a home inspection?

Yes! Home inspections are required if you plan on financing your home with an FHA or VA loan. For other mortgage programs, inspections are not required. However, home inspections are highly recommended because they can reveal defects in the home that are not easily detected. Home inspections bring peace of mind to one of the biggest investments of a lifetime.

How much do you need for a down payment?

The national average for down payments is 11%. But that figure includes first time and repeat buyers. Let’s take a closer look.

While the broad down payment average is 11%, first time homebuyers usually only put down 3 to 5% on a home. That’s because several first-time home buyer programs don’t require big down payments. A longtime favorite, the FHA loan, requires 3.5% down. What’s more, some programs allow down payment contributions from family members in the form of a gift.

What steps should I take to get my house ready for sale?

First impressions are crucial, particularly in the real estate business. Potential buyers, whether physically visiting or taking a virtual tour, will be searching for reasons to negotiate a lower price. It's essential for clients to ensure that the HVAC, plumbing, and electrical systems are all functioning correctly. Each room should appear tidy and clutter-free, with no visible damages.

Is it necessary to have a home inspection before selling?

Arranging a pre-sale home inspection is always a smart move if you want to get top dollar for your client's property. Some homebuyers might be hesitant to purchase a house without a home inspection report, and many may even hire their own inspector. To avoid any unexpected surprises, it's best to be prepared.

How long can I expect it to take to sell my home?

The time it takes to sell a home can vary – once it's listed on the market, it might take anywhere between four to six weeks until it's sold. However, in a hot market, a seller might see their house being sold within a week. On the other hand, if the market slows down or issues such as negotiation, limited exposure, or the condition of the house come into play, the property could remain unsold for months.

How do I determine the selling price of my home?

The selling price of a home depends on several factors, and as a realtor, it's essential to guide your clients through this process. The initial step in figuring out the right list price for your home is obtaining a comparative market analysis (CMA) from a knowledgeable real estate agent. Factors such as the neighborhood and comparison to similarly-sized homes play a significant role in determining the price. Additionally, consider the age and condition of the house - is it in need of major repairs? This might lower its value. Lastly, it's crucial to keep in mind the current market situation, as home prices are influenced by supply and demand.

Why does my home's assessed value differ from its market value?

The assessed value of a property is assigned by a public tax assessor for tax purposes and usually takes place annually. On the other hand, the market value represents an agreed-upon price between a willing buyer and seller. It's not uncommon for the assessed value to differ from the market value. For homeowners, this can be a double-edged sword, as an increase in assessed value means higher annual taxes. However, a higher assessed value can also boost the property's market value when selling.

What does a real estate agent's commission fee look like?

In most real estate transactions, the seller pays the agent via commission, rather than a fixed fee. Generally, a real estate agent's commission amounts to 5–6% of the property's final selling price. The commission fee is often shared equally between the buyer's agent and the seller's agent, with both parties receiving 2.5–3%.

Can real estate prices be negotiated?

Absolutely! In the world of real estate, negotiation is almost always on the table. There's often a discrepancy between an initial property listing price and its ultimate selling price. The state of the market, such as supply and demand, can dictate the flexibility in price negotiations. For buyers, a market with lower demand than supply may yield a lower purchase price. Conversely, sellers should generally anticipate selling for less in such a market. However, surprises can happen: a motivated buyer might appear and offer the full asking price. No matter the situation, negotiation is a crucial element of the real estate industry.

What is the initial step when considering buying a home?

The very first thing a homebuyer should do is to get pre-approved for a mortgage. Having a mortgage pre-approval makes the home-buying process smoother and increases the chances of successfully purchasing a new home. If a potential client reaches out to you, assist them in undergoing the tenant screening process, and connect them with a trusted mortgage corporation and advisor.

Is it necessary to sell my existing property before purchasing a new one?

The answer to this question depends on individual financial circumstances and the availability of temporary housing options. If a client needs more equity to buy a new home or fulfill mortgage requirements, it's generally recommended to sell their current property first. However, they'll need to arrange accommodations like staying with friends or relatives or securing a short-term rental during the transition.

How important is a home inspection?

A home inspection is highly recommended and crucial when buying a property. Either arrange a home inspection for your client or advise them to do so. Professional inspectors are skilled at evaluating the overall condition of a property, identifying structural and cosmetic issues as well as compliance with local codes. Additionally, a home inspection gives you valuable insights into the property's true value and helps in making an informed decision.

Should I do a final walk-through?

How many houses should I view before buying one?

The number of houses to view before making a decision varies greatly depending on personal preferences. Fortunately, virtual tools make it even easier to explore properties from the comfort of home. Leveraging online resources, such as detailed photos and virtual tours, allows homebuyers to browse countless listings. Once a shortlist is created, you can arrange in-person visits to help finalize a decision.

What if I change my mind about purchasing a specific house?

It's completely normal to have second thoughts or reconsider a property. However, it's essential to be aware that backing out of a deal may result in a forfeiture of the earnest money, usually consisting of 1-2% of the home's selling price.

Can you explain what a mortgage is and how it works?

A mortgage is a type of loan specifically designed to fund property purchases. Since most people can't afford to buy a house outright, mortgages offer a secure means to access financing. Mortgages typically come with fixed interest rates and can be paid off over a 15 or 30-year term. If needed, borrowers have the option to refinance their mortgage in the future to accommodate changes in financial circumstances.

What does the escrow process involve?

Escrow refers to the involvement of a neutral third party who helps manage and safeguard the exchange of money, property transactions, and associated documents. This third party holds the funds and paperwork in a trust until all the conditions of the sale are met. When you're putting down an earnest money deposit, it's a good idea to use an escrow account.

What is the process for paying my agent who is selling my house?

When selling a house, agent fees typically range between 5-6%, with 3% going to your agent (the seller's agent) and the other 3% to the buyer's agent. As the seller, you'll pay both agent fees from the proceeds of your sale. Don't worry! There's no need to prepare large checks or stacks of cash. Instead, a closing agent takes care of distributing funds during the closing process. They hold the buyer's money in an escrow account—a secure, third-party account—before distributing payments, including to your agent, when the time comes.

What percentage of the sale price do sellers typically pay in closing costs?

Sellers can expect to pay around 8-10% of the total sale price in closing costs. Out of this, usually 5-6% goes towards realtor commissions. The remaining percentage consists of various other expenses, such as: Title search-$150–400, Title insurance-$1,000–4,000, Escrow fee-0.5% of the final sale price, Transfer tax- Varies by state, and Prorated property taxes- Depends on local rates and time of sale. Keep in mind, if you choose to cover a portion of your buyer's closing costs, the cost typically ranges from 2-5% of the sale price.

Should I consider covering my buyer's closing costs?

It might be a good idea to cover your buyer's closing costs if it encourages a more attractive offer or speeds up the sale process. Typically, this assistance is offered in the form of a credit that the buyer can use during the closing. Buyers can potentially submit a higher offer if they need to pay less upfront, and paying their closing costs can help with that. This not only minimizes their mortgage amount, making it easier to qualify for a loan, but it also increases the chances of a smooth transaction.

What types of repairs are commonly required during home transactions?

When purchasing a home, the type of required repairs largely depends on the type of loan you're using. With a conventional loan, banks generally focus on significant structural concerns that could affect the home's value, such as foundation problems or a deteriorating roof. On the other hand, Federal Housing Administration (FHA) loans generally have more extensive repair requirements. Common repairs for FHA loans might include: addressing peeling paint, covering exposed wiring, repairing damaged gutters, and/or adding handrails to staircases. Keep in mind that states and banks may have their own unique requirements, so always consult local guidelines to ensure compliance.

How can a real estate agent assist me in selling my home?

Real estate agents have extensive knowledge about the local market, helping you sell your home efficiently and for the best price. Real estate agents are well-versed in the local market, which means they're aware of how your home stacks up against the competition. They can make educated recommendations on the right price to sell your home, as well as tips for increasing its value. They also handle all the necessary paperwork, promote your home to potential buyers, and organize open houses. With the help of a real estate agent, you'll have connections to vital resources, like closing agents and skilled listing photographers, making the process of selling your home a breeze.

What exactly is title insurance and why is it important?

Title insurance is a valuable form of protection for homeowners, shielding them from any past claims that may arise due to unpaid taxes or unsettled disputes with contractors by previous owners. By having title insurance in place, homeowners are covered for any legal expenses or title disputes they may encounter during their homeownership. There are two types of title insurance available: Lender Title Insurance and Owner Title Insurance. It's generally a wise decision to purchase both insurance policies, with the combined cost being around 0.5% of the home's purchase price. This minimal investment can save you from potential future headaches and offer peace of mind throughout your homeownership journey.

What is the average cost of a home in Denver, Colorado?

As of September 2023, the average cost of a home in Denver is $690,748, according to the Denver Metro Association of Realtors.

Are there any property tax exemptions or assistance programs available in Denver, Colorado?

Absolutely! Denver offers several exemptions and assistance programs for eligible individuals. Examples include the Senior Citizen Property Tax Relief Program and the Disabled Veterans Property Tax Exemption. Additionally, low-income homeowners may qualify for the Property Tax Relief for Low-income Seniors and Disabled Persons program.

What is the market like in my preferred neighborhood?

Once you've found a home you love and want to purchase, your Realtor can help you assess the market conditions in your desired neighborhood. They can provide insight on how it compares to the overall Denver real estate market, as conditions can vary from one neighborhood to another. This information will be valuable in negotiating an offer with the sellers.

What are some of the neighborhoods in Denver, Colorado?

Lower Downtown - LoDo
RiNo (River North Art District)
Highlands
Cherry Creek
Capitol Hill
Five Points
Golden Triangle
Art District on Santa Fe
South Broadway
City Park
Congress Park
Uptown Denver
Central Park
Lowry
Northfield
Washington Park
Sloan's Lake
Baker
University
Lincoln Park
Hilltop
Hale
Country Club
Cory-Merrill
Montclair
Virginia Village
Montbello
Green Valley Ranch

What is property tax and how does it work?

Property tax is a type of tax that supports various entities such as public schools, county governments, special districts, municipal governments, and junior colleges. The revenue generated from property taxes remains within your county and does not fund any state services. The county assessor plays a crucial role in discovering, listing, classifying, and valuing all properties in accordance with state laws. Their objective is to establish accurate property values, ensuring a fair and equitable distribution of the tax burden among property owners. Real property is revalued every odd-numbered year, while personal property is revalued annually. Property tax calculations depend on factors like property classification, actual value, assessment rate, assessed value, and tax rate.

Should I include a Radon test during the home inspection?

Radon gas, the primary cause of lung cancer for non-smokers in the United States, remains undetectable by our senses. Hence, the only way to identify its presence is through testing. It is crucial to prioritize testing for radon gas when opting for a home inspection. If elevated levels are detected, installing a radon mitigation system becomes essential in reducing radon concentration.

Should I get a sewer scope during the home inspection?

If you're purchasing an older home, particularly one that is over 20 years old, it is recommended to invest in a sewer scope inspection. This inspection will uncover any potential problems in the sewage system of the home, which if left untreated, could result in significant expenses down the line.

What happens if my offer is rejected?

When a seller rejects an offer, there is still hope! They might choose to make a counteroffer instead. It's important to remember that a deal isn't completely off the table at this point. Take the time to review the terms of the counteroffer with your Realtor and see if it aligns with your requirements. If it does, accepting the counteroffer will formalize the contract right away. It's worth noting that offers and counteroffers can go back and forth multiple times, as negotiations are a standard part of the real estate process. Each revision brings both parties closer to agreeing on the deal's terms.

What is a bidding war?

A bidding war typically occurs in a seller's market with limited inventory and high demand from buyers. In this scenario, a single home receives multiple offers or bids, allowing the homeowner to select the most favorable one. Interested buyers may continually increase their bids to outbid others, resulting in a bidding war. To secure a bid in a competitive market, it is crucial to have an experienced real estate agent who can offer strategic solutions, such as creative negotiation on dates and deadlines.