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Northern Colorado Home Buyer’s Guide – Common Home Buyer Questions Answered

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Buying a new home in Northern Colorado is a tremendously exciting process. Most people do not buy homes very often, and usually it is the biggest purchase you will ever make. Because of these two things, it makes sense to educate yourself before getting ready to buy a home–especially since the process is ever evolving.

In this post, you’ll find the top questions we hear from home buyers. These are also some of the most commonly misunderstood points as well.

If you have a questions I didn’t answer in this article, please drop me a comment at bottom or give us a call at 970-573-6441!

How much cash do I need to buy a home?

Many people overestimate the cash needed to buy a home. There are three main buckets you’ll want to account for with cash. Since these costs mostly have to do with the loan, we recommend talking to your lender (section 2) in order to figure out costs precisely for your situation.

1. Down payment. This is the primary cash cost to account for.

  • For conventional mortgages, down payments can be anywhere between 5% and 20% of the purchase price. Conventional loans are typically the cheapest on a monthly basis, so if you’re able to put 5% down, this is an outstanding option.
  • For FHA loans, you typically only need 3.5% down.
  • Other programs, such as USDA and VA loans, may require as little as 0% down.
  • Grants and other programs can help cover down payments or provide down payment assistance. Some of these do not need to be repaid.

2. Closing costs. These are the costs of getting the loan. This includes items such as the appraisal, paperwork fees, and more. Closing costs are currently ranging between 3% and 4.5% of the loan fee. However, you may be allowed by the lender to roll these costs into the loan. Alternatively, home buyers may ask the seller to pay their costs as well (though this can reduce the strength of your offer). So closing costs may vary in practice from 0% to about 4.5% depending on your situation.

3. Inspection. You are not expected to be an expert on home condition. Once you find a great home and have your offer accepted, you will want a professional to do a detailed analysis of the home’s condition. This typically costs between $200 and $400. Oftentimes, the seller will fix issues raised in an inspection, more than paying you back for the cost of the inspection.

4. Real estate agents are free for buyers. When a home is listed for sale, the seller typically agrees to pay a fee to any agent who can bring a buyer. Therefore having an expert find you a home and consult on the process is free to you.

We also have a full article dedicating to this topic and it dives a little deeper into these areas. Check out How Much Cash Do I Need to Buy a Home in Northern Colorado.

What is the first step I should take when looking to buy a home?

Find a great lender! Your mortgage lender will be critical throughout the process, not just once you find a home.

  • The lender is an important first step to take prior to looking at homes.
  • In about 15 minutes, you’ll learn what price you are qualified.
  • Learn what monthly payments would be at various price points.
  • Lender pre-approval letters are required when making offers.
  • Your lender and real estate agent will work closely together through the home shopping and buying process.
  • Don’t have a lender? You can call your bank and/or let us refer you to one.
  • If you want to take advantage of grants and first-time home buyer options, check out our First Time Home Buyer Program here.

How do I find a great real estate agent?

Now that you have a lender, you will want to find a truly good real estate agent to help find the best home for you. However, you do not need to spend a lot of time interviewing. Here are some great tips.

  • Home sellers pay for real estate agents, even for the buyer’s agent. This is pre-negotiated into the listing contract, which means you can engage the help and expert counsel of a real estate agent at no cost to you.
  • Find an agent that understands your situation, has time to work with you, and has effective support and systems to ensure you find the right home for you.
  • The Ferguson Team has been helping buyers in Greeley since 1978, with an excellent track record and a 5 star customer satisfaction rating. Our agents are supported by an entire team, ensuring you get top notch service and availability when you need it. The team environment surpasses what individual agents can provide.
  • Once you have found an agent, begin your search. Your agent will find homes for you, setup showings, negotiate offers and contracts, work with the lender, and act in your best interest.

We of course want to be your real estate agent, but understand you’ll want to shop around and find the best one for you. Give us a call at 970-573-6441 or Contact Us online.

How will my real estate agent and I find a home?

Both you and your agent will be busy shopping for the biggest purchase of your life! This is the fun part. At this point, you should be working with a single agent.

  • Your agent will ask what you are looking for in a home, such as location, number of bedrooms and bathrooms, size, yard, style, age, and more
  • Your agent will setup a search and send you candidate homes on an agreed upon interval
  • You should search too! We recommend www.coloproperty.com. It is based on the same database real estate agents use, so is therefore much more accurate than popular national sites such as Zillow, Trulia, and Realtor.com. Tip: Use the search option to “Hide Listings Under Contract” to see only what’s truly available.
  • Your agent will setup showings and take you to see homes of interest. Shop around so you feel comfortable with the prices and options available in your market.
  • You can visit open houses and new construction sites on your own. Just be sure to tell them that you are working with an agent. That way, you will be able to be represented throughout the entire process and there won’t be confusion later. If you’re considering a new home, be sure to check out our post Should I Buy a New or Existing Home for full detail.

How do I make an offer?

Both you and your agent will be busy shopping for the biggest purchase of your life! This is the fun part. At this point, you should be working with a single agent.

  • Once you’ve found a home you like and have shopped around a bit, you’ll want to make your offer.
  • You will determine the offer price, but your agent will provide guidance based on the market, concessions you need, and other variables. Sometimes houses sell for more than the asking price.
  • Before getting to this point, you should understand from your lender how much cash you will need for the down payment and whether or not you need to ask for closing costs.
  • Once everything is ready, your real estate agent and lender will work together on the offer.
  • If the seller likes it, they simply sign it and you’ll be under contract! They may also disregard it or counter-offer.

What happens when I’m under contract?

Now that you’ve chosen a home, it’s all about counting down until ownership and ensuring everything is in place and ready, particularly with the loan.

  • You will typically need to provide earnest money within 24 hours of having your offer accepted. This is typically around 1% of the purchase price of the home. It is your money that will be used for any cash needed at closing, but it is simply being held by the title company in the interim.
  • Based on the needs of you and your lender, closing typically occurs 35-45 days after having your offer accepted.
  • Your lender will work with you to finalize the mortgage.
  • Your real estate agent will work with you toward specific dates in the contract. These dates allow you to perform certain checks, and then back out of the contract if needed. This can apply if, for example, you are unable to get your loan or the inspection uncovered something unacceptable. As long as your agent works within the contract, you will typically get your earnest money back.
  • You will order an inspection (see section 1). This will provide you a detailed report of the home’s condition. Based on the findings, you may negotiate with the seller on fixing items that may be needed to be addressed whether they sell to you or someone else.

What happens at closing and when do I move in?

Up until the last day, it will be a whirlwind of activity. Closing day is very fun and a great relief for most people.

  • By this point, your lender will have told how much money you need to bring to closing and whether by cashier’s check, wire, or something else.
  • A title company will facilitate the final paperwork and money transfer. Final loan documents will be signed by you, as well as other forms required for the transfer of real estate.
  • Closing typically takes 1 hour.
  • Some utilities will be transferred by the title company, some you will need to call (list will be provided).
  • Property taxes are split evenly to the date of closing, as are other common monthly/annual costs, such as water.
  • You hand over your check and the seller hands over the keys!
  • You are now free to move in.

Thank you!

I hope this post helps answer your top questions about buying a home. If you have more questions, drop us a comment here, call us at 970-573-6441 or Contact Us online. Thanks for reading!

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