We’ve said it before and we’ll say it again: deciding to buy a home is one of the most important decisions you will ever make. The only other more important decisions you’ll likely have to make are whom to marry and when and where to buy your second and third home. That is why we, at Corken + Company, cannot stress enough how important it is to have the right realtor by your side. One that will prepare you for the competitive Denver market and negotiate the lowest price for the most valuable home. And yet, even before you start venturing out on days of showings, there are some important parts of owning a home that should be wholly considered.
We have extensive resources to assist in this important preparation work and those resources actually begin here with this biweekly blog. Below we have summarized a list from ReColorado outlining 5 things to consider before purchasing a new home.
***First-time homebuyers in particular should read this list in conjunction with one of our recent posts that details many of the considerations below as they apply specifically to that life-changing first purchase. And actually, before you have even decided to buy at all, a good place to begin your real estate research might be here, where we weigh the pros and cons of leasing versus buying.
Simply put, where do you want to live? Not so simply put…what sort of community are you looking for, how close to work do you want to be, what every-day conveniences or recreational areas do you want in proximity, what about the weather, how close are major highways, hospitals, and airports, does the school district have a good reputation, etc. Depending on your criteria, this list of questions to ask yourself may seem endless but they are still questions you are going to want to know the answer to. As you develop those answers, you may be pleasantly surprised how your list of newfound requirements narrows your options to a more manageable array.
This is a big one. Reaching out to a lender and getting pre-approved will not only speed up the process once you have found a home you would like to make an offer on, but it again will narrow your options in an advantageous way. The home search can be exhausting and touring a bunch of homes you can’t afford will only make it that much more physically and emotionally draining.
Budgeting can be the most complicated part of the home-buying process if it isn’t addressed early and approached realistically. Speak with your realtor at length about how the process works and then do your own research. Know that the more money you are able to put down the better, however there are plenty of options to put less money down initially if the traditional 20% isn’t a viable option. A smaller down payment will be accompanied by mortgage insurance which should be included in your budget planning.
It is also important to account for extraneous costs associated with moving. Consider movers, storage, temporary housing, and overlapping mortgage payments as just some of the factors that will affect the cost of your home and your move overall. Remember too that you will be responsible for all utilities and maintenance. You also might need to buy new furniture or perform initial renovations if your home isn’t move-in ready. These obligations are inevitably going to eat up some of the budget.
3) Type of Mortgage
A thirty-year, fixed-rate mortgage is standard but that doesn’t mean you are limited to those constraints. If you’re financially able, you can pay your home off in less time with a fifteen-year or twenty-year mortgage term. You can also take longer with a forty-year mortgage. Due to compounding interest, do keep in mind that the sooner you pay your home off, the less you pay overall.
4) Type & Age of Home
As we touched on before, how old your home is and how big your home is will determine the cost and depend heavily on your budget. An older home may need renovating or repairs. It also may not be as energy efficient as a newer home. Likewise, a larger home will cost more to upkeep. Homes with pools or hot tubs, large lawns, and other special features will come with their own financial and maintenance requirements. Smaller condos and townhomes, as well as homes that belong to a larger community, will have an HOA that requires monthly dues.
You will of course want to protect one of your largest investments. Homeowner’s insurance is standard but there are additional policies you can get that offer additional protection. Depending on where you live, you may want special protection against certain natural disasters like floods or fires. Or there are home protection plans which are designed to aid in routine home maintenance such as replacing an HVAC system. Either way, it is smart to set up an emergency maintenance savings account to ensure you can replace a broken washing machine, cracked window, or leaning fence.
According to the Denver Metro Association of Realtors, the average home price in Denver as of September 2020, was $606,330, the highest ever. With an investment like that on the line, your realtor and the prep work and research they guide you in completing will make all the difference. Choose Corken + Company, providing real estate solutions without limits, and let’s get started.