Starting the Denver Home Buying Process

BEFORE YOU START YOUR SEARCH AND PREVIEWING PROPERTY

Call a lender to get “pre-qualified”, or better yet “pre-approved”.  This is a service that can be invaluable to you for three important reasons:

1. It will establish what price range is appropriate and what your approximate monthly payment will be.
2. You can ask your lender the amount of money they will require for both the down payment and closing costs.
3. When you establish the home you wish to buy, being “pre-qualified” or “pre-approved” puts you in a strong position when your contract is being presented.  This provides sellers with a verification of your financial position and gives you the competitive edge in relation to competing offers.

You may choose a lender of your choice or we can recommend experienced companies with whom we have worked with.  Go to the “Preferred Lenders” link for more information.  Keep in mind that we do not accept any third party compensation for referring a lender or any other third party vendor.  We are only recommending qualified Brokers who have shown a level of professional consistency in helping our clients. Having a surprise at the last minute can cost you a lot of money.

This is a list of documents most lenders will require in order to process your mortgage application.

Lenders may also ask you about the origin of your down payment. If money for down payment is a gift from a relative, supply the lender with a copy of a gift letter and copy of gift check. The gift letter states that the money will not have to be paid back.
Having these items on hand when you visit with a lender will help speed up the application process.

Keep in mind that different lenders may have slightly different information requirements, so ask your lender what you may need to start your loan process.

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Choosing a Lender

COMPARING LENDERS

Fact: A mortgage loan is typically the largest and most important financial commitment or decision the average person will ever make.  Once you have one, it is usually your single biggest monthly financial obligation.  Few resources exist to teach those seeking home financing how to evaluate and compare lenders.  Beyond interest rates, very few people really know what to look for or what questions to ask. 

Point: When purchasing or refinancing real estate, the RIGHT financing is critical and the right service to attain that financing is paramount.  Bad advice or poor service can have an extremely negative impact on the experience of buying a home.  The wrong loan or a bad lender can greatly undermine your financial situation, keep you from getting the best deal and hurt your chance to purchase your dream home.  Your lender should be helping to create an excellent investment opportunity for you.

Ask: Verify that your potential lender has years of experience in the industry. You will want a Loan Officer who will listen to your needs, financial goals and work with you as a financial planner to help you find the best price, rate and program to fit your needs.

Check Out: Our lender’s page for a list of lenders we have had positive experiences with in past transactions.

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How We Represent You

No two properties are exactly alike, and no two transactions are alike. Homes differ and contract terms differ. Having a Realtor® looking out for your best interest and who has been involved with many transactions to protect your biggest financial purchase is crucial.  As your Buyer’s Agent, we will help you with information detailing market conditions, financing options, and finding the right home for the right price.

We will successfully project manage your real estate needs from the beginning of the process all the way through to the end.  Once we find a home for you to purchase, we will prepare a market analysis of the property to help us determine a fair price and write the offer. Sometimes you may hear from friends or family that your offer should be a certain percentage below asking price. It really depends on each market and neighborhood and the basic laws of supply and demand. Once that offer has been written, signed and submitted, the Seller will accept the offer as written, reject it, or submit a counter offer.  A counterproposal can be as simple as changing dates and/or changing price. We will then negotiate the best price and terms for you.

Our Services & Duties to You
Whether we represent you as a Transaction-Broker or a Buyer’s Agent, we shall perform the following Uniform Duties when working with you:

Broker shall exercise reasonable skill and care for Buyer, including but not limited to the following:

1. Performing the terms of any written or oral agreement with Buyer;
2. Presenting all offers to and from Buyer in a timely manner regardless of whether Buyer is already a party to a contract to Purchase the Property;
3. Disclosing to Buyer adverse material facts actually known by Broker;
4. Advising Buyer regarding the transaction and to obtain expert advise as to material matters about which Broker knows but the specifics of which are beyond the expertise of Broker;
5. Accounting in a timely manner for all money and property received; and
6. Keeping Buyer fully informed regarding the transaction.

Broker shall not disclose the following information without the informed consent of Buyer:

1. That Buyer is willing to pay more than the purchase price offered for the property;
2. What Buyer’s motivating factors are;
3. That Buyer will agree to financing terms other than those offered;
4. Any material information about Buyer unless disclosure is required by law or failure to disclose such information would constitute fraud or dishonest dealing; or
5. Any facts or suspicions regarding circumstances that could psychologically impact or stigmatize the Property.

Additional Duties of Buyer’s Agent:

1. Promoting the interests of Buyer with the utmost good faith, loyalty and fidelity.
2. Seeking a price and terms that are acceptable to Buyer
3. Counseling Buyer as to any material benefits or risks of a transaction that are actually known by Broker.

BUYER’S OBLIGATION TO BROKER. Buyer agrees to conduct all negotiations for the Property only through Broker, and to refer to Broker all communications received in any form from real estate brokers, prospective sellers, or any other source during the Term of the contract. Buyer shall also represent that Buyer IS or IS NOT currently a party to any agreement with any other broker to represent or assist Buyer in the location or purchase of property.

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Your Home Search

At DenverCityLiving.com you can search all properties listed in the MLS and save your searches.  You can also sign up for a Denver area Dream Home search which will automatically send you listings matching your search criteria as they hit the market.

These days everyone uses the internet to browse listings but by working with us you will have an additional advantage in your home search and purchasing process.

• We have access to available properties in all neighborhoods and in all different price ranges within your search criteria.  We work closely with other Real Estate Brokers networking in regard to other available properties.
• We will show you every available property that meets your unique specifications, both financially and personally. We are fully invested in your complete and total satisfaction
• We know real estate values. And can answer your concerns regarding price, zoning, neighborhoods, schools and any other pertinent information that is important to you.
• We know the tax structure of the community’s services.  And can intelligently answer questions such as cost of maintenance and utilities.
• We will answer all questions objectively and honestly.
• We are familiar with local lending institutions, know how much of a down payment will be required, the approximate monthly payments, and what the approximate closing costs will be.
• We will help guide you through the complex maze of the title commitment and other legal documents.  We want to help you protect your interest and investment.
• We operate under a strict Code of Ethics enforced by the NATIONAL ASSOCIATION OF REALTORS®. We assure you the most competent, professional, caring and ethical performance available.

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You Found Your Dream Home! What’s Next?

You have found your Dream Home now its time to write a purchase contract!
When you find a home that you wish to purchase, communication with the selling party is done by means of a written offer.  At this time we will help you determine an offer price based on market comparable's.  A check will be required at this time, which is referred to as “earnest money”.

When the seller accepts this offer it becomes a legal contract.  Our real estate firm uses two basic forms of state approved contracts in Colorado which both require the following information:

Your Name
How you wish to take title to the home.

The amount of earnest money deposit
At the time a written offer on a property is initiated, you will be required to include a personal or cashier’s check as earnest money. An earnest money promissory note can be used for certain circumstances Colorado law requires the deposit to be made within 24 hours after a fully executed contract. This amount is credited to the buyer as partial down payment and represents your intent to purchase the property.  If the offer is not accepted, this amount will be returned to you in full.

Depending on the price of the property, you should anticipate typical earnest money to be 1-3% of the purchase price.

The purpose of earnest money is to establish good faith.

At this time you will also present your pre-qualification or pre-approval letter from your lender, thus strengthening your offer.

Inclusions and exclusions
Items to be included with and excluded from the home.

Title insurance policy
The seller generally pays for this item.  If you are obtaining a loan, there may be additional endorsements/fees for which payment will be required.

Date for closing
A typical closing is 30 days from contract acceptance.  It can be negotiated earlier or later depending on the Buyer’s and Seller’s needs.

Date of possession
Although this is negotiable between you and the seller, it is customary in Colorado for possession to be one to three days after closing.

Signatures
In order to be fully protected, fax signatures are acceptable during the contract process however originals may need to be obtained.  

The contract has important legal consequences and if you desire the services of an attorney and do not currently have legal counsel in Colorado, we would be happy to provide you with a list of attorneys.

Counter proposal
Depending on the terms of the contract the sellers may “counter” your initial offer.  You then have the opportunity of accepting their proposal; declining their offer, (thus canceling the contract) or submitting a whole new offer.

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Is a Home Inspection Necessary?

Yes! If you are purchasing a re-sale property, it is in your best interest to have a thorough home inspection.  Included in this type of inspection are:  Appliances, plumbing, electrical, heating/ventilation, bath/kitchen fixtures, basements, crawl spaces, garage, roof, attic, insulation, and general maintenance of the home.  Pools, hot tubs, sprinkler and security systems and structural evaluations are not generally included in an inspection of this kind.  The cost of a home inspection generally runs from $225-$350.  Payment is due upon completion of the inspection.  You should plan to be at the inspection, as it is an excellent way to learn about your new home. Inspections generally take anywhere from two to three hours.

A radon test is optional at the time of inspection.  This is an additional charge and usually runs around $100.
Sewer scopes are also optional and run $175-$200

Possible Home Inspectors
Please contact us for a home inspector recommendation. We have worked with many reputable companies in the past.

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Preparing to Move

One month before closing date:

• If you plan on using a moving company, be sure to select a reputable one. Don't forget to check their records on the Better Business Bureau and schedule your move.  We recommend gathering specific information about how the companies charge, their insurance, etc.
• Collect important papers and a list of important phone numbers and store them in a safe place.
• Take inventory: decide what to keep, what to give away or sell and what to throw away.
• Begin packing items that you don’t use frequently.
• Make a list of all of the people/companies that you will need to notify of your new address.
  

Two weeks before closing date:

• If you have scheduled a move with a moving company, call and confirm your moving date and time.
• Notify your current utility, phone, trash and cable companies of your disconnect/reconnect dates. 
• Arrange for cancellation of newspaper deliveries to your current address and new subscriptions to your new address.
• Complete change of address paperwork at the Post Office.
• Begin notifying businesses that reach you by mail at your current address (doctor’s offices, veterinarian, magazine subscriptions, banks, credit card companies, insurance companies) of your change of address.
• Should you have pets, arrange for someone to take care of your pets on moving day.

Utilities
Call Public Service at (800) 895-4999 to arrange the start of your utilities on the day of closing.  In Colorado, the Buyer owns the house the day of the closing so that even if you are taking possession two or three days later, you are still responsible for the home.

Telephone
Call Qwest at 1-800-244-1111 to arrange your telephone service.

Mail
Notify the Post Office using a “Change of Address” form.

Water and Sewer
This service will vary depending on the county. Typically the title company will take care of this for you.

OPTIONAL

Cable Service
Call to cancel your cable service and determine where the nearest drop off location is for any leased equipment. The largest cable television carriers are Comcast at (303) 930-2000 and Direct TV (303) 756-1655.  There are other companies as well, depending upon your area.  They are listed in the Yellow Pages under “Cable Television and CATV.”

Security
ADT Security — (800) 554-3322
Brinks — (800) 735-3537

Newspaper
The Denver Post — (303) 832-3232
The Rocky Mountain News — (303) 892-2525

Garbage Service
If you are outside of Denver, you may need to notify an independent company of your change in service.  In Denver, there is no need to notify anyone.

One week before closing date:

• Continue packing items that you will not need in the next week.
• Make a list of items that you will need on moving day and designate a location for these items so that they will not be accidentally packed.
• Begin cleaning out the refrigerator, making arrangements to move/dispose of perishable food.

After your closing/on moving day:

• If scheduled, confirm the arrival time for your movers. When they arrive take them on a walk-through and identify any items that will need special handling.
• Gather the list of phone numbers, file of important documents and any items that you will need and keep them with you instead of packing them.
• Supervise the mover’s placement of boxes and furniture; make sure someone is at your new home to meet the movers there.
• Make a final sweep of your old home.

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Preparing to Close

A FEW DAYS BEFORE CLOSING
A week prior to closing we can provide an estimated amount of the funds you will need to bring to closing, allowing you to plan accordingly.  The final figure is often not available until 24 hours prior to closing.

Important Documents to Bring to Closing

• A photo ID (driver’s license, passport)
• A cashier check for final funds.

AT CLOSING
Even if you are experienced at buying and selling property, the closing still may have mysteries for most home buyers.  There is a seemingly endless stack of paper to be signed, especially by the buyer, but there is no need for confusion about the procedure.  The title is transferred first, then the loan is made and placed as an encumbrance against the property.

TRANSFER OF TITLE

Warranty Deed
The sellers will execute a Warranty Deed conveying their interest in the property to you, the Buyer’s.  (Other types of deeds may be used depending upon the nature of ownership of the property.)  The deed will be recorded with the County Clerk and Recorder.

Bill of Sale
This document, executed by the seller, conveys interest to the personal property.

Other Buyer/Seller Documents
A number of other acknowledgements will be signed by you and the Seller including a tax agreement letter, water and sewer prorations, utilities acknowledgement, HUD settlement document and individual buyer and seller settlement sheets that show all debits and credits involved in the transaction.

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