Buy a Northern Colorado Home

The list price is what you as the seller want to sell your home for (sometimes fair market value and sometimes not) and the sales price is the final price that you and the buyer determine fair market value and agree to sell your home for. Someone could list a property for $1million but that may not be the actual sales price or fair market value of the home.

In Colorado, the seller typically pays for a real estate brokers’ commissions, but it is always negotiable and there are times when a buyer may pay a portion or all of a real estate broker’s commission. It’s wise to ask your broker before you sign the listing agreement, what your specific situation might be as it relates to paying their fee.

A home warranty is a renewable yearly service contract that protects a home’s systems and appliances from unexpected repair or replacement costs due to a break down. Homeowners insurance does not typically cover mechanical failures, so a home warranty can help bridge the gap. The buyer, seller or real estate agent can purchase the home warranty for the buyer.

An appraisal gap is the difference between the appraised value of a home and the purchase price in the sales contract. An “appraisal gap clause” is used in a sales contract to guarantee that the home buyer will cover the monetary gap (bringing cash to closing) between the appraisal and the sales contract if an appraisal gap becomes an issue.

A buyer’s agent works solely on behalf of the buyer to promote the interests of the buyer with the utmost good faith, loyalty and fidelity. The agent negotiates on behalf of and acts asan advocate for the buyer.

‍A seller’s agent (or listing agent) works solely on behalf of the seller to promote the interests of the seller with the utmost good faith, loyalty and fidelity. The agent negotiates on behalf of and acts as an advocate for the seller.

‍A Transaction Broker or TB assists the buyer or seller or both throughout a real estate transaction by performing terms of any written or oral agreement, fully informing the parties, presenting all offers and assisting the parties with any contracts, including the closing of the transaction without being an agent or advocate for any of the parties.

‍A customer is a party to a real estate transaction with whom the broker has no brokerage relationship.

Real estate agents have a list of reputable lenders they have worked with in the past who not only have a variety of loan programs, but who are also honest and knowledgeable. Typically, your real estate agent can provide some recommendations. You can call the individual lenders and compare their programs and services.

It depends. Some loan programs feature a down payment of as little as $1000 and others may require 3%-20% down. If you put down less than 20%, you will likely incur an additional monthly fee in the form of mortgage insurance. Your lender will be able to visit with you about the best loans that fit your needs depending on which Colorado area you are purchasing in, your credit score, and the amount of money you have for a down payment.

It’s always good to know the facts. Talking to a lender and having them pull your credit report to see how your issues have affected your specific credit score and report is a good idea. Your lender can provide you with a plan for correcting issues and let you know what it will take to get it cleaned up enough to purchase a home.

A short sale is the sale of a property where the owner is currently upside down (they owe more on the home than the property is worth in the current market). A “short” occurs when the seller asks the bank/mortgage company to accept less in the amount they are owed in order to sell the property. Sellers must qualify for a short sale and receive approval from the bank to complete this process. A foreclosure is when the bank has taken over full ownership of the property by seizing it.

Absolutely! In Colorado we are lucky to have a portion of the standard real estate contract dedicated to performing a home inspection on the property. If your agent is using a standard contract, you will have a deadline to meet, in which the inspection must be completed, and any objections must be agreed upon. Even with other types of contracts like HUD homes or bank-owned properties, you are allowed an inspection period, although the seller may not agree to fix any items you find wrong with the home.

This is where a real estate agent is very valuable. They can request information about the property from the seller including disclosures and forms that may be helpful in deciding about a purchase. They also have access to the marketing information on the property which includes room measurements, features of the house, and other special items that may interest you. Additionally, if you have specific questions about a property, make sure to ask your real estate agent at the showing. They can research the information and get back to you prior to writing an offer.

Buying a home is a big decision. There are certainly advantages and there are things to weigh before you make the big step and sign on the bottom line. Buying a home means you can paint the walls the color you would like and get a dog without obtaining permission. It means you can plant a garden in your backyard if you want to. And there are financial benefits to owning a home—both tax benefits and the possibility that your home will appreciate in the future and provide a nest egg. There are some drawbacks to owning a home—if you do not have an emergency fund to take care of a broken furnace, if you don’t like mowing the lawn, or if you don’t particularly enjoy home maintenance, those items could influence your decision to purchase.

There are positives to both! New construction is a home that has never been lived in…you get to pick the plan and sometimes the colors. The process of building your own home can be an exciting one. The drawbacks to new construction can also be the time frame it takes to build a home (3-6+ months). Additionally, some new construction homes may not include landscaping, fences, or window coverings, appliances, A/C, etc. These can be additional expenses for a buyer. Resale has benefits, as well.  Typically resale homes come more complete with items that may cost extra with a new home.

We always recommend hiring a professional home inspector. While it is not “mandatory” in the contract, a professional inspector is a person whose entire focus is to look through the property and discover potential problems on your behalf. Sometimes a professional inspector may need additional experts to come and provide expert opinion about a furnace or a roof. Your real estate agent can recommend professional, reputable home inspectors.

Negotiating a contract is a bit on an art. Some people think submitting a “low-ball offer” is the best way to see what a seller will take. Unfortunately, this tactic can often offend the seller in a way that they won’t even provide a counterproposal to your low-ball offer. We will help you decide what a good offer might be, one which involves many considerations including what’s happening in the current market, how long the home has been listed for, the current prices of other homes in the neighborhood, its condition and what you will feel comfortable with. Ultimately, it’s always your decision about what kind of offer to make to the seller. Typically, low-ball offers don’t achieve the desired result of buying a home.

The listing price is not always the price to offer. Sometimes the price a home sells for is higher and sometimes it is lower. We can help provide you with information and research on a property for you to decide what you want to offer. It is always your decision—but use us as a resource to get all of the information you need to make an educated decision in the current market.

Having a broker acting on your behalf is the first negotiating tip. They are not emotionally involved in the deal and can often better negotiate in your favor because of this. Your broker can help you in each scenario to negotiate the best deal on your home…each situation is different and there may be different tactics and strategies to employ in different circumstances. Do not hesitate to ask your agent what they would recommend in your personal situation.

Yes, depending on the type of loan you receive, a seller may help you pay for your closing costs if you negotiate that as part of your contract. Typically, the maximum is 6% although most people don’t usually need 6% in closing costs for their loan. And, all loan programs and lenders are different. Talk to your lender to see what your loan program would allow.

Everything in the contract is negotiable. Typically, sellers leave built-in fixtures and appliances. Furniture is usually considered a personal property item and negotiated outside of the contract unless it is built into the property.

Yes. In the State of Colorado, a seller is required to tell a buyer about any problems they have had with the property. One of the best ways for a seller to disclose this information is through the Seller’s Property Disclosure. In addition to a seller disclosing, if their real estate agent, or the buyer’s real estate agent, knows about problems  to the physical condition of the home (material fact), they are also required to disclose this information to a new buyer.

The best time to buy a home is when you have weighed the options and have made an educated decision about all of the factors that go into purchasing a home. For example, do you have enough down payment saved, can you qualify for a home loan, how long do you plan on staying in the property or the area, and do you have some savings to take care of home maintenance issues that may come up with a property? Buying a home has to be right for you. Talk to your broker about the pluses and minuses that might go into purchasing a home right now to see if it makes sense for you.

Not necessarily. If a seller agrees to complete repairs on the home during the inspection process with a buyer, they would be held (contractually) to complete any repairs they agreed to. However, some sellers wish to sell their homes in an “as is” condition and reflect their desire to do so in a lower price. And, some houses like HUD homes and bank-owned properties indicate up front to buyers that the seller is unwilling to do repairs prior to closing. All of this being said, it doesn’t mean that you can’t request that a seller complete repairs on the home before you purchase…they just might not agree to do so as part of the contract.

Typically, items that break or go out of working order after you purchase it are your responsibility as the new owner of the home. There are some extenuating circumstances to this that may have the seller be responsible for something not working, but typically the new buyer will have to fix the problem.

Qualification is based on the stability of income in the same line of work or related field for approximately two years.  Commission, bonus and self-employment income must be verifiable for two years and averaged for qualifying.

No. Qualification is based on the acceptable percentage of income that is available for payment of monthly debts including housing debt.  Talk with your lender before you assume that you must pay off debt.