Last week we talked about Fall or Fall . As we find ourselves with higher inventory in recent months would the fall season equate to falling prices in housing here in Denver. The jury is still out on the prices and inventory and only time will tell. When we hit winter we will look back and see how it plays out. But for now. Let’s address this weeks Hot topic. “Do You Have What it takes?”. This is mostly for first time home buyers, but everyone can benefit from this advice.
“Hey, I’m online now. I’m looking at the house listed at 1234 w 29th ave. Is it still available?” To which I respond, “Yes, it’s still available. No offers on the table as of yet .” The buyer then asks me “Great! Can we go take a look at it?” I said, “Sure, I’d love to set you up with an appointment. Let me call my seller and see if we can get into the home this afternoon. Would 6pm work if they can confirm?”. The buyer replies, “Yes, that will be great. Oh! Let me ask you a few questions before I let you go. Are you currently working with another broker?”
This is usually when I know it is a first time home buyer. I reply “No,” and I go on to ask “and who do you have your pre-approval with? The buyer gives me the bad news, “Oh, no we are not pre-approved yet, we have not called our bank, we are just looking saw this home, and it looks perfect but we are not ready to call our bank yet.” So, here is where we shall begin.
We are living in a fast paced world
Today’s Market moves fast! More so now than ever we as a society “want it now!”. In fact I get more views from my website on mobile devices rather than laptops. That goes for Facebook and Google analytics in addition to my website tracking. Sellers are no different. They want to sell their home. What they do NOT want to do is accept an offer from an unprepared buyer. They have spent time and money getting ready for the market. The last thing they want is to get into escrow and lose the buyer due to the buyer not having all their ducks in a row. The list price you offer is important, sure, but it’s not nearly as important as being prepared with being pre-approved (not pre-qualified).
Is there really a difference?
There is certainly a difference. Pre-approval, when done correctly, is when your lender has already obtained your financials and looked at your front and back end ratios. Per-qualifying is you simply had a 15 minute phone conversation (in most cases have not even provided documentation). It’s important you start with your lender. If you don’t have a lender you want to use, start with your Real Estate professional and ask for a referral. Different lenders have different parameters and programs depending on your situation.
Often before we become first time home buyers, the only other thing we have to compare such a huge purchase was when you bought your car. That was a much different tactic but, even car dealers have become more prepared. When you ask to test drive a car they get your license and check your credit ASAP. They want you to fall in love with the car however they can really care less if you can afford it. Get you in love with it, then they later get into financing it. However, that isn’t how buying a home works or should work.
Preparing to buy a new home?
The very first step after deciding you want to buy a home is to get that pre-approval call done and get the letter confirming your loan. With the new lender guidelines, some lenders are actually running clients through more of the approval process to save time once you do get an accepted offer. With your pre-approval, you now have a good idea of what your payment will be, how much money you’ll need for down payment, closing costs, and which home you can afford to buy.There are many more things first time home buyers can do before ever stepping foot into an open house or calling on a house you saw on the internet. However, this is the biggest mis-conception. Just because you contact a bank and go through the pre-approval process does not mean you are ready to go out and buy a home.
I have been there before!
Shoot, when I bought my last property in Denver. I went with a lender I had used in the past. This lender advised me two weeks into escrow that they were back-logged with appraisers. It would be impossible to get my home appraised before I was scheduled to close. The seller had other interested buyers and had already set themselves up to move out because they did not want to extend the contract. I had to switch to another lender and, thought it was tight, but we got it done on time. I do recommend though, if you are not sure who to use for a lender ask a few questions of your own before you decide on them to start the pre-approval process. Things like;
Lenders may come out to look at the home, but then take another 3-5 days to submit the findings. Ask about fees and rates but always keep in mind that these rates are tied to the market and can change multiple times a day. Use these rates and fees as a reference but at this stage, don’t get too hung up on these numbers. The day of the month you close, when taxes are due, the insurance policy you choose will all will change your payment and closing costs along with many other minor variables. I had property insurance quotes from 1,600 to 740.00 annually on the same property all with the same deductible. So, it’s smart to shop around.
Let me help you find a new home in Denver, Colorado
First time home buyers who want an in-depth look at what to plan for before making an offer give me a call at 720-688-5110. Go to the link below and scroll down to the Affordability Calculator on my website and it will give you a full report. For sellers looking for an evaluation of their home please fill out this form on my website.
Want to live in a specific Denver Neighborhood? Click here: http://www.denverhomesmarket.com
Next weeks Hot Topic “I’m thinking about selling my home, now what?”