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First Time Buyer

First Time Buyer

Are you considering purchasing a home and unsure where to begin? Don't worry; the journey to becoming a first-time home buyer can be a straightforward and stress-free process when you follow these basic steps.

1. Hire the Services of a REALTOR®

Not all real estate agents are created equal, and not every agent qualifies as a REALTOR®. Our WH Realty Company professionals undergo additional training, education, and certification to become licensed members of the National Association of REALTORS®. This organization adheres to a strict code of ethics and professional standards, making them the optimal choice for first-time home buyers. A REALTOR® has the expertise and experience to guide you through the home-buying process, and they can help you identify potential homes that suit your budget and preferences.

2. Get Preapproved for Your First Mortgage Loan

Before applying for pre-approval, it's recommended to meet with several lenders to compare and contrast their offerings. This involves inquiring about the types of loans they provide and identifying which ones would be most suitable for your financial situation. Different lenders offer various products, so it's essential to understand what options are available to you. Additionally, it's crucial to discuss the closing fees, as well as any additional fees like rate lock charges and loan origination fees that each lender may charge.

When you apply for preapproval, lenders will examine your financial and personal information and offer a tentative quote for financing, subject to underwriting. Your pre-approval letter will provide you with a maximum dollar amount that you can borrow, which will serve as your budget when you shop.

3. Assess Your Budget

Although your pre-approval letter may contain a maximum dollar amount you can borrow, it's essential to analyze your financial situation and determine a monthly mortgage payment that works within your lifestyle. Utilize our mortgage calculator to estimate an average mortgage payment and create a plan to save up for your down payment. The calculator can help you determine the price range you need to stay in to achieve your monthly payment goals.

Note: Applying for a home loan may impact your credit score, so it’s worthwhile to hold off on applying until you know that you’re likely to be approved.

This point in the buying process can also be an opportune time to apply for a down payment assistance program. The Colorado Housing and Finance Authority (CHFA) offers and manages down payment assistance programs and currently has two options for first-time buyers - one issued as a forgivable grant and another issued as a second mortgage.

  • The Down Payment Assistance Grant: Aimed at low-income buyers, this grant may offer up to $25,000 and does not require repayment.
  • The Second Mortgage Loan: This option provides up to $25,000 in deferred down payment assistance, issued as a second mortgage. The loan is due when you sell the home, refinance your loan, or move to another permanent residence.

4. Start Your Search!

Most homebuyers consider the shopping process to be the most enjoyable aspect of buying a home. However, it's vital to keep your ultimate goal in mind as you tour properties. Sit down with your WH Realty Company broker to communicate the features that are essential in your next home, as well as preferences where you may be more flexible. Your agent will curate a list of homes that cater to your requirements, budget, and give you a tour until you find a home that fits your criteria.

Your Wh Realty Company Agent will also help ensure you don’t miss any available homes through our tools and connections you’ll be the first to know when any of your potential dream homes hit the market.

5. Make an Offer on Your Dream Home!

Once you have found the perfect home, your agent will put together a formal offer on the Colorado Contract to Buy & Sell form, this is a formal and legally binding agreement that outlines the details of the purchase, including the purchase price, contingencies, and negotiations. If the homeowner accepts your offer by signing the contract, you are officially under contract for your new home! Alternatively, the owner may counter your offer by suggesting different terms or a price, or they may reject your offer entirely. It's crucial to avoid annoying the homeowner with an unreasonably low offer while also ensuring that you don't blindly overpay, costing you thousands. This is where the expertise of your WH Realty Company agent comes in. Your agent will work with you to compare recent market data and help you build a competitive offer that you're comfortable with and that aligns with current market conditions.

6. Under Contract- Conducting a Home Inspection

Your REALTOR® will suggest a few inspectors they trust to conduct a comprehensive inspection of the home you are purchasing. The timing of the inspection will depend on your inspection objection deadline as stipulated in the contract. We strongly advise you to attend the inspection, or at the very least, the final part of it. This way, you can raise any concerns you may have about the property and ask relevant questions. The inspection covers homes systems like; exterior, structure, roofing, electrical, HVAC, plumbing, insulation, and interior. The inspection does not cover; sewer, well/sceptic, radon, structural report, and environmental. These areas typically can be inspected on the same day for an additional fee.

The duration of the inspection process varies from inspector to inspector. Additionally, it depends on the size of the property being inspected, as it influences the number of areas that the inspector has to assess. Typically, inspections last between one to five hours.

Upon completion of the inspection, you will receive either an email or a physical detailed report. Generally, the inspector will identify each component from above as: SATISFACTORY: The component is still usable and serves its intended purpose, but it may display normal wear and tear and decline over time. MARGINAL: The component is showing signs of wear and tear and may require repair or replacement within the next five years. POOR: The component has deteriorated and needs repair or replacement immediately or soon. MAJOR CONCERN: A system or component that is significantly deficient and presents potential safety issues. SAFETY HAZARD: The component or system is unsafe and requires prompt attention. After consulting with your REALTOR®, you can establish which items you wish to request the seller to repair or fix. These items will be documented in the Inspection Objection. It's essential to note that, by default, the inspection request should primarily focus on issues that represent a health or safety hazard. Inappropriate inspection items, such as requesting the seller to paint the house blue, should be avoided. If you are uncomfortable with any defects discovered during the inspection period and are within the Inspection Termination Deadline, you may have the option to terminate the contract. Expect some back-and-forth negotiation during this time until both parties reach a conclusion that is satisfactory for all.

7. Home Appraisal

Obtaining a property appraisal is an integral aspect of the mortgage process. Financial institutions and mortgage companies determine a home’s loan eligibility based on the appraisal value of the property. When a home is utilized as collateral for a loan, the lender requires an appraisal report to ensure the value of the property guarantees the loan. An appraiser's report provides a more comprehensive analysis than a Comparative Market Analysis (CMA), which establishes the market value of a property by comparing it to other similar properties within the same location. To secure a home loan, lenders typically require an appraiser's report instead of a CMA. An appraisal report for the home, commonly referred to as the "subject property," will encompass a comprehensive assessment. The report may include an analysis of the following aspects: Conduct a comparative analysis of the subject property with three comparable properties in the area. Evaluate the real estate market in the location where the subject property is located. Estimate the timeframe required to sell the property. Provide a description of the surrounding area where the property is located.

8. Loan Monitoring and Conditions

It's essential that you are content with the terms of your loan, there are specific dates in the contract that allow you to terminate the contract or request an extension to give yourself more time to evaluate your options if you find the loan terms unsatisfactory. It's important to understand these dates and their significance, so be sure to review them thoroughly with your REALTOR®. These terms delineate the conditions under which the lender agrees to provide the loan, including the interest rate, duration of the loan agreement, and any prerequisites that the purchaser must fulfill before closing.

9. Closing Day!

Congratulations, you've reached the closing day of your new home purchase! As a helpful tip, it's recommended to take the entire day off from work, given the emotional ups and downs you may experience throughout the day. You may feel drained, yet excited, nervous, and anxious all at once, making it essential to take time to rest and recharge. Before the closing appointment, your WH Realty Company agent will schedule a pre-closing walk-through of the home to ensure it meets the agreed-upon closing conditions and that all property transferring with the sale remains in the home. Conversely, any property not included in the sale should be removed. After your final walk-through, you'll head to the title office to sign all loan and closing documents. It's worth noting that most title companies only accept wire transfers for amounts over $20,000, so ensure that your down payment wire transfer is completed before closing day. The best practice is to wire at least 24 hours before closing, and if your bank is out-of-state, it's advisable to allow extra time to avoid any delays. Don't forget to bring a government-issued ID or driver's license for all buyers! Once you've signed all the necessary documents, you've officially purchased your new home. Congratulations on this exciting milestone!

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