As we enter the third year of the pandemic, home buyers are experiencing unique conditions within the real estate market. Some are buying homes for the first time, which can be especially tricky since their first home buying experience will occur during a seller’s market.
Buying your first home is difficult enough. Unfortunately, as of 2021, there is a notable inventory shortage and the competition for homes is fierce. While the current climate may exacerbate the anxiety of buying a house for the first time, it is important to know that you have options. As a first-time homebuyer, you will also have access to programs designed specifically to assist you in navigating the home buying progress.
Buying a home for sale in Denver?
Even before the pandemic, Denver-area houses were some of the most desirable in the nation. The city sports an awe-inspiring mountainous area that hosts an array of wildlife and enriching outdoor culture. Many people visit Denver in the hopes of experiencing this exciting yet natural lifestyle. The urban/outdoor fusion makes the area desirable for all kinds of potential homebuyers.
After the pandemic, Denver ranked among the top 10 most moved-to cities in the United States. Denver was also ranked among the top places to live in the United States by U.S. News and World Report.
Denver’s previously mentioned qualities became more apparent to people who have lived in the larger, more population-dense metropolitan cities. As of 2020, Denver’s overall population rose to 715,522, showing a total growth of 19.2% over the last decade.
While buying your first home in such a coveted area may be daunting, understanding your options as a first-time buyer and working with an experienced agent will help you achieve your buying goals.
Here are some valuable tips to consider when buying a home for the first time in Denver.
1. Consider your financial options
As a first-time buyer, you have access to plenty of programs that the government backs to help you land your deposit. For instance, the Federal Housing Administration will allow you to take out a loan with many benefits. These include a lower down payment and qualification for loans for those who have lower credit scores. Keep in mind that these types of loans often come with an added fee for private mortgage insurance.
There are plenty of state programs to help you with your down payment and closing costs as well. Talk with your agent about which programs will be most beneficial for your unique situation.
2. Take a tour of the area
Before you consider buying property in the area, take the time to explore each neighborhood you are interested in. Spend some time in each at different times of the day and on different days of the week and observe traffic conditions, the friendliness of the residents, and how easy it is to access nearby amenities.
If you haven’t yet narrowed down which neighborhoods you’re most interested in, ask your real estate agent for advice. Tell him or her about your lifestyle needs, budget, and neighborhood amenities that are most important to you. Your agent will be able to suggest several neighborhoods that fit the bill so you can start your search.
3. Observe the market
As a first-time buyer, you need to understand the nature of the real estate market you wish to enter. Observe the state of the Denver real estate market and consider when the best time to buy may be and when might be the best time to wait.
Use online resources to study trends, read articles on the latest real estate news and talk with your agent about the best time to begin the buying process. Being informed will give you an edge over your buying competitors.
However, it’s also important to understand that the right time to buy should not be totally based on the market. It’s quite possible to achieve your buying goals in a seller’s market if this is the right time for you to become a homeowner.
4. Start saving as early as you can
Even though many first-time buyers will qualify for assistance, it’s still important to start saving as early as possible. If you are able to put 20% down on your first home, you can avoid costly private mortgage insurance and increase your buying power. You will also need to pay closing costs (again, you may be able to get assistance with this, but it will come with added fees), moving, and furnishing your new home.
5. Get pre-approved for a loan
In the current competitive real estate market, many sellers will not even consider an offer from a prospective buyer who is not pre-approved for a loan. Before you start looking at homes for sale, visit a mortgage lender to get pre-approved for a loan. The lender will look at your credit score, credit history, proof of salary and assets, and debt-to-income ratio. A score of 620 or higher is needed for a conventional loan, but first-time buyers with lower scores may qualify for FHA loans. The lender will then pre-approve you for a certain amount and you will be issued a letter that you can take with you when you start looking at homes.
Are you ready to start the exciting process of buying your first home? Working with an experienced Denver real estate agent is the best piece of advice any first-time homebuyer can take. Whether you’re searching Cherry Creek, Washington Park, or any of Denver’s beloved neighborhoods, he will be happy to help. To take the next step, reach out to trusted local agent Eddie Johnson for guidance.
