A Beginner’s Guide to Buying a House in Aurora, Colorado
If you’re interested in buying a house in Aurora, Colorado, but you have no idea where or how to start, you’ve come to the right place. In this guide, we’ll explain the home buying process from start to finish so you have a better understanding of what to expect going forward.
Are you thinking of buying a house in Aurora, Colorado?
If so, you have much to look forward to. Aurora is beautiful at every time of the year. It’s also ranked as one of the 20 safest big cities in America.
Best of all, its proximity to the mountains ensures you’ll enjoy the active lifestyle and healthy work-life balance Colorado is known for.
For first-timers, though, the home buying process can be a daunting one. How do you know if you’re ready to buy a home of your own? Where do you begin the process, and how long will it take?
In this post, we’ll walk you through the process of buying a house so you’ll know exactly what to expect. Read on!
Are You Ready to Buy?
Buying a house for the first time is a thrilling prospect, but how do you know if you’re ready? Here are three important factors to consider.
1. How Long Will You Live There?
If you aren’t planning to live in your home for at least five years, you’re probably better off renting. Why?
There are many extra costs associated with buying a home, which we’ll discuss more later. If you turn around and sell your home shortly after buying, you’re unlikely to make back the money you spent on closing costs and interest payments.
2. What About the Down Payment?
For a select few, such as veterans, purchasing a home for zero down may be a possibility. For the vast majority of buyers, though, you’ll need to have a significant chunk of cash on hand for the down payment.
Traditionally, this was 20% of the purchase price. In some areas, you may be able to get by with as little as 3.5% down, although 10%-20% is more realistic.
3. Consider Your Current Debt and Credit Score
How healthy is your credit score? What’s your debt-to-income ratio?
If you don’t know, now’s the time to do your homework. If your credit is poor (below 580), take steps to improve it so you can qualify for a mortgage loan.
Now take a look at your credit cards, auto loans, and other debts. Lenders will want to see that you have a debt-to-income ratio of less than 43% before you can be approved.
Buying a House: Understanding the Process
So, you’re committed to staying in your home long-term and your financial situation is in order.
Congratulations! You’re ready to begin searching for your first home. Here’s a brief rundown of what to do next.
1. Find the Right Real Estate Agent
Is it possible to buy a home without the help of a real estate agent? Yes, but there are compelling reasons to use one.
An experienced agent will be able to guide you through the complicated process of buying a home, from pre-approval to closing. Because they have intimate knowledge of the area, they’ll also be able to help you locate a home that’s perfect for you and your family’s needs.
2. Get Pre-Approved for a Mortgage
When you do find a home you’re interested in, you want the seller to take you (and your offer seriously).
The best way to do this is to get yourself pre-approved for a mortgage before you start hunting. In basic terms, this assures the seller that you have the means and ability to buy the house.
To be pre-approved, a lender will consider your income, employment status, debts, and assets. You’ll then be “pre-approved” for a mortgage loan up to a certain amount.
3. Begin Your Search
Now that you’re pre-approved and you know how much house you can afford, it’s time for the fun part–house-hunting!
Online listings for real estate in Aurora, Colorado are a great place to start. You can begin to get a feel for different neighborhoods and common home features.
If at all possible, you should arrange to visit these neighborhoods in person. Spend a few days looking at potential homes and getting to know the area–school, shops, local businesses.
That way, you’re not just looking at a set of pretty pictures online–you’re seeing the home and the neighborhood as a whole.
4. Make an Offer
When you’ve found the house that makes your heart go pitter-patter, it’s time to make an offer.
In today’s competitive real estate market, this is no time to be wishy-washy. If you fall in love with a house, it’s guaranteed that others will too.
Don’t waste time. Make an offer on a house you’re truly interested in–that same day, if possible. Your real estate agent can advise you on how much you should offer.
5. Be Prepared to Negotiate
If you low-ball your offer, chances are the seller won’t take you very seriously.
One of three things will happen when you make an offer. The seller will either reject it, accept it, or make a counter-offer. If they make a counter-offer, you have the same three options available to you.
Sound tricky? It can be. Again, this is where the right real estate agent can be your most valuable asset.
6. The Closing Process
Once you and the seller have reached a price you both agree on, you’re ready to move onto the final phase–the closing.
The process will vary by region and mortgage company. In general, expect to put “earnest money” down for a home inspection and appraisal–likely 1%-3% of the purchase price.
You’ll also need to pay associated closing costs, which include attorney and title fees and the rest of your required down payment.
Buying a Home for the First Time? I Can Help
Buying a house is a complicated process, but the good news is you don’t have to go it alone.
What you need is a reputable real estate agent who knows the local area and can work with you to find the home of your dreams.
For over 10 years, I’ve been helping families find their dream home in Aurora. I’d love to help you too.
Click here to contact me and get started on the road to first time home buying today.