First Time Homebuying

Our favorite youngest daughter is getting ready to decide whether or not to buy her first home. She has made a list of Owning  vs Renting, recognizing that owning is an opportunity, but also comes with its own list of responsibilities.

As we discuss the pros and cons of owning, we have put together our Top Ten list of considerations for moving forward with a purchase. Getting your “ducks” in order is a priority.

1. Interview local REALTORS®. Find one who can give you recent market statistics, buying scenarios, financial direction and has experience negotiating in today’s marketplace in Northern Colorado. Not all markets in Colorado are the same so make sure your REALTOR® understands differences between Fort Collins, Loveland, Wellington, Windsor and all surrounding towns.

2. Gather credit information for your lender. You will need to provide recent 401 k statements, recent bank statements, recent pay stubs.

3. Preapproval from a lender is THE most important duck, not prequalification. The lender will tell you what you can afford and what your monthly payments will be. This step requires a preliminary review of your credit information. Do not increase your credit card debt, buy a new car, or apply for a new credit card. Make sure you have a copy of your last two most recent tax returns.

4. Avoid making large cash deposits to your bank account.

5. Do not make a major career change.

6. What do you have for a down payment and what are your options? Will you be gifted money, co-signing, or do you have cash saved for approximately 20% down.

7. Do research on the area/s that you want to buy. Walk the neighborhoods at different times of the day and on the weekends to observe activity and age groups. Check walkability scores, crime rates, number of rentals.

8. When negotiating your contract, realize there will be additional funds needed beyond your down payment. Inspections, appraisals, HOA transfer fees and warranties are not necessarily provided by the seller. After closing, expect the unexpected. Inspections are not foolproof and Murphy’s Law is ever present.

9. When closing on your purchase, NEVER WIRE FUNDS TO ANYONE BUT THE CLOSING AGENT. Scams are rampant. And beware of unexpected emails that ask for money to cover additional inspection costs. All of these costs should flow through your agent.

10. Before, during and after your closing, your REALTOR® should be your trusted advisor for any questions that you may have. From finding handymen to paying taxes, call your REALTOR®.

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