by Kimberly Rotter | Published on July 24, 2021
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Buying a home in Denver? Be ready to compete and remember to breathe.
The home-buying process can be a brutal experience for individuals and families. Getting a mortgage seems to be the easy part. Submitting the winning offer? Not exactly a walk in the park. Buying a home today is more than checking out the listings that look good and making an offer on the one you like the best. The new normal looks like this:
We wanted to know what it was like to buy a home in Denver, so we spoke to Stuart Sims and Caitlyn Van Heest, a couple who just did it. Stuart is a business intelligence analyst for The Motley Fool, and Caitlyn is a data scientist for Zillow.
Here's their experience.
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Because of a past experience that was memorable for the wrong reasons, Stuart and Caitlyn went to great lengths to find a lender who would give them the best loan and the best service.
They researched lenders' reviews, interest rates, and time to close. "With a larger lender, we didn't know who would handle our loan or how responsive they'd be," says Caitlyn. They went through mortgage prequalification with five different lenders and decided to go with Elevations Credit Union. They got their loan pre-approval before they started viewing homes.
Based on their excellent credit, they secured a mortgage interest rate of 2.875%. They said their mortgage had low fees and no "gotchas." Also, Stuart and Caitlyn appreciated that Elevations maintained direct contact with the seller's agent. That gave the couple greater confidence in their ability to offer a quick close.
Stuart and Caitlyn knew how much they could spend on a home, but they also set a lower limit.
"We tried shopping for homes priced $50,000 under our budget so that we could make an even stronger offer, but the quality of homes at that price point was too low," says Caitlyn.
They set a time limit, too. The couple started looking for a home on May 1 and decided that they would sign a new one-year lease on their rental home if they didn't buy a home by Aug. 1. This boundary helped them preserve their sanity. If the home didn't come to them during this time period, they would consider it a message from the universe that it just wasn't the right time or place to buy.
"We wanted a 2-car garage," says Stuart. But they ended up with a home that has a great yard, a one-car garage, and a shed that they can someday convert to a garage if they choose. They feel like they got plenty of positive tradeoffs for the two-car garage. The home is close to the city and walkable, with easy access to stores, banks, and other services.
Stuart and Caitlyn made their offers as attractive as possible with:
"We weren't willing to make an offer with no contingencies," says Stuart. They didn't want a home that needed major repairs. But they did set a healthy boundary on inspection issues. They told the sellers that they would refrain from objecting to any single inspection issue estimated to cost less than $2,500 to fix, or any combination of issues totaling less than $10,000.
"We're handy, but if the foundation is crumbling, forget it," Stuart says.
With the support of their lender, Stuart and Caitlyn were able to offer to close within 30 days.
The post occupancy agreement may have been the perk that sealed the deal. This is a clause that says the seller can rent the home back from the new owner for a period of time after closing. They closed on June 18 but won't move in until Aug. 1. In the meantime, Stuart and Caitlyn are visiting family and friends.
Like many hopeful buyers, Stuart and Caitlyn experienced many disappointments. Caitlyn even considered the possibility that buying a home was not in the cards. But they stayed focused and stayed in the game.
"We looked at 30 to 40 homes," says Caitlyn. "Six or eight each weekend and one or two during the week."
She says it was an emotional roller coaster. They only got about 15 minutes to see each home, and by the end of that time, "a realtor was almost always at the door, waiting for you to get out."
They were selective, only making four written offers and one verbal offer.
Competition was intense. "No one was accepting rolling offers," says Stuart. What that means is that you have to make each offer as if you are ready to buy the home (not contingent on the outcome of another offer that you've made). You have to include earnest money. If you submit multiple offers, you risk forfeiting your earnest money if an offer is accepted but you back out. So Stuart and Caitlyn reviewed all the homes they saw each weekend and made a single offer just about every Monday until one was accepted.
It's definitely possible to be successful in a home-buying adventure, especially while mortgage rates are still very low. If this couple is our example, the key is to prepare, educate yourself thoroughly, and go in with a strong strategy but no expectations.
Chances are, interest rates won't stay put at multi-decade lows for much longer. That's why taking action today is crucial, whether you're wanting to refinance and cut your mortgage payment or you're ready to pull the trigger on a new home purchase.
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