Buyer's Guide

The bottom line: Don’t buy a house you can’t afford. However, “affordable” is a nebulous term that can mean something different for each individual. Buying a home is likely to be one of the most significant purchases you will make in your lifetime. 

To begin the process, you’ll need to define your budget and get a mortgage pre-approval to shop with confidence. Most sellers will not even look at your offer without a pre-approval letter from a qualified lender.

Critical things to keep in mind when figuring out your homebuying budget:

• Just because you can afford the mortgage payment doesn’t mean the property is within your budget. 
• Calculate your debt-to-income ratio.
• Consider monthly expenses and gross income.
• Keep other homeownership costs, such as homeowner’s insurance, repair expenses, and property taxes, in mind.
• Ideally, you should be able to afford to put at least a 20% down payment on your home.

There is a seemingly unlimited pool of qualified agents and brokers to choose from when you’re buying a house. Some people even try to buy a house without a real estate professional to assist them, although it isn’t recommended. 

If you don’t have an agent, you won’t have anyone looking out for your best interests in the market. Buyer’s agents have advanced experience in the industry and can provide you with access to intel (such as special loans and off-market listings) you won’t get anywhere else.

Ultimately, you want to pick an agent that provides local insights and who can get the job done while keeping your stress levels low. Michael has more than 35 years of experience living in Boulder and knows the many diverse neighborhoods inside and out.

Before you start looking for a home, target the type of house you want and the area you want to live in. There are a variety of communities in the Boulder area that appeal to different people based on their lifestyles. You might want to purchase property conveniently located closer to Denver, or you might prefer a neighborhood submerged in nature with great hiking trails nearby. 

Here are some things to think about when you’re narrowing down the house and neighborhood:

• Local schools
• Best amenities
• Nearby entertainment options
• Commute time to work
• Number of bedrooms/bathrooms
• Yard size
• Type of floor plan

In a crowded housing market, bidding wars have become common. Even if there isn’t a bidding war, crafting an offer should still be handled with care. That’s part of why having an experienced realtor on your side is such an advantageous part of the buying process. Your realtor will do the heavy-lifting when it comes to making an offer and structuring it, so you are more likely to win your bid.

This step also proves why having a pre-approval letter ahead of time is essential, as being backed by a lender makes you look more appealing to sellers. 

Other critical components to remember:

• Study local market trends and comparable sales
• Leave some wiggle room in your offer
• Don’t max out your budget
• Don’t lowball your offer
• Never waive the home inspection contingency
• Don’t rely on the seller’s agent––they are looking out for the seller’s best interests and not yours
• Try to keep your emotions in check

Closing is the final stage in buying a home and also the most critical. You’re close to the finish line, but there are a few more crucial things that have to be taken care of before you become a homeowner. To begin, you’ll open an escrow account to act as a neutral third party between you and the seller. Then there will come the negotiation of closing costs, title search, and title insurance. 

From there, it will be time for final inspections and walkthroughs, including the physical home inspection and the pest inspection. Depending on what the inspectors find (repairs, damage, etc.), you might be able to renegotiate the offer. Next, you’ll lock in your interest rate and then finalize the paperwork. Once all is said and done, congrats! You are now a proud new homeowner.