The Colorado Home Buying Process – Dallice’s Story
I bought my existing house in 2007 after having rented it for 2 years already. Here I have sat for almost 11 years. Riding the up’s and down’s of a bubbly market, economic downturn, buyer’s market and seller’s markets. Through thick and thin I have helped people buy and sell homes, from my home, for a long time.
In the back of my mind and near the top of my goals list, was the idea to purchase more real estate. Sure, I have a retirement account and despite the current stock market issues, I know it will eventually help pay for my “golden years” in Boulder. But that’s not what floats my boat and I sure don’t understand the intricacies of the stock market – I have a person for that! (Happy to share my amazing financial adviser and accountant team with you… Just ask.)
I’m a Realtor. For fun I troll the MLS and look for what is new, what has been sitting a while, seeking out that which would make a great rental property and that which is attractive enough to make it my next potential home. This is the story of my next house. I’m going to be completely honest with you about the process and exactly what I was feeling along the way. Real estate transactions are financial decisions, but they are emotional in many ways, not just analytical. Being prepared for that and/or having a support team and plan in place to deal with the analytical and the emotional sides is important and not to be underestimated.
I will blog my experience in several posts:
- Location, negotiation and contract on new house
- Loan Application -> Approval
- Packing -> Moving -> Unpacking
- Renting the existing house
Colorado Home Buying Process: Finding the right place
Listing alerts. Yes, I set them up for myself, just like I do for all my buyers and sellers. My criteria, based on the amount I wanted to put down and my comfortable monthly payment, was for a 3-4 bedroom house under $400,000. It had to be walkable to schools and dining and other amenities, close to bike or walking trails and easy access to commuter routes. I wanted something that didn’t require a whole lot more cash after closing to make it liveable and it had to be both something that I would live in and something that could rent to well qualified tenants fitting the “long term renters” profile.
I was open to many of the communities that surround Boulder but understood that Boulder was not feasible in this price range. Longmont became the area of first choice for a couple of reasons. Firstly because I believe it is good investment, long term. The community is strong, old town has undergone a revival (Butterball turkey processing plant being gone is a big deal for me!) the City is installing fiber for high speed internet at a killer price and it’s convenient to Boulder and easy access I25 to get from Fort Collins to Denver fairly quickly. Oh yeah and Longmont is seeing mad appreciation and growing popularity right now.
On a personal note, I have many friends in Longmont, do a lot of business in Longmont, date a guy who lives in Longmont and as a private pilot, use the Longmont airport frequently. That means I can live there almost as happily as I can live in my beloved Boulder. I have some trepidation at moving further from the hiking trails that I love in Boulder though.
Over the next couple of months, I went and saw a few houses. Actually most of those I saw were for “getting to know the market” either for myself or my clients. There were only 3 that I booked showings for with the intent of determining whether or not to make and offer.
In December 2015, after watching a nice looking house for about 3 weeks, I decided to make an offer. You might be saying “3 weeks? Isn’t that a long time to be listed in this market? What is wrong with it?” But remember that those weeks fell between Thanksgiving and Christmas. Traditionally the slowest period of the year for showings and going under contract. With reduced daylight hours, unpredictable weather and seasonal distractions at play, it is my opinion that only a motivated seller would list their home at this time. To me, understanding what house is valued at means it doesn’t matter if the DOM are longer or the price is a bit high… I’m going to use my negotiation skills to try and acquire a place at the right price anyway and the higher price is keeping my competition away. Bonus!
This particular house was vacant. I offered lower than asking and asked the seller to pay for closing costs. Why? It essentially rolls my $4000 of closing costs into the mortgage and keeps more cash in my bank account. That cash will be used to complete a couple of projects around the house after closing or can be kept as “emergency money”. I really, really don’t recommend this tactic in a competitive situation if you have the cash to pay your own closing costs, FYI. But in this case I felt secure that I was not competing with anyone else in mid December after 3 weeks on market and I was right.
The seller and I agreed on a price and went under contract December 14th. Closing was 6 weeks away at the end of February. This is a long closing, but remember that Christmas and New Year and another long weekend fell during this time. It’s fair to anticipate lenders, appraisers, home inspectors, title companies etc will all have reduced hours over the holiday period and the Colorado home buying process will simply take longer. It matters to me that my lender is not stressed out over Christmas. (Of course I will introduce you to the lender I chose to use for my deal, just ask.)
The address: 1333 S Terry St, Longmont
This 4 bedroom, 2.5 bath, 2 story house with large back yard and 2 car garage has been WELL maintained. I really like that the seller has taken care of the bones of the house… Appliances, HVAC, roof, exterior paint etc are all relatively new. It was a nice combination of the things that were important to my boyfriend and the things that I needed to make it work. Did I mention that this house was to be the first house I would share with my BF of many years? Like I said earlier… All real estate purchases come with emotional complexities. If they are not yours, buyer, then expect the seller to be carrying some baggage. That is life. Life is complicated by being human and cannot be calculated and analyzed by a spreadsheet alone. Don’t let anyone tell you otherwise!
My excitement and anticipation was (is) occasionally dotted with anxiety about changing up a great relationship I have with my BF or compromising relationships I have with my current neighbors (when I rent out my current house). I have all the home buying concerns that buyers normally think about too. You know the ones; “What if I’m making a mistake?” “Did I leave money on the table?” “What don’t I know about this house?” “Can I book the movers now?” “So many things to think about…where do I start?” “I don’t want to take time off work and/or lose clients because I’m moving” “Will my cat be OK with a move?”
Honestly, being a Realtor alleviates the concerns about price and knowing the process, but does nothing to stop the other little voices from running circles in your head, distracting you and lending weight to doubts and insecurities. Realtors have anxiety too!
In a nutshell, this is what the Colorado Home Buying Process looks like when it’s not being a 16 page contract to buy.
So my next real step was applying for the loan, since 80% of the cost of the house would involve a mortgage. The loan process will be the next blog post. You’ll find parts of it funny because it’s not you… yet!