Welcome to Andy Hawbaker’s Home Buyer’s Guide.
I love working with buyers to find their new home. I’ve worked with many First-Time Home Buyer’s as well as those who’ve been through the process many times. It can be intimidating. There are a lot of moving parts and this is likely the largest purchase/investment you will make in your entire life. With all of that in mind, I created this Home Buyer’s Guide.
This is meant to be helpful in guiding you through the home buying process but, remember you are never alone when you engage a truly professional and experienced Realtor. Enjoy the guide but call or text me if you have any questions.
Andy Hawbaker is the Northern Colorado Real Estate Agent of Choice for a few simple reasons; He is knowledgeable about the market, he is detailed in contracts and negotiations but most of all, he truly cares about his clients plus he’s super fun to be around.
Andy works with many 1st-Time Homebuyers, people relocating to Northern Colorado, Move-Up Buyers and those who are downsizing. He has experience with New Construction, Luxury Homes and Condo & Townhomes.
You’ll see on the reviews page that most people comment on Andy’s accessibility, reaction time and of course the fact that he’s fun and really has your back.
What We Need To Get Started
Your agent! Your agent is your #1 resource when house shopping. Bring them on tours so they can help you navigate this step of the home-hunting process.
Pen and paper. You’ll want to take notes during your tour so you can reference them later, especially if you have plans to see multiple properties.
Measuring tape and measurements. You need to know exactly how much space you have to work with in any new home you may choose. A dream home will quickly become a nightmare if things
don’t fit inside it!
NOT UNDERSTANDING THE FULL COST OF OWNERSHIP
As a first-time home buyer, you’re probably accustomed to the monthly cost of renting, which usually includes your rent payment, some of the utilities, and your internet and cable bills. As a homeowner, you’ll be responsible for additional monthly costs that may have been covered by your landlord. That includes things like water, sewer and garbage bills, monthly HOAs (if you’re buying a condo) and the cost of lawn care. You’ll also be responsible for paying property taxes and homeowners insurance. And don’t forget the cost of maintenance. It’s recommended that you set aside 1-3 percent of the purchase price of the home annually to cover repairs and maintenance.
Getting Too Emotional
Think it’s impossible? It’s actually not. Once you decide to buy a home, start thinking of yourself as a businessperson and investor rather than just a future homeowner. In fact, forget that you’re the “Buyer” altogether. By looking at the transaction from a purely financial perspective, you’ll distance yourself from the emotional aspects of buying the property. While it is important to factor in certain emotional aspects, don’t let it cloudy the process. Real estate IS an investment. Don’t let emotions distract you from that.
Shopping Before Getting Pre-Approved
It’s more fun to look at homes than it is to talk about your finances with a lender. So that’s what a lot of first-time home buyers do: They visit properties before finding out how much they are able to borrow. Then, they are disappointed when they discover they were looking in the wrong price range (either too high or too low) or when they find the right home, but aren’t able to make a serious offer. How to avoid this mistake: Talk to a mortgage professional about getting pre-qualified or even preapproved for a home loan before you start to seriously shop for a place. The pre-qualification or preapproval process involves a review of your income and expenses, and it can make your bid more competitive because you’ll be able to show sellers that you can back up your offer.
Emptying Your Savings
If you buy a previously owned home, it almost inevitably will need an unexpected repair not long after. Maybe you’ll need to replace a water heater or pay a homeowner’s insurance deductible after bad weather. How to avoid this mistake: Save enough money to make a down payment, pay for closing costs and moving expenses, and take care of repairs that may come up. Lenders will give you estimates of closing costs, and you can call around to get estimates of moving expenses.
Choosing the Wrong Lender
Shopping for a mortgage is like shopping for a car or any other expensive item: It pays to compare offers. Mortgage interest rates vary from lender to lender, and so do fees such as closing costs and discount points. But according to the Consumer Financial Protection Bureau, almost half of borrowers don’t shop for a loan. How to avoid this mistake: Apply with multiple mortgage lenders. A typical borrower could save $430 in interest just in the first year by comparing five lenders. All mortgage applications made within a 45-day window will count as just one credit inquiry.
Make An Offer
Now for the exciting part! When you are ready to write an offer, I will walk you through the contract. It is important to write a fair offer or you can run the risk of the seller not responding or even losing the property to another buyer making an offer. Here are the steps:
• Write the Offer
• Negotiate the Offer
• Satisfy Conditions
How to Make a Great Offer
- Submit a Pre-approval Letter with your Offer
- Write a Friendly Offer
- Put your Best Foot Forward
- Put Down a Healthy Earnest Money Deposit
- Shorten Inspection Periods
- Write the Seller a Letter
- Offer to Close Quickly
Many times after the initial offer is presented the owner will come back with a counter-offer.
As a buyer, don’t be afraid to bargain for what you want. Whether that be cost, a new roof or the whole house painted. You don’t know what they’re willing to do unless you ask.
Tips for Negotiating
- Try to Have More Data Than the Other Side
- Learn the Power of No
- Use Price Anchoring to Find Someone’s Lowest Price
- Learn What the Other Party Needs From the Deal
- Keep Your Cards Close, but Try to Stay Nonchalant
Also, be aware of the market. In a hot sellers market you may be up against other offers and therefore won’t have as much power. If you know what is happening in the market you can use that to put more value into your offer.
A home inspection is a visual assessment of a house’s physical structure and mechanical systems, including the roof, ceilings, walls, floors, windows and doors.The inspector will check that major appliances are functional, scrutinize the heating and air-conditioning system, examine the plumbing and electrical systems and may even poke around in the attic and basement.The goal of a home inspection is to uncover issues with the home itself. Inspectors won’t tell you if you’re getting a good deal on the home or offer an opinion on the sale price.
The home inspection happens after the seller has accepted your offer but before the purchase is complete. To provide enough time for additional inspections or for negotiations with the seller, you’ll want to schedule a home inspection as soon as possible once you’re under contract. You should allow at least seven to 10 days in the homebuying process to take care of the inspection.
As the buyer, it’s on you to hire the home inspector. Even if the seller offers to share their home inspection report or claims the house is pre-inspected, you’ll want to arrange your own inspection so you can vet the inspector yourself. Home inspectors aren’t federally regulated, and they’re not even licensed in Colorado. Don’t worry, I have some great inspectors to recommend.
A home appraisal is a licensed or certified appraiser’s opinion of a home’s value. The appraisal is based on research of recent sales of comparable homes in the area, an analysis of the property and the appraiser’s judgment.The mortgage lender requires an appraisal to help gauge risk of making a loan. The property serves as collateral in case the borrower defaults, so the lender wants to make sure the loan isn’t too big, compared with the property’s value.
An appraisal is an assessment of home value. The appraiser considers the home’s condition as part of the analysis of how much the property is worth, as well as other factors, such as the local housing market. The appraiser doesn’t make recommendations for repairs.
Real Estate Closing
The closing process finalizes the purchase of your home and makes everything official. Also known as settlement, the real estate closing is when you receive the deed to your home and everything is recorded with the county to keep the ownership record clean and clear.
Prior to closing, you should change all utilities into your name, and complete a final walk through to check for any outstanding items. Generally, we will walk through the home the morning before closing. We’ll be checking to make sure that there isn’t any damage and that the home is in the same condition as the original showing. It’s also a great time to make sure the seller has removed all of their possessions.
What You Should Bring to Closing
- A valid government issued photo ID
- Cashier’s check or wire for the total amount due
- Outstanding documents for the title company or mortgage loan officer
What to Expect at Closing
The escrow officer will look over the purchase contract to: identify what payments are owed and by whom; prepare documents for the closing; conduct the closing; make sure taxes, title searches, real estate commissions and other closing costs are paid; ensure that the buyer’s title is recorded; and ensure the seller receives any money due.
Your Closing Costs
- Escrow fees
- Recording and notary fees, if applicable
- Title search and title insurance
- Origination, application and underwriting fees from lender
- Appraisal fees
- Local transfer taxes
- Homeowners Insurance
- Home Owners Association fees, if applicable
Make sure to keep copies of all closing documents for tax purposes. But don’t worry, Kris Lindahl Real Estate will keep all documents for 7 years in case you need anything.