Steven Beam RE/MAX Alliance (303-941-HOME)
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First time homebuyers in Denver, Colorado…What to expect.
Steven Beam is a licensed Colorado real estate broker. Steven helps clients buy and sell real estate and homes for sale in Douglas County, Colorado. Some of the cities served are Parker, Greenwood Village, Englewood, Centennial, Aurora, Littleton, Elizabeth, Franktown and Castle Rock, Colorado.
As a potential buyer of residential real estate in Colorado here are a few of the steps involved in a successful real estate transaction.
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1. Pre-Approval- You must obtain loan approval from a lender of your choice. It’s best to use a local Colorado lender. Out of state lenders don’t know our customs and protocol for closing real estate. I can help you as much or as little as you would like with this process.
I have a great lender here in Denver, Colorado that would love to earn your business. He has worked with hundreds of clients buying real estate in and around Denver, Colorado. Greg Godbey will certainly take the time to make sure you completely understand the loan process and what loan is best for you. Please understand the loan your neighbors, buddy at work or friends used may in fact not be a good choice for you. You need to know what loan is best for you and your particular situation.
Greg Godbey – Aspen Funding Corp
445 Union Blvd. #307
Lakewood, CO 80228
Direct: 303-854-2374
Fax: 303-989-4868
Email Greg Godbey
2. Earnest Money- You will need to have an earnest money/deposit check to give to the seller to hold until closing. The money should be deposited into your checking account and readily accessible. This money is credited to you at closing for you to use or apply as closing costs or as part of your down payment. In some circumstances you may even receive this money back at closing. Prepare to have a minimum of $1,000 for your earnest check. The amount of earnest money required will increase as the price of the home you are buying increases. Typically expect $2,500 to be required for a $200,000 home. For homes in the $500,000 price range and up expect the earnest money to at least $15,000. Yes-they will cash the check.
3. Gather Information- I will gather information from you about the where you would like to live and the type and size of home you wish to purchase. I will then send you (via email or mail) MLS information sheets for homes that match your criteria.
4. Showings- You will notify me which properties you like from the list I sent you. I will arrange mutually convenient appointments for us to view the homes.
5. Writing the Offer- Once we find the home you would like to own, we will write an offer to purchase the home. I will collect the earnest check at this time. Along with the offer I will include a letter from your lender stating that you have been pre –approved for a loan to purchase a home. The lender letter strengthens your negotiating position and notifies the seller that you mean business. We will only make an offer after I have checked comparable home sales for the neighborhood to be sure the home is priced properly.
6. Colorado Real Estate Disclosures- There are several disclosures that you can expect to see and sign.
- The Colorado Real Estate Seller’s Property Disclosure.
This document contains information about the property including the mechanical systems and structural make up of the home. This document will alert you to what is available in the home and whether it is in working condition and sometimes the age of items such as the water heater, roof and appliances. The seller isn’t required to fill out this form.
- Lead Based Paint Disclosure.
Federally required form. This form is mandatory for any home that was issued a building permit prior to January 01, 1978. Lead paint can be hazardous to your health. A pamphlet about lead based paint should accompany the lead based paint disclosure.
- The Colorado Real Estate Square Footage Disclosure. This disclosure will tell you where the advertised measurements (square feet) of the property were obtained. Usually the listing broker and /or the homeowner will provide this information from the county assessor’s office records. These records are easily found online at the pertaining counties web site. Go to the "Community Links" section of this web site if you would like to look for property information yourself. It is public record.
- Mold Disclosure. This alerts you to the possibility of mold in the property and what you can do to test for mold. This is a required document by most brokerage companies but not required by the Colorado Real Estate Commission. Yet.
- Colorado Real Estate Closing Instructions. These instructions notify you which title company will be used, how the money will be dispersed at closing and who will pay for the closing. Usually the closing fee of around $240 is split 50/50 between buyer and seller. You will sign another set of closing instructions at the actual closing.
7. Home Inspections in Colorado- This is required for my clients. Expect to spend from $200-$500 for a home inspection in the Denver Metro area depending on the size and age of the home you are buying. You are required to be present during the home inspection. If you cannot attend for any reason arrangements will be made.
I also highly recommend a RADON inspection on top of the standard home inspection. You can learn more about radon on the internet.
If you are purchasing a home that is serviced by a well and septic system be prepared to have the well and septic system inspected. Well and septic system inspections are a must. I will be happy to recommend inspection companies that my past clients have used successfully.
Immediately after your offer to purchase the home is accepted by the seller, we will schedule a home inspection. Usually the inspection will be completed within 10 days of the contract being accepted. The home inspection is used to identify any safety issues or structural problems with the home. This is not a time to search for cosmetic problems that are easily cured. The inspector is looking for major problems. If the inspector finds items in need of repair we will then ask the seller to repair or credit you for the problems. The sellers are not required to repair anything.
8. CLUE or Claims Loss and Underwriting Exchange- I will order a CLUE report from our internal company. This report checks the insurance claims history on the home to see if there have been any major problems reported with the home in the past 5-7 years. If there have been repeated insurance claims you may not be able to obtain homeowners insurance at all and if you can it will not be at a reasonable price. If this happens you will want to terminate the contract. This is for your protection. You don’t want to buy a home that you cannot get homeowners insurance for. Plus the bank will not loan you money until your insurance is in place. No insurance = No loan = No house.
9. Homeowners Insurance- You will need to secure homeowners insurance as soon as possible. This will be handled by you. Your lender will request this information well before the closing date. Be prepared.
10. Title Insurance- The seller pays for this. Title insurance protects you from past problems in the chain of title. You want to purchase a property with a clean title. Below are a few of the common problems a title search will find.
- Deeds, wills and trusts that contain improper wording or incorrect names.
- Outstanding mortgages and judgments, or a lien against the property because the seller has not paid their taxes.
- Easements that allow construction of a road or utility line.
- Pending legal action against the property that could affect a purchaser.
- Incorrect notary acknowledgements.
11. Home Owners Association: HOA rules and restrictions or Conditions, Covenants & Restrictions (CC&Rs) for your new neighborhood will be delivered to you. You need to read through the covenants to be sure you understand and more importantly that you can live with all the requirements. If you don’t agree with the covenants, you will need to terminate the contract. You must let me know before the "Governing Documents and Title Objection Deadline" if you wish to terminate the contract for this reason. Example: If you have an RV and wish to park the RV at your residence, you better read the restrictions to be absolutely sure that RV parking is allowed.
12. Closing Funds- Your lender will notify you in advance how much you are required to bring to closing. Colorado is a "good funds" state. Meaning that the funds you bring to closing must be a "Cashiers’ Check" or you can have the funds wired to the title company’s account. If you bring a Cashiers’ Check please have the check made out to you (in your name). You will sign over the check to the title office at closing.
13. Closing and move in- Bring your drivers license or an acceptable photo ID. Most real estate closings in Colorado will be held at a title office and should take between 45 minutes and 3 hours. You will sign the documents for the loan and the purchase of the real estate. You are now a home owner!
14. After Closing- In Colorado it is not uncommon for the seller to request a moving date 2-3 days after closing.
Don’t hesitate to call me with any questions or concerns. This is a very brief look into the real estate transaction. With the right broker on your side the items listed above will go off like clockwork. The entire tansaction should be very smooth and easy!
Call or email me and let’s start looking for your new home in Denver, Colorado.
Steven Beam RE/MAX Alliance (303-941-HOME)
