1. Obtain a pre-approval //

Getting pre-qualified is the initial step in the mortgage process, and it's generally fairly simple. You supply a bank or lender with your overall financial picture, including your debt, income, and assets. After evaluating this information, a lender can give you an idea of the mortgage amount for which you qualify. Pre-qualification can be done over the phone or online, and there is usually no cost involved. Loan pre-qualification does not include an analysis of your credit report or an in-depth look at your ability to purchase a home.

Getting pre-approved is the next step, and it tends to be much more involved. You'll complete an official mortgage application, then supply the lender with the necessary documentation to perform an extensive check on your financial background and current credit rating. (Typically at this stage, you will not have found a house yet, so any reference to "property" on the application will be left blank) . From this, the lender can tell you the specific mortgage amount for which you are approved. You'll also have a better idea of the interest rate you will be charged on the loan and, in some cases, you might be able to lock in a specific rate.

In this competitive market, a full pre-approval is required to submit an offer on a home. Ask me for lender recommendations and what questions to ask when shopping for a mortgage professional. Not all lenders are the same.

Here’s a list of what you’ll need to obtain a pre-approval:

• YOUR RESIDENTIAL ADDRESS FOR THE PAST 2 YEARS

• LANDLORD NAMES AND ADDRESSES FOR THE PAST 2 YEARS

• BANK ACCOUNT STATEMENTS FROM THE TWO MOST RECENT MONTHS FOR ALL CHECKIN AND SAVINGS ACCOUNTS

• OTHER ASSET STATEMENTS FROM THE PAST TWO MONTHS FOR ANY CDS, IRAS, STOCKS,

• BONDS OR OTHER SECURITIES YOU INTEND TO USE FOR YOUR DOWN PAYMENT

• CURRENT REAL ESTATE HOLDINGS, INCLUDING PROPERTY ADDRESS, CURRENT MARKET VALUE, MORTGAGE LENDER'S NAME AND ADDRESS, LOAN ACCOUNT NUMBER, BALANCE AND MONTHLY PAYMENT

• PAYCHECK STUBS FROM THE LAST 30 DAYS SHOWING YOUR YEAR-TO-DATE EARNINGS

• W-2 OR I -9 TAX FORMS ( ISSUED BY YOUR EMPLOYER) FOR THE PAST TWO YEARS

• A LIST OF ANY NEW MONTHLY DEBTS NOT LISTED ON YOUR CREDIT REPORT (AUTO LOANS, STUDENT LOANS, MORTGAGE LOANS, CREDIT CARDS, ETC. ) , INCLUDING CREDITOR NAME, ADDRESS, ACCOUNT NUMBER, MINIMUM MONTHLY PAYMENT AMOUNT AND OUTSTANDING BALANCE ON EACH ACCOUNT

2. Begin the House Search //

At our first meeting, we will discuss what it is you’re looking for in a property, your timeline and go over any and all questions you may have. I will then ask you to fill out an intake form that will go even deeper into questions about your home search. This form can be found here. From the information I am able to gather, I will then set you up on the Colorado MLS. In the portal, you can save homes, discard homes and take notes, all of which I can see on my end, so it’s a great way for us to communicate! You will be notified daily of any new properties that become active on the MLS that fit your search criteria. With this fast paced market, it will be important for both of us to keep an eye out for new listings and go see them in person as soon as possible! It's a good idea to make a list of 5-8 homes to see at one time in order to make the most of your time during each outing. It is my job to be extremely available to you and flexible when it comes to scheduling showings. Believe it or not, some homes become active and change to pending within just a few days. Your realtor needs to be quick, flexible, available and communicate well in order to find you the perfect home.

3. Make an Offer //

In this market, most offers that you make have to be strong. The most important factors to get you under contract are having a competitive offer, having a good lender to call on your behalf and to have your agent build a good relationship with the listing agent. A lot of offers are about the price but being personable can also go a long way.

Prior to submitting an offer, it's important to find out if there are any other offers on the table, what it will take to be competitive and then typically submitting at a strategical time, not too early and not too late to their requested acceptance deadline.

If we find a home that you want to make an offer on, I will review the comparable properties in that area to help you determine a solid offer on the home. I will then call the agent to find out what I can about the home and any current offers. From there, I will send you paperwork that you will need to review and sign. The first will be the ‘Definitions of Working Relationships’ which describes all possible relationships that can take place in the State of Colorado. The second will be the ‘Exclusive Right to Buy’ which allows me to represent and advocate for you as your agent. The final document will be the ‘Contract to Buy and Sell’ which is the official offer that will be submitted to the listing agent.

4. Under Contract //

Once an offer is submitted, it typically takes 24 hours to hear back on whether your offer will be accepted or not. Sometimes, a seller will counter an offer and there may be some back and forth before both parties come to an agreement. When both parties have signed the contract, you are then considered under contract or pending. You will have about 48 hours from this point to deposit your earnest money. Earnest money is typically 1% of the purchase price and is considered a “good faith” deposit on the home. These funds are held in escrow at the title company and then used towards the buyer’s closing costs or purchase price at closing.

During this time, it is extremely important to be in close contact with your lender . Make sure to provide them with any documents they may need as quickly as possible. This will ensure we stay on track and can close on the agreed upon date. In order to make sure your loan is approved, we have to make sure your credit is protected and does not change. Postpone any large purchases and make sure to not open any new lines of credit until we have closed.

Title work is also ordered and the due diligence process begins.

5. Due Diligence //

One of the most important steps in the purchase of a home is the inspection. This will cover all major systems of the home including HVAC, plumbing and electrical. The inspector will also inspect the windows, roof, sewer line, foundation and so much more! The inspection typically takes about 3-4 hours and will be scheduled a few days once you're under contract. Other due diligence items to consider include radon testing, sewer scope, roof inspection, chimney inspection, termite inspection.

The inspection cost is generally calculated by square footage, age of home and distance. Inspections typically range from $300-$700 depending on the size of home.

Other costs include: (these are estimated fees)

Sewer Scope: ~$150

• This is one additional test that I always advise my clients have done. If there are sewer issues, you could be avoiding a $10,000 repair down the line.

Radon Test: ~$150

• Suggested for garden level condos, townhomes and detached single family homes

Roof Inspection: ~$200-$300

• If there are known roof issues or if the roof hasn't been replaced in a while, it's advised to get it inspected. Your inspector will do a basic inspection.

Structural Engineer: ~$300-$500/hour

6. Inspection Objection Deadline //

There is a date in the contract, typically a week or so after the "under contract" date called the Inspection Objection. Once the inspection is done and the report has been sent, you and I will need to review the report and decide what is worth objecting to and asking for the seller to fix. This step in the process involves negotiation from both parties and can be one of the reasons deals, unfortunately, fall through.

Obviously, health and safety issues are a concern, but now is not the time to object to a door not locking or a light bulb needing to be replaced. Think major issues only like HVAC, plumbing, electrical, structural.

Once we've decided what is important to object to, I will write up the objection and send to both parties. From there, the sellers can either agree to some, all or none of the items. Typically there's some sort of negotiation and both parties will have to compromise in order to come to a resolution. If seller and buyer can not come to an agreement, then you may terminate the contract at this time and have your earnest money returned.

As your agent, it is my job to assist you in deciding what to object to and, of course, to negotiate heavily in your best interest.

7. Association Documents (if applicable) //

If you are purchasing a property that has an HOA, your realtor will inform you of the fees and what is covered prior to submitting an offer. Once under contract, there will be a deadline in the contract that the seller must provide association documents. After receiving all documents, you will have a few days to review (budget, bylaws, etc). Should there be anything in the HOA documents that are a deal breaker, you will have an association documents termination deadline which allows you to terminate the contract and receive your earnest money back.

8. Shopping for Homeowner’s Insurance //

Unless you are funding your own home, your lender will require you to obtain Homeowner 's Insurance to protect your home in case of damage caused by unforeseen circumstances. If you' re purchasing a condo, you will need to look into condo insurance instead (typically an H06 policy). I usually tell people to start with their car insurance provider and see what they quote you. It's smart to get 2-3 quotes.

9. The Appraisal //

A home appraisal is an unbiased estimate of the true (or fair market) value of what a home is worth. All lenders order an appraisal during the mortgage loan process so that there is an objective way to assess the home's market value and ensure that the amount of money requested by the borrower is appropriate and protected.

Who pays and how long does it take?

The buyer usually pays for the appraisal unless they have negotiated otherwise. Depending on the lender, the appraisal may be paid in advance or incorporated into the application fee; some are due on delivery and some are billed at closing. Typical costs range from $600-$800.

An appraisal visit usually takes anywhere from 15 minutes to 1 hour, depending on the size and complexity of your property. In addition, the appraiser spends time pulling up county records for the values of the houses around you. A full report is sent to your loan officer, real estate agent, and/or lender in about a week.

What if the appraisal is too low?

A low appraisal can present a problem when there’s a large difference between what you’ve agreed to pay and the appraisal price.

Usually, the seller’s agents and the buyer’s agent will respond by looking for recent sold and pending listings of comparable homes. Sometimes this can influence the appraisal. If the final appraisal is well below what you have agreed to pay, you can re-negotiate the contract or cancel it.

10. Setting up Utilities and Scheduling Movers //

At this stage, we are about 1-2 weeks away from closing on your new home. You will want to start calling your utility providers to get gas and electric transferred into your name on the day of closing. You will also want to determine who your trash provider is. Water will be transferred by the title company on the day of closing. Also, start thinking about TV and internet.

Movers should be scheduled as soon as possible, as most are booked out by a few weeks. When deciding on movers, be sure to read online reviews. Also, ask if they offer additional insurance coverage for an extra charge. Most moving companies have basic insurance coverage included in their bids, which will not fully protect your items should they be broken.

11. Cleared to Close & Review of Final Settlement Statement //

Being clear to close (CTC) means that you have satisfied all conditions for your mortgage lender. They include:

• Underwriting conditions for the borrower, such as updated bank statements

• Funding conditions, including the payment of closing costs and the down payment

• Quality control for the lender, including a final credit check and employment verification

A “clear to close” buyer is in a good position. That’s because the mortgage underwriter has reviewed and approved all documentation required to fund the loan. The lender can then send a clear to close letter. All that remains is the actual closing process.

In order to get to this point, be sure to:

• Respond punctually to your lender

• Give only what they ask for

• Maintain the status quo

• Furnish proof of employment

• Don’t mess with your credit

• Get your insurance up to snuff

• When in doubt, ask the lender and communicate! If there are any unusual circumstances, let them know immediately.

The final settlement statement is the statement that summarizes all the fees and charges that both the homebuyer and seller face during the settlement process of a housing transaction. This will outline your credits (loan, earnest money, any seller concessions) and debits (closing cost fees).

12. Final Walkthrough //

The purpose of the walk-through is to evaluate all updates that were agreed upon in the inspection resolution and is the last opportunity to view the home before closing. It typically takes about 30-45 minutes and this will be the time for us to make sure no NEW issues are present and that all agreed upon items have been fixed. I will bring the the inspection report and Inspection Resolution with me to the walk-through for reference. This is usually scheduled for 24 hours or less prior to signing closing documents.

13. Closing Day //

As the buyer, you will need to bring good funds to the closing table either via wire transfer or cashier’s check. The final amount needed will be reviewed by your lender the day before. On the day of closing, be prepared to be at the title company for about an hour signing documents.

Exchange of Keys

Once all the documents have been successfully signed and all money dispersed, you are now the proud new owner of the home!  It is also a good idea to exchange contact information in case questions arise during the move-in process.

Have questions about buying? Let’s grab a coffee!