Buying a home in Colorado Springs, Woodland Park, El Paso or Teller Counties? We've put together this list of home buying basics because whether you've bought a home many times before or you are a first time home buyer it is always good to get an overview or refresher of how the home buying process works. Every State and even different Counties within a State all have different practices and the Colorado Springs and Woodland Park Real Estate markets are no different. This page will give you a high level overview of the Home Buying Process in the Colorado Springs Area. When you are ready to buy, call us and we will walk you through every step to ensure you have the best home buying experience possible.
Every home seller who is selling their home through a Realtor®, is represented. The seller's agent is working to get the best price and terms for the seller. As a buyer you can and should have representation; a Realtor® that will work specifically to get you the best price and terms. We will help you determine exactly what you are looking for; then they'll help you find it. We will help you obtain financing that is right for your situation and walk you through each step of the process all the way to a successful conclusion.
Before you look at even one home you will want to meet with a mortgage lender to determine exactly how much house you can afford and what the requirements will be for you to get a mortgage. When you get pre-qualified the lender will ask you how much money you make per month and what the bills are you pay each month. From this they will be able to determine what is left over and how much of a mortgage payment you can afford. They will also run a credit report to make sure that there are no road blocks to you getting a loan. The Pre-qualification process does not take long but it is imortant to make sure you know how much you can spend before you fall in love with a home that you cannot afford. If you don't already know a mortgage lender, we work with the best in the business and are happy to refer you to them.
When buying a home it is important to know what you want. We will sit down with you prior to searching for homes to help you formally identify what you do and don't want and what are your top priorities in a home. Some of the things to consider when buying a home are: the timing of your purchase, the location and the specific amenities that will make the home a perfect fit for you. Often times, we find that your significant other may have different priorities then you and sitting down before looking at homes to identify what is important can make a big difference.
Once you know what you want in a home, we will set up an automated search of the local real estate database (frequently referred to as the MLS which stands for Multiple Listing Service) to identify homes that match your criteria. As new homes come on the market we will either notify you by phone or email of the new homes that came on the market. As you choose homes that you want to see, we will schedule appointments with the seller or listing company to show you those homes. If you are shopping from out of state or even out of the country, we can preview homes for you.
When you find that one home that gets you excited, the next step is to make an offer. An offer to the seller is done formally in writing and once accepted becomes a legal contract between you and the seller. Before actually writing the offer, we will prepare a comparable market analysis to determine what other homes in the neighborhood are selling for and what a reasonable offer price would be.
In the offer, we will be spelling out to the seller how much money you are offering for the house, when you will close on the sale, when you will have your financing in order and what is included in the purchase price (e.g. refrigerator, washer, dryer, swingset, etc.)
When submitting your offer you will also include an earnest money check. You give earnest money to the seller to show them you are serious about buying their home. If you default on the contract they get to keep your earnest money. Now, there are ways for you to legally get out of the contract without losing your earnest money. But, if you default on the contract (i.e., don't meet your dates and deadlines and don't close) then you can lose your earnest money. The amount of earnest money required varies depending on the home but would typically be about $1000 on a home under $200,000. When you close, your earnest money is used as part of your down payment.
Once we have submitted your offer to the seller, the seller can either accept your offer as is, reject your offer or make a counter offer. We will guide you through this process and tell you what is common and customary and he/she will be instrumental in negotiating terms of the sale that are acceptable to you.
After the offer has been negotiated and accepted the process of working through the contract contingencies begins. The standard Colorado Real Estate Contract has contingencies for:
Title - Can the seller actually sell the home to you or is there anything preventing them from selling it?
Home Owners Insurance - Can you insure the property at a price that is acceptable to you?
Common Interest Community Documents - If the property is in a community with a Home Owners Association (HOA), is the HOA financially solvent and after having read the covenants (rules and regulations) of the HOA are you still willing to live there and be bound by those rules?
Home Inspection - Is the house and the items in the house in good working order? And if not, is the seller willing to make repairs? Home inspection is actually much more detailed then just the house and we will walk you through all the items for which you should inspect.
Survey - What are the boundaries of the property and are any of the neighbor's things encroaching onto your property or yours on to theirs?
Financing - Can you get a loan with terms that are satisfactory to you?
Each one of these contingencies has a date or deadline by which time it must be completed. Your Realtor® will ensure you meet the dates and deadlines and will guide you through the nuances of each of these contingencies.
After all of the contingencies have been worked through you will go to closing. If you are a cash buyer you can close in as little as a week or two from the original contract date. If you are getting a mortgage, closings are usually scheduled 30 to 45 days from the original contract date. Closings occur at the Title Company issuing the Title Insurance. The closing takes about 15 minutes for a cash transaction and about an hour for a mortgage transaction. At the closing the buyer and seller typically sit down together. The seller signs documents giving you title to the property while you sign documents for the loan. After all the paperwork is signed and the money is exchanged you get the keys to your new Colorado Springs home.
This overview is very high level and there are nuances at every step. If reading this has triggered specific questions, please contact us for additional information.