Buying a house!

[Zambeezy]

I'm finally starting to get the gears turning on buying a house here in Denver. I've been here for about 2 years now and love it here, so I think I'm ready to put down roots and start growing some equity!

 

Moved here from Oklahoma and man...the housing markets couldn't be more different (for obvious reasons). It was hard to swallow the prices for awhile but after tracking my spend for the past 6 months, I think I'm comfortable with committing to a mortgage. I owned a home in Oklahoma but wanted to rent for awhile when I moved here to get the lay of the land, see what areas I liked/didn't like, and see how close I wanted to live to work to cut down on commute times (and the huge cost increase that comes with that proximity!)

 

This is exciting but also stressful with so many details to take care of and the whole exercise of finding a home, making an offer, getting the inspection, etc...only for some cash buyer to swoop in and outbid me, making the process start all over again!  Still, I'm hoping to start putting in offers around April so I'm only paying Rent + Mortgage for a month at most.

 

Anything you guys have learned with trial and error when buying your homes?

[jdog]

Only thing I have is good luck

Stock 1988 swb 4.0 ax15 np 231.

[Zambeezy]

Just now, jdog said:

Only thing I have is good luck

Stock 1988 swb 4.0 ax15 np 231.
 

Thanks jdog, I'll take all the good luck I can get! Whereabouts are you located in Denver?

[jdog]

Arvada area and you?

Stock 1988 swb 4.0 ax15 np 231.

[BeaterComanche86]

I’d say to try and be prepared for unexpected costs (repairs, furniture, etc) and if you can plan for that you’ll be in good shape. Good luck and enjoy shopping around

[Zambeezy]

25 minutes ago, jdog said:

Arvada area and you?

Stock 1988 swb 4.0 ax15 np 231.
 

I'm in Uptown/North Cap Hill now. Looking in the Berkley/Sunnyside area as well as Arvada South and East of Standley Lake. I'm willing to pay for a more walkable area and a short commute to downtown (hopefully via bike if the weather is nice) but these prices...woof!

[Zambeezy]

17 minutes ago, BeaterComanche86 said:

I’d say to try and be prepared for unexpected costs (repairs, furniture, etc) and if you can plan for that you’ll be in good shape. Good luck and enjoy shopping around

Absolutely. I've adjusted my 401(k) and HSA contributions to free up some cash for these surprises. Once I've settled in and have a good understanding of what will need to be replaced/repaired and the costs, I'll max those accounts out again. At the least I'm contributing enough for the full employer match so I'm not missing out on any "free money"

[jdog]

I'm in Uptown/North Cap Hill now. Looking in the Berkley/Sunnyside area as well as Arvada South and East of Standley Lake. I'm willing to pay for a more walkable area and a short commute to downtown (hopefully via bike if the weather is nice) but these prices...woof!

Oh yea the prices here are insane in town, outside areas aren't as bad but still who wants to drive that far to go to work each day.

Stock 1988 swb 4.0 ax15 np 231.

[75sv1]

'.only for some cash buyer to swoop in and outbid me'

Preapproved loan? Also, did you get any analysis as to what $/month your budget would be?  

[derf]

I'm getting started on my house hunt as well.  I'm looking south, in and around Littleton since I work at the south end of Wadsworth.

 

The prices seem to have leveled off the last year or two so it seems like the time to commit.  Gotta get the loan approval and what not so I can jump in as soon as I find a house I want.

 

It's also good that I only have a basic criteria for a house and if one seller becomes a pain I can move on to the next house.

 

Good luck on your hunt.

[Zambeezy]

Just now, 75sv1 said:

'.only for some cash buyer to swoop in and outbid me'

Preapproved loan? Also, did you get any analysis as to what $/month your budget would be?  

I'm preapproved up to like $850k. Obviously won't be spending that though. I have several friends who recently bought in Denver and heard all the stories of finding a home they like and can afford, putting an offer in, and then having someone offer more and all cash, which made the seller obviously take that offer. Can't argue with taking the higher bid but it does sound like a frustrating cycle

 

I'll be putting <20% down so with PMI, insurance and taxes I'm looking to keep it around $2750/month. That'll allow me to pay extra toward the principal without really tightening the purse strings too much

[Zambeezy]

1 minute ago, derf said:

I'm getting started on my house hunt as well.  I'm looking south, in and around Littleton since I work at the south end of Wadsworth.

 

The prices seem to have leveled off the last year or two so it seems like the time to commit.  Gotta get the loan approval and what not so I can jump in as soon as I find a house I want.

 

It's also good that I only have a basic criteria for a house and if one seller becomes a pain I can move on to the next house.

Yeah I feel like it's actually a decent time, all things considered.

[derf]

Just now, Zambeezy said:

Yeah I feel like it's actually a decent time, all things considered.

There's actually a few houses that have been on the market for several months.  It's as much of a buyer's market as it's going to get I suspect.

[Money_Pits]

Holy crap, homes are expensive out there. Best of luck, and the only advice I have is make sure you have a reliable (and I mean reliable) vehicle before diving in on a home. I had two when I bought my house, of questionable reliability, and suffered for it pretty hard when the trans went in the neon, and then the engine blew in my wrangler, all in the first 7 months of home ownership (Granted they had a combined half a million miles). Taking on a car payment and dealing with the repairs was not a fun position to be in, one that five years later I'm still dealing with to an extent. So definitely make sure you are comfortable with your vehicle position before signing.

[mjeff87]

I know it's a cliche, but it's great advice.

 

Buy the worst house in the best neighborhood, not the best house in the worst neighborhood.

 

You're 2 years now in the area...you should have a good feel for what is and what isn't a decent area.  Look for a good structure with good mechanicals.....don't be easily swayed by cosmetic stuff (new paint, fancy fixtures, etc).  Make sure the foundation, roof system, plumbing and electrical system are all in good condition and meet or exceed code (for when the house was built).

 

Good luck hunting, and have fun

[Smokeyyank]

here's what I can tell ya since I just moved out of there and have been through the process a few times in the last few years. Bidding wars are done for the most part. The people putting 20-60k are long gone because the median price has skyrocketed to levels that don't sustain that ridiculous BS. Most time if someone's been doing a cash offer now it's going to be well below the asking price. Example,  my mom just sold her house and there was another one that was listed across the street.  They went 60,000 cash under asking price and it sold. When I sold my first house 4 years in Englewood it was under contract in less than a day and bid over. When I sold our last house last spring in the hell of Highlands ranch (seriously is the worst place ever). Took two weeks to go under contract and buyer bid under. O wouldnt worry about bidding wars or cash snipers. Only way that will happen is prime areas where someone intentionally prices their home to create that. You're window for prime buying is running out. Late spring and summer are peak times so be prepared to possibly pay a bit more and things going a little quicker.

 

To make your buying process as stress free as possible get ALL of your income, taxes, savings, bank statements, etc all in order. Basically anything financially related make sure you know where it is or have quick access to it.  Not sure if you're buying this alone or with the wife / girlfriend. But whoever's on the loan needs to do the same. Shop for rates as well. I ended up saving almost .5% by doing this on my current place. All you need to do is call around to a few Brokers and ask them their current rates based upon your credit score. They should be able to give you a general idea but obviously we'll want to do a pull on your credit to give you exact numbers. I prefer to work with Brokers because they're able to get you a lot more options than the standard bank will. Also most times their fee is less than what banks and credit unions charge.  Your credit score is also another thing that you should know right now know it very well. don't open any new lines of credit or take out an additional credit.

 

As for the inspection you just need to look around and find someone that has good reviews and try to see one of their sample reports. Some of them will give you a very detailed Report with pictures others will just give you a detailed Report with an explanation and other times they just kind of look at it and give you absolutely nothing that someone with half a brain would have been able to figure it out. Also depending on the year home you're looking for it would be a good idea to have the sewer scope. On our first house we bought in Englewood we did that and ended up finding that the sewer pipe needed to be replaced. We ask the seller to do it added up costing him 10 grand to get that taken care of. It was at least 10 grand that didn't have to come out of my pocket after the fact though.

 

Lastly, what I find to be the most annoying part is trying to find a realtor that's worth a damn. No offense to anyone in that position but that is the absolute biggest scam in the world. Just make sure whoever you choose as your realtor is going to have your best interest in mind. But more importantly that if you ask them to do something they're going to do it. Example, when we bought our first house in her first house in Englewood I I wanted to submit an offer under the asking price. My realtor thought it was an insult......so became a battle to finally get her to submit the offer that I wanted. She was a friend of my wife and it was our first house so learned a lot on that one. Do your own research and don't assume your realtor is going to do it or give you the right answer. 

 

I could probably keep going. So ask away if you want to know more. 

 

 

 

[Zambeezy]

11 hours ago, Smokeyyank said:

here's what I can tell ya since I just moved out of there and have been through the process a few times in the last few years. Bidding wars are done for the most part. The people putting 20-60k are long gone because the median price has skyrocketed to levels that don't sustain that ridiculous BS. Most time if someone's been doing a cash offer now it's going to be well below the asking price. Example,  my mom just sold her house and there was another one that was listed across the street.  They went 60,000 cash under asking price and it sold. When I sold my first house 4 years in Englewood it was under contract in less than a day and bid over. When I sold our last house last spring in the hell of Highlands ranch (seriously is the worst place ever). Took two weeks to go under contract and buyer bid under. O wouldnt worry about bidding wars or cash snipers. Only way that will happen is prime areas where someone intentionally prices their home to create that. You're window for prime buying is running out. Late spring and summer are peak times so be prepared to possibly pay a bit more and things going a little quicker.

 

To make your buying process as stress free as possible get ALL of your income, taxes, savings, bank statements, etc all in order. Basically anything financially related make sure you know where it is or have quick access to it.  Not sure if you're buying this alone or with the wife / girlfriend. But whoever's on the loan needs to do the same. Shop for rates as well. I ended up saving almost .5% by doing this on my current place. All you need to do is call around to a few Brokers and ask them their current rates based upon your credit score. They should be able to give you a general idea but obviously we'll want to do a pull on your credit to give you exact numbers. I prefer to work with Brokers because they're able to get you a lot more options than the standard bank will. Also most times their fee is less than what banks and credit unions charge.  Your credit score is also another thing that you should know right now know it very well. don't open any new lines of credit or take out an additional credit.

 

As for the inspection you just need to look around and find someone that has good reviews and try to see one of their sample reports. Some of them will give you a very detailed Report with pictures others will just give you a detailed Report with an explanation and other times they just kind of look at it and give you absolutely nothing that someone with half a brain would have been able to figure it out. Also depending on the year home you're looking for it would be a good idea to have the sewer scope. On our first house we bought in Englewood we did that and ended up finding that the sewer pipe needed to be replaced. We ask the seller to do it added up costing him 10 grand to get that taken care of. It was at least 10 grand that didn't have to come out of my pocket after the fact though.

 

Lastly, what I find to be the most annoying part is trying to find a realtor that's worth a damn. No offense to anyone in that position but that is the absolute biggest scam in the world. Just make sure whoever you choose as your realtor is going to have your best interest in mind. But more importantly that if you ask them to do something they're going to do it. Example, when we bought our first house in her first house in Englewood I I wanted to submit an offer under the asking price. My realtor thought it was an insult......so became a battle to finally get her to submit the offer that I wanted. She was a friend of my wife and it was our first house so learned a lot on that one. Do your own research and don't assume your realtor is going to do it or give you the right answer. 

 

I could probably keep going. So ask away if you want to know more. 

 

 

 

Excellent advice, all of it. Thank you for taking the time to put all that down!

 

I've definitely seen plenty of desirable (to me, at least) houses staying on Zillow/Redfin/Realtor.com for longer than I would expect, so I have hope that I'll be able to find one that I like when the time comes to buy. I've considered pulling the trigger early and just eating the cost of my rent (~1500/month) for the months that I have both a mortgage and rent, and wouldn't say that's off the table, but obviously that's a significant amount of money so I have to balance everything. Easier said than done, that's for sure!

 

Thankfully my parents helped me start building my credit back in college, so I have an excellent credit score that should allow me to get a great rate. Getting all my financial documentation in order now and I'm glad I kept such great records over the years and saved everything. Very thankful that my parents instilled these values in me at a young age.

 

On my last home, I paid extra for a guy to travel out of his region and inspect the house with a thermal imaging camera. I definitely want to do the same if I can find a reputable one here. Anyone you would recommend? That's great advice on the sewer pipe. Never would have thought about that.

 

I haven't engaged any Realtors yet but once I do, I'm going to be very clear that I've done this before and while I don't know everything, I do know some things and I know that if I want to put in an offer, they need to do it without hassle or I'll find someone who will. I'm absolutely a "trust, but verify" kind of guy so I'll have plenty of notes to research throughout the process.

 

Thanks again for the great write-up. Let me know if anything else comes to mind that I should take note of!

 

[Smokeyyank]

No worries, sorry for the dissertation. 

 

I don't know any inspectors off the top of my head unfortunately. I tried finding the last person I used down there but can't find it. They did a good job where detailed but not to the point of being ludicrous. Person that bought our last house had someone test the water pressure and said it was too high. I had my buddy who was a plumber come out and said that made no sense. Basically the inspector hooked up a pressure gauge to the outside faucet and it was slightly higher so made the assumption the pressure was too high, but there's a whole bunch of other things that factor into it.

 

Something to be weary of is roof inspections. They aren't worth a damn and all it is is a roofer taking money to provide a certificate saying the roof was "inspected" and has no issues.  Have the inspector take a peek at the shingles but if the seller offers to have an "certificate" it really doesn't mean anything. And with the amount of hail storms down there unless someone replaced the roof within the past few years, like 2-3, it's going to be a problem. We had a seller try to pull that on us. Roof was the original and they had a "certificate" saying it was good. Had a roofer come out and say absolutely not, roof needed to be replaced. 

 

Depending on the age of home and location bentonite is a huge problem down there. If you are getting anywhere with a basement make sure they floated the walls otherwise they can crack. You should also be able to look at survey results to see if your in a hotspot. 

 

Last thing to check is furnace, AC and water heater, last 2 homes we bought had bunk AC's. Catch is you can only test the AC during certain temps. First house I was able to fix with the help of my HVAC buddy second house we needed to get a new AC. You can look at the manufacture date and if it's close to end of its useful lifetime see if the seller will offer a concession for you to replace them. Our seller's where pricks on the last house and said it worked so they weren't going to do anything, the realtor again useless didn't push for what I wanted. Wife didn't help as I wanted to walk but she "loved" the house only to hate it a year later. When we did ours (furnace,AC and water heater) after the water heater bit the dust  that was 7k. That was a buddy price and all I paid for was the cost of everything and few hundred for my buddy to come install it. If you don't have a buddy like that expect 10k+

 

Another resources to look into for a loan  is CHFA. https://www.chfainfo.com/ they can sometimes get you a better loan offer, but they have some contingencies in order to utilize them. 

 

Last thing home warranties are a joke. Going back to the HVAC issue above. Our realtor offered to get us a warranty because of my concern and wanting to walk. Said OK, well when the AC didn't work it was still going to cost me almost 2k out of pocket to fix because the issues was the refrigerant and that wasn't covered along with something else.  

 

[Zambeezy]

Update! I put an offer on a house, escalation clause that went 12k above asking, and still didn't get it! This housing market is just weird sometimes.

 

Really liked that house and it was in a good location but on to the next one I guess. Going to tour one today and if it passes the eye test, I'm throwing an offer down. Gotta be quick in this market but with the multiple exit ramps (inspection, financing, etc.) available, I'm not too concerned with pulling the trigger on something I like. This one is in an IDEAL location, a quick 30 minute bike ride to/from work yet out of the busy parts of the city. Very walkable/bikeable area that is popular and continuing to grow in popularity. On paper, it would be a great house and a great investment as well (I try not to think of houses as investments and think that can be a dangerous and expensive mindset)

[rylee144]

My wife wrote the seller a letter on our house. It stated who we were, we work in public service, expecting our first baby, at the time and wanted this to be our first home. We beat out an all cash offer. The seller told us it was all about the letter that they picked us. It might help who knows. Good luck

[Zambeezy]

Just now, rylee144 said:

My wife wrote the seller a letter on our house. It stated who we were, we work in public service, expecting our first baby, at the time and wanted this to be our first home. We beat out an all cash offer. The seller told us it was all about the letter that they picked us. It might help who knows. Good luck

Funny that you mention this. My girlfriend's mom mentioned this the other day and I had never heard of this practice.

 

I don't have anything that would get sympathy though. I'm a single male, make a great salary in oil and gas, and have owned a home before. No points for me haha

[rylee144]

Lol bummer we checked all the boxes at the time. 

[Smokeyyank]

My buddy tried that......didn't work. Maybe if the market wasn't what it was it could work. 

 

Location is going to be a big challenge with Denver right now. Anything, and I mean anything around Downtown is just stupid money and is going to be competitive. Places I would never go after dark are now the "hotspots". That whole Rivernorth/five points area blows me away. I remember 10 years ago when I was delivery driver I wouldn't go over there after dark. Ghetto AF. And Globeville! GTFU out here, Purina smelling dumpster fire......

 

 

[Zambeezy]

1 minute ago, Smokeyyank said:

My buddy tried that......didn't work. Maybe if the market wasn't what it was it could work. 

 

Location is going to be a big challenge with Denver right now. Anything, and I mean anything around Downtown is just stupid money and is going to be competitive. Places I would never go after dark are now the "hotspots". That whole Rivernorth/five points area blows me away. I remember 10 years ago when I was delivery driver I wouldn't go over there after dark. Ghetto AF. And Globeville! GTFU out here, Purina smelling dumpster fire......

 

 

I've only been here for 2 years but I agree. I live in Uptown right now (so basically Five Points) and while Uptown is nice, Five Points is not. I'm not looking at any housing in that area whatsoever. Not looking at Globeville either, definitely not worth it with the noise, let alone the Purina plant.

 

I'm looking at the Highlands/Berkeley/Sunnyside area although I'm aware it wasn't that long ago that those areas were undesirable. Being able to bike to work in a reasonable time (30-40 minutes tops) is important to me and I think the upside of the walkability will lend itself to keep my home value high. I'm fully aware you can get a "better" home further away from Downtown but I think I can find the right balance of location and home amenities within my price point. Thankfully, my apartment lease isn't up until July, so I don't need to rush into anything.

[amsuco]

4 hours ago, Zambeezy said:

(I try not to think of houses as investments and think that can be a dangerous and expensive mindset)

 

Very wise on your part.