First Time Home Buyer Questions To Ask Your Realtor

Getting into the real estate market can be an intimidating one, especially for first- time-home-buyers. As a real estate agent, it is my job to help my clients feel the most comfortable when they are getting ready to look for their first home or when they are deciding to sell their first place. I thought I might take this blog to sit down and answer some questions I have been asked over the years by my first time homebuyers to help those thinking about buying a home prepare to get into the market (and hopefully work with me!).

Homebuyer: This is the first time I am buying a home and I have to say, I don’t really even know where to start! Between finding a lender, choosing an area live and starting to look at homes, I am feeling a bit like my head is all over the place. Where would you recommend I start the process?

My Answer: Start with finding a REATOR who really knows the market and works full time on and in their business.  Ask for referrals in your sphere but also search online in the area you think you may want to move to and find a specialist in that area.  I recommend interviewing three different REALTORSand asking how long they have been in the Business, if they work with first time homebuyers, why they are a realtor and what types of Buyers they like to work with.  Then from there I would search all their profiles online, like LinkedIn, Facebook and Instagram to see how they market themselves and what type of person they are to see if you have the same interests.  Working with likeminded people can really help the process go a lot smoother.  Once you find the REALTOR you want to workwith then ask that REALTOR who they recommend for a lender.  Ask them to give you three referrals and then do the same thing with these lenders that you did to find your REALTOR.  Once you find your lender then work on getting pre-qualified so you know how much you can afford.  Once you have done all that you can start looking at homes. 

Homebuyer: I have heard in this market, if you are a cash buyer, you have a better chance at getting the home, is that true? I also have read that many lenders recommend you come to the table with the ability to put 10% of your loan down, what if I currently only have about 7% I can put down, should I wait? I also have some credit card debt and am thinking about buying a new car but some friends told me that I should hold off on making a big purchase before my house and try my best to pay off my credit cards, would you agree with that?

My Answer: No, it's not always true that you cannot win a bid if you don't have all cash.  There are ways to win a bid other than just making a cash offer.  I recommend hiring a REATLOR who has a lot of experience in negotiations like one who holds a MCNE designation.  Regarding buy now or wait... I am a huge believer in owning real estate instead of paying rent so If you are able to buy then I would do this before a new car if your car is still able to get you to where you need to go.  Talk to a lender to see where you stand on your credit and if you can get pre-qualified for a mortgage. 

Homebuyer: This market seems to always be changing and I keep hearing people talk about the “bubble” that they believe is coming sooner than later. What is your opinion on this “bubble” and should I keep waiting to buy a place or should I try to get in the market when I have the means to do so?

My Answer: The Denver market and economy is very strong and the local and national economists don't see a bubble in our future but more of us evening out.  We actually don't have enough housing for our population which is why our prices continue to rise in the Denver market. 

Homebuyer: How long does the average buying process take in Denver’s market? From the day I go under contract to the day I receive my keys to my house, how long should I expect?

My Answer: This depends on the lender and when they can get the appraisal done and through the approval process.  Every borrower is different on how they get qualified.  We only have about 600 appraisers in the Denver area and with refinances and purchases on the rise there is a shortage.  Again, I recommend hiring a great REALTOR and Lender who know what they are doing and how to get you to the closing table.  To answer your questions thought I just closed on a transaction and we got in done in 24 days from contract to closing.   Most of my contracts have been 30-60 days this year but it all depends and there are different variable for each transaction.

Homebuyer: If you were a first time homebuyer, what part of the city would you look in? Where is the area you think you can get the best bang for your buck or where do you think is the next hotspot?

My Answer: Oh gosh there are so many different areas but I feel like if you want to stay close to the city I would look anywhere that is close to our mass transit system and light rail. The neighborhoods I would look at are Globeville, Elyria, Swansea, Sunnyside, Berkeley, Chaffee Park, Edgewater and even into Wheat Ridge, Arvada and Westminster.  If you are looking at a little farther out and what to get the biggest bang for your buck I would look at going north east of the city as there is a lot of development happening in the north area and you can get far more for your money.   I would look at Northglenn, Thornton and Brighton and downtown Brighton as there is going to be a lot happening in downtown Brighton in the next several years. 

Homebuyer: Why should I hire you as my agent? What can you do for me and what can I expect from you?

My Answer:  You should hire me as your agent because I am a REALTOR with Denver Metro Association Of Realtors and work in and on my business full time.  Not only am I am member of DMAR I also serve on the Market Trends Committee so I make sure that I have my pulse on the market and what the current market trends are.  I also have a coach, I am a MCNE (Master Certified Negotiation Expert), I make sure to continue my education in real estate by taking real estate related courses.  Additionally I run my real estate business like a true business where I have an assistant and a transaction coordinator to assist me through the process so I am able to give you my full attention from start to finish.  My service doesn't stop there as I will continue to service you needs even after you have closed.  I will make sure to stay in touch to make sure if there is anything you need that I am always available to answer questions or give advise.

I hope these questions and answers have given some insight to some of you new homebuyers out there about this Denver real estate market. If you have more questions or want to chat more about looking for a home, feel free to shoot me an email or give me a call today I would be more than happy to meet with you! 

Redfin’s 1% listing fee not applicable in this Denver market

Just this week there are changes coming to the Denver real estate market thanks to Redfin, a Seattle based real estate brokerage. Redfin has decided to roll out a new commission platform in which Redfin will drop its listing fee for homes in metro Denver to 1%. With the average listing percent of a home ranging from 2.5%-3%, this change could put more downward pressure on area real estate commissions.

Redfin first entered the Denver market back in 2011 with a listing fee of 1.5% while newer flat-rate firms such as Redefy and Trelora charge a set price of $2,500 to sell a home. But Redfin does have some particulars when it comes to this new listing price commission: they will charge a minimum-listing fee of $3,000 on homes priced at $300k or lower. But above that level, every property will have a guarantee of 1% of the sales price.

When asked what would all of this 1% entail when it came to the work put into the seller’s home, Redfin says the lower listing fee includes a full-service agent, open houses, professional photography, printed brochures and a digital marketing campaign that allows potential buyers to see a virtual-reality scan of the home.

This isn’t the first company to offer a 1% listing fee, many firms have come and gone in the Denver market, none of them surviving long term. As a seasoned REALTOR®, I can understand why a firm might not make it that long at those listing prices for various reasons.

In today’s market, the average real estate agent’s commission is 6%. Now, that does not all go to one agent, it is split between the buyer’s agent and the seller’s agent. The buyer’s agent gets around 2.8% while the seller’s agent gets 3.2%. Many people do not understand that even after that split, the money is then divided out again. When you hire a REALTOR®, you are paying for their time, energy and dedication. With those commissions, your agent is paying out their firm, using the money to market your home and is going towards all the blood, sweat and tears they put into your property with writing contracts, dealing with other agents, hosting open houses, taking you to look at houses and so much more. How can a REALTOR® negotiate, be your advocate and dedicate their time and attention to your transaction for only 1%?

If you are an expert in your market then there will be a demand for your services. I always tell my clients, it would be like if you went into your work tomorrow and your boss asked you to do the same amount of work you are doing now but have your paycheck cut by 40%, would you be ok with that? In real estate especially, this is a line of business that buyers and sellers cannot do alone. There is a reason all real estate agents are required to attend 180 hours of school and have continuing education every year because Colorado believes in grooming good real estate agents to help the public. When you pay for a REALTOR®, you are paying for so much more than just their expertise and they can be the best agent they can be for you because they are being paid accordingly to their skill set. If any real estate broker was making 1% of the transaction then they would not be able to sustain their business efficiently as they would be working hard to make deals close quickly so they could make more money which would cause quality of service to go down and client relationships to suffer.

In this world, you really do pay for what you get. If you want to work with a REALTOR® who can give you top notch service then hire a REALTOR® and pay for all their time and efforts that will in turn make for a smooth transaction. If you feel you are ready to put your place on the market, feel free to shoot me an email or give me a phone call and let’s grab a cup of coffee and discuss how I can help you as your real estate broker. 

With Rent Prices On the Rise in Denver, It Is a Great Time to Buy

A week or so ago, Zillow came out with a new forecast for the Denver rental market: Zillow has warned renters to prepare for rents to spike again in Denver as we head into 2017. Currently the rent index in Denver is approximately $2,013 a month, the highest of any major metro area not located along a coast. The next large metro cities do not even come close to the rent index as Denver with Chicago at $1,643, Dallas at $1,543 and Phoenix at $1,247 a month.

            For those of you hoping that Denver rents may be going down, especially with all the new apartment builds going on around the city, I hate to disappoint you but that is far from the case. Zillow predicts that rental growth will continue to be strong, even stronger than we have seen in 2016. They are calling for metro Denver’s already elevated rents to rise another 5.9% in 2017 following a rise of 4.1% this current year. The only two cities that will see a steeper rent rise are Seattle with a 7.2% increase and Portland with up to 6% increase. The United States as a whole is looking for rents to rise 1.7% in 2017, which matches the pace for 2016.

            Zillow’s survey included apartments and single-family rental homes that caused a higher rent average. But this data supports the fact that tenants who are looking for more affordable options are bidding up rents in outlying communities and older suburbs. The next year is calling for over 11,000 new apartments and all are calling for pricier rents. Denver is seeing a rise of high-rise luxury apartments with ten projects at twelve stories or taller, including one at 34 stories and one at 31 stories located in the Five Points area and in downtown Denver.

            For more numbers and information, read more from the Denver Post here: http://www.denverpost.com/2016/10/06/prepare-for-rent-hikes-again-zillow-warns/

All of these rent increases only mean more pressure on Denver renters who are already seeing a lot of their hard earned paychecks going towards rent each month. I have met with numerous new clients over the past year that have decided it was time to take the jump into owning their own home because financially it made more sense and in the long run, they would be setting themselves up financially. This market can be an intimidating one, with a large amount of buyers and low inventory, many homebuyers, especially new ones, are scared to get into the market. That is why you find an agent who is going to go to bat for you every step of the way, from the day we decide to work together to the day I hand you over your keys to your new dream home. I have worked in this industry for many years and have watched the Denver market have its share of ups and downs. But the Denver has always been a steady one and that is not looking to change anytime soon. For what you are paying in rent, I can sit down and go over numbers to show you what you can afford in a house paying less than your current rent and getting more bang for your buck.

            If you think it is time to get out of the renter’s rut and jump into the housing market, give me a call today or shoot me an email and let’s grab coffee to talk about how I can best assist you as your real estate agent. 

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