How to Buy Your First (or Next) Home in Denver

In today's real estate landscape, with high-interest rates and sizable sale prices, making that first (or next) purchase can feel like a leap of faith.  Especially in the Denver metro area, the sale prices combined with interest rates in the 7-8% range can take a sizable toll on your budget.  On the surface, it might seem like a challenge, but with careful consideration and strategic planning, you can get yourself into that first home and start enjoying home ownership and all the great benefits that come with it.   I truly believe that there is an opportunity in this market for those who are informed, prepared, and ready to make a move.

If you're considering a home purchase in the next 12 months, here are my 5 essential tips to get yourself in the right position to succeed as we wrap up 2023 and get ready to harness all of the opportunities in 2024.

High-interest rates mean that securing favorable financing is crucial. Begin the process by reviewing your credit score and financial documents. Work closely with a mortgage advisor (I have a few favorites I can refer you to) to explore loan options and get pre-approved for a mortgage. Even if you have been prequalified or preapproved in the past, it's essential to get a current view of what your lending options are given the changing market conditions. Pre-approval strengthens your position as a serious buyer, making sellers more receptive to your offers.

With the market beginning to get back into balance, you hopefully can avoid some of the crazed bidding wars we saw over the last two years. Today’s market resembles more closely what we saw in 2013 to 2019, and buyers can be more discerning and take additional time to decide which home is right for them. Consulting with a trusted real estate advisor is a good first step to start your search.  I recommend taking the time to focus not just on the home itself but also consider the neighborhood, community amenities, school districts, and future property values.  I compiled a guide to give you easy access to some of the most important details you should know about buying a home in Denver, you can view it here.  

The satisfaction I want you to feel with your investment will heavily rely on how well the home aligns with your lifestyle aspirations and long-term goals.  For many, your first home will not be forever home, but it will be an important stepping stone in your real estate journey.

In a market with high-interest rates, sellers may be more willing to negotiate, especially if their property has been on the market for an extended period. As we see days on market increase, depending on seller need and urgency, we generally begin to see more room for negotiation. Approach negotiations with a well-thought-out strategy. While price negotiation is important, consider other negotiation points, such as timeline, closing costs, repairs, and especially rate buy-downs. In most cases, you can save yourself more money over time by negotiating a seller concession for a temporary rate buy-down than negotiating the purchase price. Being flexible and creative in your negotiation approach can make your offer more appealing to sellers, increasing your chances of securing your first home.

Think not only about your immediate needs but also about the property's potential resale value. Work with your trusted real estate advisor to understand the neighborhood's historical price trends and future development plans. Consider factors such as proximity to amenities, the quality of local schools, and the overall appeal of the area. A property that is well-positioned in a desirable neighborhood is likely to hold its value better over time, providing you with a solid investment for the future.  

I personally used this approach to begin building my real estate portfolio.  While living in California as newlyweds, we purchased our first home in a desirable neighborhood. It wasn’t the biggest or nicest house, but the equity we built through renovations plus the appreciation of the neighborhood allowed us to sell and move to Denver where we purchased a new primary residence and an investment property, both in desirable areas with room to build more equity.  We’ve since used that equity to continue investing and building out an expanded real estate portfolio.

If you're in the market to buy/sell a home, or you just want to chat about real estate, let’s connect!  I'm happy to share my insights, market resources, vendor referrals, or anything else that would be helpful in your journey.

Michelle Fitzgerald
Real Estate Broker, Realtor®

email: michelle@michellesellsdenver.com
Instagram: https://www.instagram.com/michelle_sellsdenver/