How to Buy a Home in a Competitive Buying Market
Market Trends and Colorado's Popularity
If you are looking to buy a home in Colorado there are some things you should know. The real estate market has gone up since 2012 and the trend is expected to continue. In turn, Colorado is becoming a popular place to buy a house and settle. These increases have created a seller's market, making the buying field a competitive place to be. Every buyer out there is looking for the best deal on their new home, making it difficult for buyers to find the home they want at a price they can afford. But there are ways to make yourself look stronger to a seller, putting you in front of the many other buyers, all who want the same house you do.
1. Get Prequalified
Before you even start looking at homes for sale, get prequalified with a lender. This will tell you how much house you can afford, as well as give you a strong starting point when you do find the house you want to make an offer on. Sellers are far more likely to accept an offer from a buyer who already has a loan lined up than from a buyer who hasn't even started the process.
2. Know Your Credit Score
Your credit score has a large impact on your interest rates. Even an increase of just 10 points on your score can have a significant impact on your rates. It is possible to raise your score quickly, even after you have been preapproved for a loan. Talk with your lender about ways to increase your score and then do what you can while you are home searching. It could save you a vast amount of money in the long run.
3. Have Your Documents in Order
You will need previous years W-2's, tax returns, pay stubs, and bank statements. It can take time to compile these documents, so start now and have them ready for when you are asked for them. Your bank, the IRS, and your employer can all help you in obtaining any of these documents that you are missing.
4. Review Your Documents
You may think you know what is in your documents, but review them anyway. Ensure that any large deposits made into your bank that are not job related can be accounted for. A lender will require proof of these deposits. Was it a gift from a family member? An inheritance? Did you sell your boat? They will want to know where the money came from and won't take your word for it.
5. Work With a Reputable and Trusted Agent
Not all realtors are the same and while one may be perfect for someone you know, they may not be the perfect fit for you. Your Realtor should be someone that you are comfortable with, someone you trust, and somebody who knows the area you are buying in from top to bottom. A good realtor will be a huge asset to your buying power. They will know what it takes to buy a home in this highly competitive market. Start your house hunting right with a professional realtor on your side. Buying a home in Colorado isn't an overnight task; it takes time and perseverance. Being pre-approved for a loan, working with the right realtor, and having your documents in order could put you in front of other buyers out there. Sellers are more apt to accept an offer from a buyer who is ready to go than they are from a buyer who appears to be just window-shopping.