If you’ve decided the beautiful Centennial State is your next move, great choice! There are countless excellent reasons to live in colorful Colorado, and investing in Colorado properties is an exciting opportunity. With that said, it’s important to head into the process with your eyes wide open and approach this large financial decision with the gravity it deserves.
Follow this complete guide to finding Colorado property for sale and buying a house in Colorado that will fit your financial goals and lifestyle preferences!
1. Understanding the Colorado real estate market
Real estate markets can shift quickly, so taking the time to consult with experts and conduct research into the current market before you start searching for Colorado property for sale is critical. An understanding of the real estate market will help you keep home prices in context and give you a starting point for your budgeting and planning.
As far as the larger picture is concerned, Colorado is considered a very strong real estate market. As of June, the median sale price has seen a 2% increase since last year, and Colorado continues to see steady population growth each year. This means you might encounter competition as a buyer if you’re looking into popular areas, but it also means you’re likely to see your home appreciate relatively quickly here.
2. Selecting a lender and a real estate agent
Once you’ve conducted a bit of independent research on the Colorado real estate market, it’s time to decide on a real estate agent to work with in this process. Since buying a house in Colorado comes with its own set of concerns and unique details, it’s a good idea to seek out someone with thorough knowledge of the area.
Talk with friends or family to seek out referrals to ensure you’re working with someone you can trust. The real estate purchasing process involves in-depth legal documents, complex processes, and large amounts of money. You need someone on your side who you feel comfortable discussing risks and drawbacks with, and who you know will operate with your best interest at the forefront.
In many cases, your real estate agent will have trusted lender contacts for you to reach out to. You can start there, or you can use your own research from step one to reach out to your own preferred lender. It’s a good idea to talk with more than one lender to find out who can offer you the best rate and who you feel best about working with.
3. Preparing a budget
With your trusted professionals by your side, it’s time to prepare your budget. Your chosen lender will let you know what home price you’re pre-approved to buy, but remember that your top pre-approval amount is not necessarily your home budget. Consider the following elements as you prepare your budget for buying a Colorado house:
Cost of living in Colorado
The cost of living in many parts of Colorado is relatively high, with Colorado ranking #41 out of all 50 states in the U.S. News and World Report’s 2024 affordability rankings. Digging into the cost of living in each area will help you prepare to choose your exact location later on in step #4, and it will also help you formulate a realistic budget. For example, the cost of living in Colorado Springs is considerably lower than the cost of living in Denver or Boulder.
Down payment
Another aspect of your budget preparations is determining the down payment you’re able to pay for your home. This will impact the size of your loan, your interest rate, and whether you’ll need to pay private mortgage insurance (PMI).
With most loan types, buyers can get into a home with a down payment of 3%, but to avoid paying PMI, you’ll need to put at least 20% down. The amount of cash you have on hand will help determine your overall budget, and you’ll need to set aside additional cash for fees, insurance, and processing costs throughout the transaction.
Monthly payments and interest
Once you have a clear view of your cash on hand, your pre-approval amount, and the cost of living in Colorado, you can plug in home prices to calculate your expected monthly payments at various price points. Your lender will advise you on the expected interest, but keep in mind that interest rates can also change quickly, so leave a bit of wiggle room.
Determine the amount you are comfortable paying into your mortgage each month, remembering the cost of living and the down payment cash out of your bank. Include property tax, insurance and utilities on top of the mortgage payment in your calculations. From there, you can come up with a realistic budget for your search for Colorado properties.
4. Choosing your location
Your budget will likely inform which area is the best fit for your needs, and you can also explore neighborhood guides to learn about the amenities, things to do, and overall feel of each part of Colorado. Your Realtor can help you understand average home prices in each area so that you can balance your lifestyle and interests with your financial needs.
5. Determining must-haves for your Colorado house
It’s almost time to search for Colorado property for sale! In order to set up an efficient home search, your Realtor will sit down with you to determine your non-negotiable home features. Think about the following factors as you come up with your search criteria:
- Neighborhood
- Number of bedrooms
- Number of bathrooms
- Square footage
- Build year
- Lot size
- HOA details
- Number of stories
- Home type, such as single family vs. townhome
- Garage spots
- Air conditioning details
Once you’ve made a decision about details like these, your real estate agent will set up a search so that you can receive updates when homes hit the market and browse available homes that fit your needs.
6. Exploring Colorado properties
With a pre-approval letter in hand, your budget crystal clear, and your must-have details in mind, it’s time to get out and tour each Colorado property for sale that meets your needs! This stage is exciting, and it can also be overwhelming whether you’re a first time homebuyer or you’ve been through the process before.
A good real estate agent will help point out home features and respond to your concerns as they arise. You’ll work together to evaluate the details you love and the things that don’t fit your needs as you tour each home, and your real estate agent will help you determine which features would be easy to change, like paint colors, versus those that you can’t change, like location. Take plenty of notes and enjoy getting a look at a variety of Colorado properties while you continue to discover your preferences.
7. Following the purchase process
Once you’ve found a Colorado house you love, it’s time to submit an offer! Your Realtor will provide guidance around how much to offer based on the home’s list price and recent sales nearby. If the seller signs your offer letter, you’re officially under contract!
Now for the toughest part: going under contract doesn’t mean it’s a done deal, so it’s important to try to keep your emotions out of the next steps in the process. You’ll schedule an inspection of the home to find out if there are issues with its construction or maintenance. Inspectors can tell you about radon levels, the condition of the sewer, the function of your appliances and key systems like HVAC, and much more. Depending on their findings, you can negotiate with the seller to address any issues.
Once the inspection is resolved, your lender will work to get everything in order to finalize your mortgage. Usually, you’ll close on your new home about thirty days after your accepted offer, give or take a week or two. Your Realtor will walk through the home with you one final time before you close to make sure the condition is still as expected and all agreed inspection items have been addressed.
After you close, the home is officially yours! You can start the move-in process as soon as you’d like once all documents are signed.
Buying a house in Colorado is a many-phased journey, but it’s absolutely worth it! With a straightforward plan and a team of experienced professionals at your side, you can make a Colorado house your new home.
We’d love to be a part of your next steps as a Colorado homeowner! Our many years of experience and our deep familiarity with the entire Front Range prepare us to guide you through the Colorado home buying process with your personal goals and priorities top of mind. Whether you’ve just got a question about the process or you’re ready to set up that home search, don’t hesitate to give us a ring at 719-337-7254 or 720-498-9592.
