If you’ve already ventured out into the red-hot world of Denver residential real estate, you know buying a home in this molten market isn’t as easy as walking into a showing and shouting “I’ll take it!”
Conversely, there is a perception out there that all it takes to sell a home a mile above sea level is putting a for sale sign in the yard and sitting back while a bidding war ensues. Maybe closer to reality, but not the wisest way to go about it if you want the best results.
We talked to Realtors, loan originators and nonprofit home-buyer educators about the best strategies for people on both sides of the home sale transaction. Below are five tips for homebuyers — and five for home sellers — for how best to navigate the choppy seas of a residential real estate market featuring epic demand and low, low inventory.
Homebuyers
1) Research the process
Just because you think you’re ready to buy a home doesn’t mean you are. Seek out and attend a free home buyer education class. Interview multiple Realtors and lenders about your prospects and what they can do for you before deciding on one. This could be the biggest purchase of your life. Go into it with as much knowledge as possible.
2) Get pre-approved for your home loan
It’s not enough to identify a lender you want to work with. You need to sit down, get on the phone with or email one who can tell you the kind of loan you can qualify for and how interest rates and rising prices impact what you can buy. Provide all the necessary documentation to get a pre-approval letter or your house hunt may stall on the runway.
“I recommend my clients do everything humanly possible with their lenders,” Realtor Matt Leprino said. “I say don’t even go out in the car to look at houses before you do that.”
3) Look below your price range
Demand is driving prices up. That’s a fact of the Denver housing market at both the macro and micro levels. Leprino tells his clients to set their price range and start looking at homes at least $25,000 under that. There will be competition, and odds are you will have to bump up your offer.
4) Temper your expectations
Even in a less competitive housing market, your dream home isn’t always sitting out there just waiting for you to waltz in the door. Be realistic about what you want and what you can live without. Local Realtor Justin Knoll recommends buyers employ an “80 percent rule.”
“If you can get 80 percent of what you want in a house, do the deal,” Knoll wrote in an email. “Buyers are not going to get 100 percent of what they want.”
5) Be prepared to get creative
Even the best-prepared buyer can be outdone. Cash offers, people willing to waive inspections; there are all kinds of ways to be beaten out. So be prepared to go above and beyond — in a smart way — when making an offer. Leprino has heard of people who pre-schedule a home inspection, sending the message to the seller that they really want this home and are prepared to move the sale along quickly. Other eager buyers have volunteered to pay for the title insurance policy — customarily paid for by the seller — as a means to get a leg up on their competition.
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Home sellers
1) Knock out that to-do list
Just about every homeowner has one: A to-do list of simple repairs they have been putting off. Retouching the paint in the hall, addressing the drippy sink. Knock these tasks out before putting your home on the market. Top products sell for top prices and there will be less to quibble over at inspection time. If you’re really serious about getting a top price, order a pre-inspection of your own and address those issues.
2) Pay attention to the presentation
Just because the market is tight, doesn’t mean you can let your house become a pig sty and expect buyers to fall over themselves to make an offer. Keep your house clean for showings. Online presentation matters, too. Make sure you or your Realtor have professional quality photos shot for use on listing websites.
3) Have a pricing strategy
With prices going up and up and up it can be tempting to put a big number outside your home and see if people will meet it. That’s not always the wisest strategy. Deals can fall apart in all kinds of ways so it benefits a seller to get multiple offers, Leprino notes. Check on recent home sales in your area and set a price that will generate lots of interest.
4) Don’t give in to greed
The highest offer isn’t always the best one. It’s a mantra being repeated by Realtors across metro Denver right now. Take into account all the factors surrounding the sale of your home, not just the sale price. If a buyer is willing to cover the title insurance and give you some extra time to pack up and move, they may be a better fit than someone else who is willing to pay more in total and but is not willing to work with you on those other things.
5) Be patient
Homes are selling fast, no question. But homes sales are complicated transactions with lots of moving parts. Don’t expect to sell your house overnight. Remember, in this market if things don’t work out with one buyer, odds are another one is right around the corner.
