BUYER'S GUIDE     

GET PRE-APPROVED BEFORE YOU START SHOPPING

Meet with a lender to determine the max loan amount you are approved for before you start touring homes. You don't want to find your dream home, only to not be in a position to make a strong offer and move forward! You'll need W-2s, pay stubs, bank statements, and tax returns to get started.

DEFINE WANTS, NEEDS, AND NEIGHBORHOODS YOU LOVE

Consider your most important qualities, styles, and locations and share these with your Broker. Are any negotiable? Are any absolute? Visit new neighborhoods on different days and times to get a true feel for the community's energy.  Explore the Denver Metro region here.

CONNECT WITH A BROKER TO SET UP STREAMLINED, AUTOMATED SEARCHES

A Broker is a trusted resource for all of your questions and acts as a fierce advocate for your best interests. Take time to choose the best fit when starting your home-buying adventure. Best of all, when you are the buyer, having a Broker represent you is FREE! 

The Compass Collections tool allows you to compare multiple properties within a central visual workspace. We can monitor market activity in real-time, stay in consistent communication, share feedback about new listings, and even invite collaborators to join in.

Ready to see a listing you're interested in? Simply download the Compass app on Android and Apple devices and request a tour instantly from your personal collection. It's time to start house hunting and thinking about your next steps!

THINGS YOU SHOULD DO

Save and submit all future pay stubs

Save and submit all future bank statements

Keep copies of all documents submitted

Continue to pay all debts/loans on time

THINGS TO AVOID

Don't make any cash deposits

No large purchases on your credit cards

Don't co-sign a loan for anyone

Don't change bank accounts

Don't apply for new credit cards or loans

Important Terms For Buyers To Know

APPRAISAL
Assessment of the property’s market value by a licensed appraiser, for the purpose of obtaining a mortgage. If the appraisal comes back less than what your lender has pre-qualified you for, you will be responsible for the gap between the list price and appraisal amount, or the appraisal gap.

CLOSING COSTS
Expenses during the sale, such as loan fees, appraisal fees, and title insurance.

CLOSING STATEMENT
The statement detailing the buyer and seller costs and financial settlement.

CONTINGENCY
Certain criteria need to be met in order to finalize the sale, such as inspection, appraisal, financing, and sale of another home.

EARNEST MONEY DEPOSIT
A good faith deposit by the buyer to show that they are serious about buying the property. In exchange, the seller agrees to stop marketing the property.

LIEN SEARCH
A background check on the property and the seller to ensure there are no outstanding debts or claims upon the property.

PRE-QUALIFIED & PRE-APPROVED
Pre-qualification means the mortgage lender has reviewed the financial information provided and believes you will qualify for a loan. Pre-approval is the second step, which is a conditional commitment to loan you the money for a mortgage. A pre-qualified buyer doesn’t carry the same weight as a pre-approved buyer, who has been more thoroughly investigated.

Your Offer Was Accepted—What Comes Next?

1. TITLE REVIEW & EARNEST MONIES

You'll begin by ordering a review from a title company to ensure the seller has a clear title or a legal right to sell their home by searching public records and liens. This cost is included in the overall title company fees, which include their services leading up to and including the closing.

As part of your offer, you likely included an earnest money deposit. If you decide not to go through with the purchase, keep in mind you could lose your earnest money if you back out for a reason not supported in your contract.

3. SCHEDULE YOUR HOME INSPECTION

Order a whole-house inspection with a trusted inspector to ensure you're aware of potential issues. If you have an inspection contingency, be sure to note the date by which you can terminate without losing your earnest monies. You may be able to negotiate repairs with the seller, but any issues found do not impact the appraisal value.

5. LOAN COMMITMENT

Your contract will include a date by which you must produce a letter from your lender indicating their commitment to finance the loan for you. This is different from the pre-approval showing willingness to lend, which is not a firm commitment to lend.

7. SCHEDULE SERVICE TRANSFERS

Notify local utility companies a few days before you take possession so that your home's utilities are on and in your name on closing day. This includes gas, electricity, water, cable, internet, mail delivery, and more. If your new home has a Homeowner’s Association, you’ll need to provide your contact information to them and verify dues schedules at closing. 

9. DO A FINAL WALKTHROUGH

A day or two before closing, you’ll join your broker to complete a final walkthrough of the home you’re buying. This is your last chance to make sure that any agreed-upon repairs have been made and that the house is in the condition you expect. We recommend that you bring a copy of your inspection report and a list of the requested repairs so you can make sure they’ve all been completed. Test all of the home’s systems and any included major appliances to see that they are in working order.

2. SECURING YOUR LENDER

You will submit the executed contract and all financial documentation to your lender. This may happen right after the signed contract, or you may continue to shop around a bit for the best interest rate. No date is required to submit documents to the lender by—provided you have the commitment letter submitted by the date in your contract.

4. ORDER AN APPRAISAL

Once the lender has reviewed your documents, they will contact a third party to hire an appraiser. The appraiser will evaluate the property based on recently sold comparables and like features.  The appraisal can take up to 10 business days to come back to the lender.

If the appraisal comes in above the approved loan amount, the buyer is responsible for the difference,  the appraisal gap, to continue the purchase. 

6. SECURE HOMEOWNER'S INSURANCE

Consider where you will purchase homeowner’s insurance as required by your lender, and shop around for both the best rate and widest coverage.

Title insurance should also be considered. Lender’s title insurance is required to protect the lender’s money invested in the property while optional owner’s title insurance helps verify your claim on the title and ensures that when you purchase a home, that home is yours.

8. REVIEW THE CLOSING STATEMENT

A few days prior to closing, your lender will provide a copy of your closing statement. This details the loan amount, interest rate, fees, services, and any pre-paid items. If you need to bring money to closing, look here to find the amount to arrange the wire transfer or certified check with your financial institution. Contact your lender with questions or if the amounts don’t align with previous estimates and documents.

10. SIGN, SIGN, SIGN!

You’re ready to close! Head to the settlement office with your photo ID, certified check (unless you have wired funds), proof of your homeowner’s insurance, a copy of your closing statement, and any other items your lender or title company has requested. Be prepared to sign your name many times, and don’t be afraid to ask questions along the way.