5 Classic Home Buying Mistakes Millennials Make

New generation…same old financial mistakes. But it doesn’t have to be that way! Chances are good, your parents didn’t take you and your siblings aside to share the finer details of the sale or purchase of your family home when you were growing up. Hey — I get it! Mortgage terms and price-per-square-foot are details lost on adolescent minds, but now that you are ready for #adulting, it’s time to figure out how this stuff works so you can do your home purchase right. Here are 5 mistakes home buyers often make — but you can avoid!

Starting your home search before pre-qualifying for a mortgage. You check your bank balance before hitting the grocery store, right? Don’t go shopping for a home before you’ve lined up home financing. And not a guesstimate, but an official letter from a mortgage company stating your qualification to purchase a home up to $XX with XYZ terms. Don’t fall in love with a house you can’t afford, or a house you’ll lose out on to another buyer because your financing isn’t in place yet.

Shopping without a list. If you had all the time and money in the world, you could shop and shop (and shop) for your home, and wait until you find the perfect home before making an offer. In the real world, there is probably competition in the marketplace, and you should shop with a top 5 list of non-negotiable wants and needs, including factors like the number of bedrooms and/or bathrooms, square footage, location, lot size, car storage, and possibly amenities like a gourmet kitchen, finished basement or fireplace.

Buying for right now — without thinking about 3-5-7 years from now. When you are ready take your first steps as a homeowner, think beyond your housing needs this month, this year, or even next year. Ideally, you’ll purchase a home you are likely to be happy in for 5+ years. Circumstances may change, and you might move on from this home before 5 or more years have passed, but you want to buy a home to suit your needs long enough that you’ll be able to gain equity over time, and if you buy a home and end up selling it a couple of years down the road, you may miss out on the maximum equity potential of the property.

Overbuying. You might qualify for a $450k mortgage, but does that mean you should buy a house for that amount? Not necessarily. Buy the best house you can afford, that will put you at a monthly payment you are comfortable with. Don’t max out your home purchase just to spend; max out your checklist items and the long term potential of your home purchase, and make sure you leave enough wiggle room in your ongoing budget to make the updates you want to in your new home, too.

Underbuying. By the same token, if you qualify for the same $450k and buy a lackluster 1 bedroom condo in a so-so neighborhood out of fear — you are selling yourself (or is that buying yourself…) short. Run the numbers, and certainly don’t set yourself up for failure a year or two from now if you can’t pay the monthly mortgage, but if you are too conservative in your purchase, the tiny pad you buy now might not meet your needs 2-3 years down the road, and you won’t have had time to build much equity in the property before it’s time to sell and move onward and upward.

Are you looking for a guide to help you find a great deal on the right home for you? I’ve been in the Denver Real Estate game for over 20 years, and I’m here to help. Drop me a line to let me know how I can make your home purchase plans a reality.

Jack Meyers
jackestate@aol.com
303.263.3050
Twitter: @jackestate

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Lowest Inventory in the History of Ever

According to statistics compiled by the Denver Metro Association of Realtors (DMAR), the inventory of available homes in Metro Denver hit an all-time record low since the numbers have been tracked. 

This is great news for Sellers! People want to live in and around Denver, they’re willing to pay a premium to do so, and there aren’t enough houses, townhomes or condos to go around. It’s called a Sellers Market for a reason: the odds are in your favor, and this is an excellent time to maximize your homes potential and gain a return on your investment by selling your property, if you are in a position to do so.

The hot market we’re in right now is challenging for Buyers. Prices are strong. Inventory is low. Interest rates are on the rise. Factors like rising interest rates will eventually put a dent in the insane level of demand in our area because as financing becomes more expensive, fewer buyers will enter the marketplace. In the meantime though, if you are a buyer in the Metro Denver housing market, you need to do everything in your power to give yourself an edge.

Here are a few tips savvy Metro Denver Buyers can use to win at the game: 

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Secure financing first. Don’t begin the hunt until you are fully approved for a loan, and don’t wait to apply. If you want to move in 6-12 months, apply for financing now.

Know your timeline. If you want to move in a year, don’t assume you can wait 10 months to begin your home search. Even if the market cools a bit as the Fed raises rates, Denver will likely still be hopping in a year. Plan for the possibility you’ll be searching for a home for several months, and don’t put off the process until the moment you want or need to move.

Don’t go it alone. Unless you are an expert negotiator and familiar with the ins and outs of real estate contract law, seek expert representation to secure a legal, smooth-as-possible transaction. Things move quickly in a market like this, and if you aren’t prepared, you’ll lose out and possibly hit legal snafus along the way. Work with an experienced real estate professional to avoid pitfalls.

Whittle down your must-haves. Wouldn’t it be nice if your next house had freshly painted walls, beautiful hardwood floors, newer appliances (included, of course) and stylish high end draperies in every room? In a Sellers Market, you may have to give up on some of your wishes and hopes in order to snag a deal. You can paint, upgrade the flooring or appliances and install fancy curtains later; if you aren’t able to successfully close on a house, none of those details will matter. Choose 5 absolute must-haves and mentally prepare yourself to look past minor imperfections.

Steel yourself – there will be disappointment along the way. The reality of a competitive real estate marketplace is this: you will likely make offers (notice I said offers – plural) that are ignored completely or rejected. You may come back with a higher/better offer on a house you love and be rejected a second time. It will probably bum you out every single time – at least a little. The key is not to let yourself fall in love on the first date. Not even once you are under contract – because sometimes contracts fall through. The time to really let loose with a victorious hoot-holler-we-did-it victory dance is the moment you walk away from the closing table with keys in hand. That’s when the house is really yours, and that’s when to breathe a sigh of relief and start dreaming big dreams about your new digs.

Are you thinking about selling, and wondering if it’s worth your while? Thinking about moving closer to work, into the city, or further out into Suburbia?

Call me or drop me a line in email. I’ve been helping people buy and sell homes across Denver for over 20 years, and I’d love to help you make your next move.

Jack Meyers

The Meyers Group
jackestate@aol.com
303.263.3050
Twitter: @jackestate