Want to become a homeowner, but struggling to afford Spring home prices in the Denver metro area? You may be in luck. Late Summer and early Fall are prime times to buy a house. There are still plenty of properties on the market, sellers are motivated, and there is less competition.
Sound too good to be true for Denver? It’s not. According to the latest report from the Denver Metro Association of Realtors (DMAR), Denver has a substantial inventory of homes that are staying on the market for longer, meaning buyers are gaining back some power.
Here’s what you need to know before you start your Denver home search.
What motivates sellers?
Selling before the holidays
As you may have guessed, winter is considered the off-season in the real estate world. So sellers will be open-minded to negotiations in the Fall in an attempt to get their house sold before the holidays and winter.
Getting into their new home
There’s a reason why the seller is choosing to move offseason. Maybe they are relocating for a job, or have outgrown their current home. Regardless of why, they likely need to sell quickly so they can make their move to a new home. You may be able to use this to your advantage when negotiating.
What benefits are available to buyers?
The longer a home sits on the market, the less expensive it’s going to be. If a seller lists their home too aggressively, they’ll have to reduce the price.
According to RealtyTrac's analysis of more than 32 million home sales covering 15 years, on average October buyers paid 2.6 percent below estimated market value. For a home that would typically sell for $350,000, 2.6% translates to a savings of $9,100.
Competitive interest rates
When mortgage rates are low, you’re being charged less to borrow money. Even a small difference in rate percentage can mean tens of thousands in overall interest savings. 2019 has already proven to be a great time to buy a house because of the near historic low mortgage rates. Just be sure to shop lenders because what you see quoted online is not necessarily what you’re going to get.
Seasonality is only one factor
Time of year is one of many factors that determine the best time to buy a house in Denver. Don’t forget to consider the following:
Down payment and closing costs
The more you can put down, the lower your housing costs can be. It can take months or years to save for a down payment. Though there are loan options that can get you into a home for little money down.
Borrowers who get an FHA loan need just 3.5 percent down in many cases. VA loans and USDA loans require no down payment. Finally, specific to Colorado, there is a CHFA loan (which stands for Colorado Housing and Finance Authority). CHFA options require as little as $1,000 down payments.
Your credit score
Your mortgage rate is dependent on many factors, and your credit score plays a vital role in determining the rate you receive. A few points difference in your score can significantly help or hinder your monthly mortgage payments. So, do what you can — ahead of time — to strengthen your score before applying for a mortgage.
Your personal situation
The right time to buy is when you’re ready. After all, a home is an investment. You should be financially stable and have the desire to remain in the house for more than just a few years to make it worth your while.
The bottom line
The market can quickly change, so it’s essential to work with a local Realtor to better understand what’s available within your budget. Take it a step further and seek mortgage pre-approval before you start shopping. This way you won’t put yourself at risk of falling in love with a home you can’t afford.