When Shane and Meredith Morris decided they were ready to purchase their first home, they worried that the whole thing—from cost to complications—might be too much. “It was just massively overwhelming, coming out here and seeing the prices. I wondered, would we even be able to afford anything that we actually wanted to purchase?” said Shane. “But our overall experience was much easier than I was expecting.
The Morrises’ trepidations and their ultimate experience aren’t that unusual in today’s fast-paced seller’s market. So long as you’ve got experienced professionals on your side.
The Money
Northern Colorado’s real estate market is slowing its boom, but home prices are continuing to rise, and entry-level properties still move fast. Consequently, first-time buyers’ financial concerns just might be amplified in our current market. But Jason Peifer, Branch Manager of Group Mortgage, says that shouldn’t stop qualified renters from taking the plunge into ownership. “There’s some apprehension because prices are going up,” Peifer said. “But affordability is also an issue for rent… If you’re a renter, you basically have an adjustable rate mortgage because it can go up every year, and I think people don’t recognize or accept that risk.”
Homeownership is, for many, a surprisingly viable alternative to renting in a market like this. Peifer stresses that not only is buying a good way to build net worth, it also increases stability and connectedness to one’s community. For young buyers willing to put in some physical labor, it offers the chance to build sweat equity in a less-than-perfect but in their price-range home.
The Search
First-time homebuyers are often trying to balance work, family and the all-new challenges of finding the perfect property in an affordable price range. This might mean making compromises or changing original intentions. But the process is streamlined by working with a knowledgeable Broker and taking advantage of modern technology.
Though they both grew up in the area, when Andrea and Robert Adams decided it was time to buy, they weren’t sure what they were looking for, or where. “We met with Mary Ann Michels, and she set us up with an email distribution, so we got morning emails of new houses coming up,” said Andrea.
Those regular emails gave the couple a useful tool for sifting through a fast-paced market. “Those emails really helped us understand the areas and what a good price was, what you could get for the locations you’re looking in. And as we made adjustments—we increased the amount and changed the location—Mary Ann changed the email criteria,” said Robert.
Shane also appreciated The Group’s always forward-looking perspective. Not only did he and his wife find the daily emails helped them narrow down their options, as relative newcomers to the region, they also took full advantage of office resources to learn about neighborhood amenities and character.
The Information
But finding a home that’s the right fit isn’t just about identifying the property with your preferred bells and whistles. Navigating the process around making a smart purchase requires working with knowledgeable people along the way to get the most accurate information.
Peifer urges first-timers to start these conversations early. “A lot of people use the wrong source of information. Sure, get some points from your friend who went through it, but the primary source shouldn’t be somebody who went through this just once. Get the information from the professionals, because there’s a lot of information and a lot of misinformation out there,” he said.
Roughly 87% of first-time buyers think they’ll need a 10% down payment, but there’s actually a lot of flexibility in options, from FHA loans that require just 3.5% downpayment and others that don’t have a minimum. “The average [downpayment] is actually 6%,” Peifer said.
The Adamses fretted about having the necessary cash to cover down payment, closing costs, and fees. Sitting down with an advisor from Group Mortgage helped reduce these concerns. “We’re real big math people, and she sat us down and went line by line over every $5 fee and added everything up and made us feel comfortable,” said Andrea.
But it’s not just about getting the right answers. Working with a professional also means asking the right questions. Sometimes ones you didn’t know you had.
Shane and Meredith found that their Real Estate Broker, Paul Schnaitter of The Group, Inc., helped keep things simple. “There were so many questions I had going through inspections and such… I couldn’t have done it without [Paul] because I had no clue what I needed to do,” Shane said. “But he supplied checklists, laid it all out, made my whole life so much easier.”
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