Colorado Mountain Property and Homes for Sale - A professional header for "code of the west real estate" featuring a stylized mountain range within an oval shape, using a color palette of dark blue, teal, and white.

First Time Home Buyer Tips

First Time Home Buyer Tips

Congratulations! It’s time to buy your first home! You’re tired of paying rent and building your landlord’s wealth and are now ready to invest in your own future. Home buying is both exciting and overwhelming. In this post, we’ll give you some things to consider as you work through the home-buying process.


Check Your Credit Report


A good first step is to check your credit report. You can get a free credit report every year from It pulls info from the three major credit bureaus and provides your credit score (the higher the score, the lower your mortgage loan rate). Even if you’re not buying a home, it’s good to check this regularly because you can monitor items on your report and dispute any errors.


Determine How Much You Can Afford


Use an online mortgage calculator to determine what you can afford. In general, lenders recommend that people look for homes that cost no more than three to five times their annual household income. This amount assumes that home buyers have a 20% down payment and a moderate amount of other debt. Keep in mind that just because you can afford a certain amount doesn’t mean you have to borrow that amount. Finally, look at how much mortgage payments will be depending on your home loan.


Find a Real Estate Agent


Real estate agents are valuable resources—they’re full of knowledge, know the area well, have superior negotiating skills and can answer all of your questions. Plus they don’t cost you anything! Your real estate agent is compensated by the commission from the seller of the house.


Get Prequalified


Getting prequalified allows you to know how much a lender will give you for a home. This info allows you to look for homes in your budget. If you can, you can obtain preapproval prior to looking for houses. Preapproval takes prequalification one step further because the lender verifies your financial documents in advance (W2s, paystubs, bank statements, tax documents, debt-to-income ratio, etc.). Depending on the market, a prequalification or preapproval might be good to do before you browse potential homes.


Find a Home and Make an Offer


Browse homes online to locate what types of homes and areas you like. Start looking at Colorado homes for sale with your agent and find one that you like. Work with your real estate agent to negotiate an offer. Once you and the seller have reached an agreement on the price, the house goes into escrow. Escrow is the period of time it takes to complete all of the remaining steps in the home-buying process (home inspection, loan, appraisal).


Time for a Home Inspection


You’ll arrange a home inspection to look for potential home issues so you’re not surprised after purchasing. Don’t worry, your real estate agent has home inspector recommendations. Most home purchases are contingent on the home inspection so that buyers can renegotiate or back out if there are any major issues. Both you and the seller get a copy of the home inspection report. As the buyer, you can ask the seller to fix items that the home inspector found.


Establish Home Insurance and Set Up Utilities


Your lender requires homeowner’s insurance. You can contact your current insurance agent for an estimate and then also contact other insurance companies for quotes. Once you have a closing date, you can contact utility companies to set up your service (gas, electric, water, trash, Internet, etc.). You don’t want to get the keys to your home and have to move in the dark!


Close on Your Home


Your lender arranges a title company to prepare all the closing paperwork. You’ll sign the closing paperwork including the loan documents. Once the closing is complete and the home loan is funded, it’s time to get the keys to your first home. Then it’s time to move!


If you have any questions about buying your first home, contact us. We’d love to help you through the process and find your first home!