Frequently Asked Questions
Buying a Home
The home buying process consists of eight major steps:
- Deciding to buy
- Securing financing
- Hiring an agent
- Finding a home
- Making an offer or offers
- Perform due diligence (inspection and appraisal)
- Closing by signing the Deed
- Protecting your investment
How much can you afford?
There's a few different ways to figure out what you can afford. To start, try our free mortage calculator tool.
Another great option is to talk to us. We can help you find a lender or mortgage broker to figure out what you will be pre-approved for. Keep in mind the 28/36 rule. This means spend less than 28% of your gross income on monthly housing costs and 36% on total debt including things like car loans or credit card payments.
How to pick what neighborhood you want to live in?
The first step to picking a neighborhood is knowing what you're looking for. You might have to compromise on some things so put what's non negotiable at the top of your wish list. Some things you might want to consider are schools, length of commute to your work, can you walk places from there, is it a noisy neighborhood? Once you've picked your criteria, do some research on various neighborhoods. We can help you figure out what neighborhoods suit your needs.
After you find some neighborhoods that interest you, look into things like the schools in that area, crime statistics, is it part of a neighborhood association? Feel free to drive through the neighborhoods as well to get a feel what it's like. When driving through, write down your first impressions. Can you picture yourself there? Listen for loud noises like highways and if you see people out, ask them what they think of the area. If you're having trouble don't hesitate to ask us!
What are the benefits of having a Buyer's Agent?
A buyer's agent helps protect your interests every step of the way. They'll instruct you on the process, help you identify and tour properties that fit your needs and budget to match you with the right home, then they will prepare and submit an offer on your behalf and negotiate the contract terms. They will walk you through the steps and take care of all dates and deadlines for you to reach closing. Our buyer's agents will also stay in touch with you after the closing to make sure you are doing well and be a resource for plumbers, roofers, heaters, and whatever else you might need.
Is an older home as valuable as a new home?
Both older and new homes have their benefits. Depending on what you're looking for, one may be better suited for you. If you're looking for something with a lot of charm, in an established neighborhood, with a negotiable price point an older home may be appealing. New homes will have modern upgrades can have higher energy efficiency, have cheaper maintenance and operation, and offer extended warranties. Depending on where you would like to live, one might work better for you and your needs. Your real estate agent can show you both if you're not entirely sure what you like more and explain the advantages of each.
What should you look for and ask about when looking at a house?
Before looking at a house know what your deal breakers are and make sure you keep your motivations for moving in mind. If you're moving so you have more space, make sure the house offers that. Once you arrive at the house pay attention to the layout and location of rooms, condition of kitchens and baths being to your standards, and also bring your list of needs, wants, and don't wants. Some more to be aware of is if your car and toys can fit in the garage, what the floors are made of, are kitchen appliances up to date, etc. Our experienced agents will familiarize themselves with the home and MLS information before you even walk in so most of your important questions can be answered.
What is involved in an inspection and appraisal?
A home inspector will carefully look at all the home's systems and structure to point out possible issues that might need updating or repair. They will check the home's foundation, all the exterior and interior features, and the roofing, electrical, plumbing, cooling, and heating systems. You can attend the home inspection so you get more familiar with the property. After the inspection you will get a report on the condition of the home and you can choose from there whether you want to ask the seller to make repairs or not. This is a negotiable part of the process and the seller might or might not be willing to make your requested repairs.
An appraisal will identify the market value of the property you are purchasing. The main aspects of an appraisal are an appraiser's inspection and the comparable properties in the area. These two things will help make the final appraisal report.
Among other things, an appraiser's inspection includes confirming the square footage, number of bedrooms and bathrooms, and to look for obvious damage and upgrades. Your appraisal report will provide the value of the home and, depending on the outcome, this is also a negotiable part of the buying process.
Is buying a better choice than renting?
Renting offers flexibility and if you're not sure where your career will take you, or if you are not financially ready to buy a home it can be a good option. However, there are numerous benefits to buying a home. Owning a house helps you acquire equity. Homeowners generally qualify for a deduction on their taxes. In a growing city like Denver, the value of the home could significantly increase over time. While rental rates will increase over time, homeowners can lock in mortgage rate over the extent of the loan. Of course, the house also belongs to you. This means you can decorate, paint, add additions and renovate the home however you'd like to make it your own. If done correctly, home ownership may help lay the foundation for a life of financial security and personal choice.
What if I am competing against multiple offers to buy a house?
To ensure that your offer on a home is one that will be hard to resist, make sure you have a strong financial package that shows what you're preapproved for. Consider increasing your earnest money amount, being flexible about the closing date or choosy about asking for inspection items. Submit your offer quickly and don't delay on paperwork. One of the many benefits of working with a team like ours, is we have many agents and transaction managers that are experts to help get everything in order and submitted quickly and correctly.
Selling a Home
What do I need to do to prepare my home for sale?
One of the first things you should do when getting ready to sell your home is to talk to a realtor and find out what people buying in your area are looking for. This will help you know where to focus your energy if you need to doing any updating or replacing of systems and appliances. Consider hiring a stager (BPG provides a complimentary two-hour consultation with one) to make sure all clutter is removed and the furniture is arranged well. Clean everything from the top of your refrigerator to the grout in your bathrooms. Make sure all odors are removed. Clean up any clutter, including the floors of your closet. Keep decorations simple and impersonal. You want to make sure buyers can envision your home as their own. Make your house light by opening up windows and making sure no light bulbs are burnt out. Check out the outside of your house as well, make sure it has great curb appeal in any season by trimming the bushes and adding flowers, shoveling all snow, and possibly painting your front door. We always recommend a new colorful doormat as well. That first impression will stick with buyers. For more tips on how to prepare your home talk to us.
How do I pick the right person to list my home?
With so many listing agents it can be hard to pick the right one. You might be thinking of the one with the lowest commission or who agrees with the price you think is right. While these both might be enticing, you get what you pay for. Listing your price at the wrong point might turn off qualified buyers and picking the agent with the lowest commission might mean they have less money to properly market your home. Some tips for finding the right agent are checking references. A great listing agent will be proud to show off the work they've done. There are also benefits to working with a well-established company. Here at Bogar Pilkington we work as a team to maximize our efforts. Among your dedicated Listing Agent who will guide the process, we have a full-time Marketing Manager who will focus on marketing your home online and in print to gain maximum exposure, a team of buyer's agents to help show your home to qualified buyers, a transaction manager to ensure everything runs smoothly and all your questions are answered, a field representative who will install signs and your lock box and check on your property if it is vacant.
How will my home be marketed?
Specific marketing activities to sell your home begin the moment you sign the Listing Agreement. From installing the “For Sale” sign to Internet marketing, we are constantly working to sell your home. Our proven marketing plan is designed to expose your home to as many potential purchasers as possible – making them aware of the key selling features and benefits of YOUR home. First, we make sure you home looks its best with staging and the highest quality HDR photos. Once listed, we will start our 21-Point Marketing System which includes: preferred listing status on Zillow and Trulia, your home's online listing syndicated to over 1,000 websites, direct marketing to all agents in Denver, printed brochures, your home advertised on Facebook, as well as posted on Twitter, Pinterest, LinkedIn, Craigslist, and other social media sites. Schedule an appointment with us to learn more ways in which we make sure qualified buyers find your home.
How do I pick the right price?
Setting the right price for your house when you list it will help you from having to settle or do price reductions. The faster it sells the higher on average you'll get. The longer your house stays on the market, the less you'll get. A listing agent can help you come up with the right price based on a comparative market analysis. The right realtor will be able to factor in many considerations like market conditions, your home's condition, comparable homes, and what buyers are looking for to help make sure you have the right price.
What home improvements should I consider?
Home improvements that are essential to the operation and safety of the house are more important than cosmetic changes. If the roof is leaking, furnace needs servicing, or pipes are broken, it's going to be much harder to sell. While these practical improvements aren't as fun as a new countertop, they'll have a greater return. If all systems are being maintained well, consider updating your kitchen and bathrooms to get the most return. Depending on the area you live in, people might be looking for different things. Ask your listing agent what they think will add the most value to your specific home.
When is the best time to sell my house?
Any time of year can be a great time to sell if you market your house accordingly. If you're ready to sell your house in the fall, make sure your heating systems are working well and leaves are raked up. If it's winter, making your home warm and cozy will help it sell. Of course Spring and Summer are popular times to sell homes since kids are getting out of school and the weather is nicer for moving. It is important to always have great curb appeal no matter the season. Consider the current market as well. Are interest rates rising? That might push qualified buyers now out of the running for your home. Our listing agents will have advice to make sure your home sells when you need it to.
Investing in Real Estate
What is an investment property?
An investment property is a property you own that is not your primary residence that you purchased or is used to generate income, profit from appreciation, or to take advantage of certain tax benefits. It could be a rental property, vacation rental, commercial property, or a property you purchased to flip.
How much risk is involved?
The amount of risk involved in an investment property is relatively low since the real estate market has a stable demand. With that, there are still risks involved. The tenants you rent to pose risks, the market may dip, the maintenance on the house may be costly, and the location of the property may decrease in value. Click here to read an article regarding the risks of real estate investments.
How much money do I need to invest?
A real estate investment can help with long term financial goals but in the short term, don't bite off more than you can chew. First calculate how much of your current income you could live comfortably without. When deciding how much money you can invest, consider your total debt, mortgage payments, car payments, health care expenses, and all your savings accounts. If this is your first investment it's a good idea to reach out to an experienced agent on our team who can offer advice. Call 303-459-6156 to be put in touch with someone who can guide you.
What are the benefits of investing in real estate?
One clear benefit of investing in real estate is the potential for extra income, compared to stocks and bonds there's less increases and decreases in the investments value. The government also offers tax breaks to rental property owners. You can have tenants pay your mortgage, while paying off the house real estate value's increasing, and you can control how much money you put into it.
What are the disadvantages of investing in real estate?
If it's your first time investing in real estate it can be overwhelming. There are a lot of legalities that go into investments that can be confusing to investors. Also keeping up with maintenance on the property can be timely and costly.
What is a “Fix and Flip” Property?
A Fix and Flip property is one that you buy with the plan to renovate and sell it for a profit. These homes are often have deferred maintenance or major issues and are bought for a bargain. The investor chooses projects that will add value to the home and then resells it.
General Real Estate Terms and Concepts
What is Earnest Money?
Earnest money is a deposit to let the homeowner know you're really interested and committed to buying their home. If your offer is accepted, the earnest money will go toward your closing costs and down payment. If you're wondering how much earnest money you should pay, the average buyer pays 1-2% of the total price of the home. Check with your real estate agent to see what the minimum earnest money amount is required for the home you are wanting to buy.
What is a Lender Letter?
A lender letter is a pre-qualification or pre-approval letter from your lender. This is important to get before you start home shopping, because it is required to submit when placing an offer on a home. The lender letter states the amount the lender thinks you'll be able to borrow for the mortgage based on your income and credit profile.
What is a short sale?
A short sale means the owner of the home is selling for less than they owe on their home and therefore lender won't get all their money back. This may be because the home decreased in value. While you can get a good deal on a short sale property, make sure you don't get carried away and ignore potential problems. If you're considering a short sale, call us and we can advise you on what to look for.
What is the MLS?
MLS stands for multiple listing service. This allows real estate brokers to make your transaction more efficient. If your agent belongs to the MLS, they are allowed to input homes for sale into the system. Then, they can pull accurate comparables for people looking to list their home and set buyers up on searches so they are notified when a home that fits their criteria goes on the market. There is a real estate agent MLS with access to view all properties and change their own listings, and a public MLS for people to search. In the Denver Metro Area, the public MLS is REColorado.
What's the difference between being pre-approved and pre-qualified with a Lender?
To put it simply, a prequalification is a conversation where the lender learns more about your financial situation and a preapproval is a confirmation that you can afford up to a certain amount on a house. A prequalification takes an overall look at your finances and credit but does not verify any of the information you supply. Getting preapproved is a more rigorous process that requires many financial documents, but will help you in the long run for making a strong offer and getting to closing.
What are closing costs?
A buyer takes over the title to a property at the closing. Closing costs can range anywhere from 2-5% of the total cost to buy the home. The charges that may be included are lender fees, the appraisal fee, title insurance, title search fees, underwriting fees, and property taxes. Your lender will provide you with a detailed Closing Disclosure at least three days before your closing is scheduled.
An estimate of real estate value, usually issued to standards of FHA, VA, and FNMA. Your lender will order an appraiser to go out to the home you are under contract on and use recent comparable sales in the neighborhood, square footage, and improvements to determine value. Sometimes it is worthwhile to have an appraisal on your home before putting it on the market to make sure it is priced correctly.
An increase in value of a property due to changes in market conditions or other causes such as improvements.
Bill of Sale
Document used to transfer title (ownership) of personal property.
Cloud on Title
Any condition that affects the clear title to real property. This could be an old mortgage with no recording it was paid off, a failure to properly transfer all interests in the property, and/or a lien or judgement that will need to be cleared before purchase. A cloud would be discovered during the title search which begins after you go under contract.
Anything of value to induce another to enter into a contract, i.e. money, services, or a promise.
A written instrument, which when properly executed and delivered, conveys title to real property.
The right to use the land of another.
Anything that burdens (limits) the title to property, such as a lien, easement, or restriction of any kind.
The value of real estate over and above the liens against it. It is obtained by subtracting the total liens from the value.
That portion of a mortgagor's monthly payment held in trust by the lender to pay for taxes, hazard insurance, and other items as they become due.
Federal Housing Administration (FHA)
An agency of the U.S. Department of Housing and Urban Development (HUD). Its main activity is the insuring of residential mortgage loans made by private lenders. The FHA sets standards for construction and underwriting but does not lend money or plan or construct housing.
Procedure whereby property pledged as security for a debt is sold to pay the debt in the event of default.
A legal document that pledges a property to the lender as security for payment of a debt.
Ownership by one person only.
Tenants in Common
Ownership by two or more persons who hold an undivided interest without right of survivorship. (In event of death or one owner, their share will pass to their heirs if they have heirs).
An insurance policy that protects the insured (buyer or lender) against loss arising from defects in the title.