First-Time Homebuyer’s Guide – From Deciding to Buy to Closing Day
Your journey to homeownership starts here. Whether you're dreaming of a cozy retreat in Greenwood Village or a modern townhome near downtown Denver, this step-by-step guide will walk you through every milestone of the homebuying process—from deciding to buy to finally receiving your keys.
So, you’re thinking about buying your first home in Colorado? Congratulations! This is a huge milestone, and we’re here to help make it as smooth as possible. Buying a home in Denver (and the surrounding Greater Denver area) can feel overwhelming for first-timers – but don’t worry. In this friendly, no-jargon guide, we’ll walk you through the entire homebuying journey step by step. From the moment you decide it’s time to stop renting, through finding a Colorado real estate agent, securing financing, house hunting, making an offer, inspections, and all the way to closing day – we’ve got you covered.
Not only will we cover the nuts and bolts, but we’ll also sprinkle in some local insights specific to Colorado and Denver’s real estate practices (like how escrow and closings work here, and Colorado-specific home inspection tips). By the end, you’ll know exactly what to expect and feel confident about the road ahead. Let’s dive into your First-Time Homebuyer’s Guide – Colorado style!
Are You Ready to Become a Homeowner?
Step 1: Deciding to Buy
Taking the leap from renting to owning is a big decision. It’s normal to have some fears, like “Can I really afford a home?” or “Is my credit good enough?” However, it’s important to face those fears with facts. Until you do the math, you might be pleasantly surprised what you can afford. If you’re paying rent, you may find that you can afford a mortgage payment in the same range – especially when you factor in the benefits of homeownership.
For example, the tax write-offs from mortgage interest often offset a large portion of the difference between your rent and a mortgage payment. And beyond monthly payments, owning a home is a powerful way to build long-term wealth. In fact, recent data shows the median U.S. homeowner has a net worth of about $396,000, while the median renter’s net worth is only around $10,400. Wow! Homeownership really can be a “forced savings” that grows your wealth over time.
Of course, finances aren’t the only consideration. Ask yourself about your life situation: Are you planning to stay in the Denver area for the next few years? Do you have stable income? Are you ready for the responsibilities (and freedoms!) of owning a home? If you might move away in a year or your job isn’t secure, renting could be better in the short term. But if you’re putting down roots in Colorado, buying a home in Denver or its suburbs can be incredibly rewarding – both personally and financially. It’s your place to paint, decorate, renovate, and truly make your own.
Tip: Make a pros and cons list of renting vs. buying for your specific situation. Everyone’s circumstances differ. But if you find yourself leaning towards homeownership, you’re in the right place. Next, we’ll ensure you have the right team and preparation to turn that dream into reality.
Step 2: Finding the Right Colorado Real Estate Agent
One of the smartest moves a first-time buyer can make is partnering with an experienced Colorado real estate agent. Think of your agent as your homebuying coach – an expert who’s firmly in your corner. In Colorado (especially the fast-moving Greater Denver real estate market), having a savvy agent is invaluable. They’ll guide you through the legal, financial, and logistical twists and turns of the process, and help you avoid pitfalls that newbies might not see coming.
A great real estate agent does way more than just unlock doors at showings. Here are some of the key duties a buyer’s agent will handle for you:
Educating you about the market
A local Denver agent knows the neighborhoods, price trends, and insider info. They can tell you if a listing is overpriced or a total steal, and set realistic expectations on timing and competition.
Helping you clarify your needs and wants
Your agent will listen to your wish list and help refine your criteria (more on that in the next section). They might ask questions you hadn’t considered, ensuring you don’t overlook something important.
Finding suitable homes
Agents have access to the MLS (Multiple Listing Service), which is a comprehensive database of homes for sale. They’ll send you listings that fit your criteria and even alert you to new ones before most buyers see them.
Coordinating other professionals
Need a lender for pre-approval? An inspector for the home inspection? A good agent can recommend trusted local professionals (lenders, home inspectors, title companies, etc.) and coordinate timing so everything stays on track.
Negotiating on your behalf
When it’s time to make offers or request repairs, your agent is your skilled negotiator. They’ll represent your interests and try to get you the best deal and terms.
Managing paperwork and deadlines
Real estate transactions involve lots of paperwork and strict deadlines (offer deadlines, inspection objection, loan approval, etc.). Your agent will handle preparing contracts and keep you on schedule so nothing slips through the cracks.
Problem-solving
If any issues arise (and in real estate, something unexpected can always pop up), your agent will help solve them. Whether it’s a title issue or a repair problem, they’ve likely seen it before and know how to navigate it.
We Are Your Local Ally
All of that is to say: a good agent is worth their weight in gold! Take the time to find someone you trust and connect with. Interview agents and ask questions to gauge their experience and style. For example, you might ask: “Why did you become a real estate agent?”, “How will you help me find the right home for my needs?” or “What sets you apart from other agents?”. You want someone who is not only knowledgeable, but also patient and approachable – someone you feel comfortable asking any question (because there are no silly questions in this process, truly).
If you’re not sure where to start, feel free to reach out to our team at Sonder Mountain Real Estate. We’re based here in the Denver area and love guiding first-time homebuyers. We’re happy to chat and answer questions – no strings attached. The goal is to make you feel supported from day one.
Step 3: Securing Financing – Loans, Pre-Approvals, and Budgeting for Your First Home
Pro Tip
While you’re home shopping, avoid making big changes to your finances. Don’t switch jobs, don’t make any large purchases on credit (hold off on buying that new car or fancy furniture until after closing!), and don’t open or close credit accounts. The lender will re-verify your credit and employment before closing, and you don’t want any surprise issues. Basically, keep your financial situation as boringly stable as possible until you’ve got the keys in hand.
Unless you’re one of the rare folks buying a home with cash, you’ll need to secure a mortgage loan. Getting your financing lined up early is crucial – ideally before you start seriously house hunting. Why? Two big reasons: (1) You need to know how much home you can afford, and (2) sellers (and your agent) will want to see a pre-approval letter from a lender to know you’re a qualified buyer. In a competitive Denver market, having that pre-approval in hand is almost mandatory when you make an offer.
Here’s how to get started on the financing front:
Check your credit and finances
Pull your credit report (you can do this for free) and see where you stand. Lenders typically look for a credit score of 620 or higher for many loan programs (some FHA loans can go lower). If your score needs a boost, now’s the time to clean up any errors on your report or pay down debts. Also take stock of your savings – you’ll need money for a down payment and closing costs (more on those in a second).
Learn about mortgage options
There are various types of mortgage loans for first-time homebuyers in Colorado. The most common are conventional loans, which often require 5% down or more, and FHA loans (backed by the Federal Housing Administration) which require as little as 3.5% down and can be more forgiving on credit score. If you’re a veteran or active military, a VA loan could allow zero down payment. And some areas outside the city may qualify for USDA loans (also zero down) if they’re in rural zones. Each loan type has pros and cons (for instance, FHA allows a small down payment but comes with mortgage insurance premiums). A good lender can walk you through what you qualify for and what fits your budget.
Down payments & assistance programs
You might have heard you need 20% down – but that’s actually a myth. While putting 20% down lets you avoid private mortgage insurance (PMI), it’s not a requirement. Many first-time buyers put down 5-10%, or even as low as 3% with certain programs. In Colorado, we’re fortunate to have resources like the Colorado Housing and Finance Authority (CHFA) which offers down payment assistance for first-time buyers. For example, CHFA provides grants up to 3% of the mortgage amount that never have to be repaidthemortgagereports.com! That could be like getting a free ~$12,000 toward your down payment on a $400k home. They also offer second-mortgage loans for down payment help and various special programs for veterans or buyers with disabilities. Beyond CHFA, some local counties or cities have first-time buyer grants or forgivable loans, and organizations like the Colorado Housing Assistance Corporation (CHAC) or the Metro DPA program might help with down payments or closing costs. It’s worth asking your lender or agent about these options – it could make buying much more affordable. (Usually these programs have income and price limits and often require a homebuyer education class, but the extra funding can be a game-changer.)
Get pre-approved
This involves choosing a lender (this can be a bank, credit union, or mortgage broker) and submitting a mortgage application. The lender will ask for documents like pay stubs, W-2s, bank statements, etc. They’ll check your credit and verify your income and assets. If all looks good, they will issue a pre-approval letter stating how much you can borrow. This letter shows sellers you’re serious and qualified. Be aware the lender will also tell you your estimated monthly payment for that amount, including principal, interest, taxes, and insurance (often abbreviated PITI). Make sure you’re comfortable with that monthly number – you don’t have to max out what the lender says you qualify for. It’s wise to set a home price budget that leaves you some breathing room each month.
Budget for closing costs
Besides the down payment, remember there will be closing costs (the fees for things like the appraisal, title insurance, lender fees, etc.). These typically run about 2-5% of the purchase price. So on a $400k house, closing costs might be around $8k–$20k. Sometimes you can negotiate for the seller to cover a portion of closing costs (particularly if the market is more buyer-friendly), but in a hot Denver real estate market, many first-time buyers should plan to cover these. Your lender’s pre-approval will usually outline an estimate of required cash to close. It’s better to have a little more saved up than needed, just in case.
By the end of this step, you should have a clear idea of your price range and have that golden pre-approval letter in hand. (It will specify something like “Buyer is approved for up to $X purchase price” or loan amount, often with a specific loan type.) Now you’re ready for the fun part – house hunting – with confidence about what you can afford.
Local Insight
In the Greater Denver real estate market, certain features might cost more or be harder to find in your price range. For example, if you dream of a big yard, you might get more for your money in suburban areas like Parker or Broomfield versus trying to get a large lot in central Denver. Likewise, if you want walkability and nightlife at your doorstep, you may need to trade off some space or pay a bit more for a downtown condo. Your agent can provide perspective: “Homes with mountain views in this area tend to start at $X” or “Homes in this school district get multiple offers quickly, so be prepared to move fast.” Use their knowledge to refine your expectations.
Take your time with this step. It’s much easier to target your home search once you have a clear picture of what you’re looking for. And remember, sometimes your criteria may evolve once you start seeing homes – that’s okay too. You might realize a two-car garage isn’t as important as you thought, or conversely, visiting homes might reveal a new must-have. Stay flexible and communicative with your agent about any changes to your wish list.
Step 4: Identifying Your Home Criteria – What Does Your Colorado Dream Home Look Like?
With an agent on your side and a budget in mind, you can start thinking about what kind of home you want. This step is all about identifying your home criteria – essentially, your “must-haves” and “nice-to-haves.” It’s time to dream a little, but also be practical about your needs.
Sit down (ideally with your agent, and maybe any co-buyer like a spouse/partner if applicable) and make a list of what you’re looking for. Ask yourself questions like:
Location
What neighborhoods or areas do I want to live in? Do I need to be close to work, good schools, public transit, or other amenities? For example, maybe you love the vibe of Denver’s LoDo or RiNo neighborhoods, or perhaps a quieter suburb like Littleton or Aurora is more your speed. Think about commute times and lifestyle. Do you prefer an urban setting or more space in the suburbs? Colorado’s Front Range has a lot of variety – from downtown condos to family homes in communities like Lakewood or Highlands Ranch.
Type of home
Am I looking for a single-family house with a yard? A townhouse or condo with lower maintenance? Perhaps a duplex or multi-family if I’m open to a house-hacking or real estate investing Colorado strategy (renting out part of the home)? Each has pros/cons. For instance, condos/townhomes often have HOA fees but less upkeep. Single-family homes give more privacy and land.
Size and layout
How many bedrooms and bathrooms do I need versus want? (If you’re planning to grow your family or need a home office, factor that in.) How much square footage is ideal? Do you need a garage (important for those snowy Colorado winters!), a basement, a big yard, etc.? Maybe you’re okay with a smaller cozy bungalow, or maybe you know you need at least 1,500 sq ft to feel comfortable.
Features and condition
Are you looking for a move-in ready home or are you open to a fixer-upper (perhaps one you can renovate over time to build equity)? Some first-time buyers want something turnkey; others are handy or adventurous enough to buy a home that needs a little TLC at a lower price. Also, what features are non-negotiable? For example, “I must have AC” (some older Denver homes lack central air – but swamp coolers or minisplits exist), or “I really want a big backyard for my dogs,” or “A modern kitchen would be nice but I can always update later.” List your top few priorities.
Style and preferences
Do you love historic Victorians with character, or prefer a newer build with the latest smart-home tech? Is a certain architectural style calling your name (Craftsman, mid-century modern, etc.)? Would you be interested in a condo in a high-rise with mountain views, or is a quiet cul-de-sac more appealing? This is more about personal taste, but it helps your agent zero in on the right vibe.
It can also help to rank your criteria by importance. Maybe being in a certain location or school district is your #1, whereas having a fourth bedroom is lower priority and something you could sacrifice if everything else is great. It’s rare to get every single item on your wish list (especially on a first home and within a budget), so know what you’re willing to compromise on. As a common saying goes, “The right home will meet all of your needs and as many of your wants as possible.” Focus on the essentials first.
If you’re buying with a partner, be sure to discuss these items together and get on the same page. It’s not uncommon for couples to have slightly different visions (maybe one person prioritizes a big kitchen while the other cares more about location). Your agent can help mediate and find a happy middle ground once they know what matters to each of you.
Step 5: House Hunting in Denver – Searching for Your Home Sweet Home
Local market context
In Greater Denver, understand that competition can be fierce for desirable homes. It’s not uncommon in recent years for well-priced homes in good condition to get multiple offers. This means you might not win the first offer you make. That’s okay and happens to many first-time buyers. We’ll talk strategy on offers next, but mentally prepare that the process can have ups and downs. If you miss out on a house, try to see it as, “It wasn’t meant to be – something better will come.” The right home is out there, and with patience, it will happen.
Now for the exciting part – house hunting! This is when things get real (and fun). You’ve got your wish list and budget; now you and your agent will hit the market to find that Colorado home that checks the right boxes.
How to find listings
Your agent will set you up with access to the local MLS listings tailored to your criteria. Often, agents have an online portal or will email you new listings. The Denver metro’s MLS is very up-to-date and will include all the homes listed by agents in the area. When a new home that meets your parameters hits the market, you can get an alert so you don’t miss it. Speed matters – in a hot market, the best homes can go under contract in a matter of days (or even hours!). So keep an eye on those notifications and let your agent know ASAP if you see a home you’d like to view.
Don’t just rely on online searching from your couch, though. It’s also a great idea to explore neighborhoods in person. Take some weekend drives or walks in the areas you’re considering. You might stumble on “For Sale” or “Coming Soon” signs that haven’t shown up online yet. Or you may get a feel for the community vibe – maybe you discover a lovely park nearby or notice traffic noise at certain times. House hunting isn’t only about the house; it’s about the surroundings too.
When you go out to tour homes, try to stay organized. After seeing 5, 6, or 10 houses, they can blur together in your mind! Consider taking notes or pictures (your smartphone is handy for this) of each home – jot down pros and cons. Some buyers create a rating system or a checklist to score each property. For example, you could rate each home on a scale of 1-10 on key factors like location, layout, natural light, yard, etc. This will help when it comes time to compare and decide which home might be “the one.” It’s easy to forget details, so writing down “House #3 had that weird smell in the basement” or “House #1 had the huge kitchen island I loved” can be super helpful later.
Also, pay attention to big-ticket items when evaluating a house. Cosmetic things like paint color or ugly carpet are easy to change. But issues with the major systems or structure of the home can be expensive. As you walk through, keep an eye out for any signs of potential problems: e.g. stains on ceilings (could indicate past roof leaks), cracks in the foundation or walls, old electrical panels, etc. Of course, you’ll get a professional inspection later (more on that soon), but it’s good to be observant now. Your agent might also point out red flags. Don’t be afraid to ask, “How old is this roof, roughly?” or “Do you know if there are any disclosures on this house?” Gathering info now can save time pursuing a house that might not be a good choice.
During this phase, it’s normal to see a good number of houses before finding one that feels right. Some buyers luck out and fall in love with the very first home they tour; others may see dozens over a few months. Try not to get discouraged if it takes a while. Inventory (the number of homes on the market) can fluctuate seasonally and by price range. If you’re hunting in the early spring, for instance, you might see more options (since spring is a popular time to list homes in Denver). In mid-winter or around the holidays, choices can be a bit thinner, but you might face less competition too. There’s no perfect time – the key is patience and persistence.
Stay open-minded
You might start with a very specific picture of your dream home, but keep an open mind to possibilities. Sometimes a home you might skip based on online photos ends up surprising you in person (maybe it has an intangible charm or a great feel that pictures didn’t capture). Conversely, a home that looks perfect online might have issues you only notice in person (like a less-than-ideal location next to a busy road). So try to tour a variety of homes, especially early on – even ones that aren’t 100% perfect on paper – just to help refine your preferences.
Alright, suppose after all the searching, you walk into a particular house and something just clicks. The neighborhood feels perfect, the home itself checks nearly all your boxes, and you get that “this is it” feeling. Fantastic! When you’ve found a home you love, it’s time for the next step – making an offer.
Emotional side-note:
It’s easy to get emotionally attached once you’ve made an offer (after all, you’ve mentally started picturing living there). But try to stay slightly detached until you have a signed contract. Anything can happen in negotiation. If it doesn’t work out, don’t give up hope. It might take a few tries to get an accepted offer. Many first-time buyers experience a rejection or loss of a bidding war and later say, “It’s okay, the home I ended up with was even better.” So hang in there!
Step 6: Making an Offer – Crafting a Winning Bid on Your Future Home
You’ve found the house. Now it’s go-time to make an offer and hopefully turn that dream home into yours. This stage can feel high-stakes, but your agent will guide you through it and handle the paperwork. Let’s demystify what goes into an offer in Colorado and how you can put your best foot forward.
What’s in an offer?
In any real estate market, an offer isn’t just about how much money you’re willing to pay. In fact, there are three basic components to any offer:
Price
This is the amount you propose to pay for the home. Coming up with the right price is part art, part science. Your agent will do a Comparative Market Analysis (CMA) by looking at recent sales of similar homes (often called “comps”) to advise you on the home’s fair market value. In a balanced market, you might offer close to the asking price (or a little below if you feel it’s overpriced). In a hot seller’s market, you might need to offer at or even above asking to be competitive. It all depends on the situation – how long the home has been on the market, whether there are other offers, and how it stacks up against those comps. The goal is to pick a price that’s high enough to be accepted, but still within a value range you’re comfortable with. Pro Tip: Decide on your absolute max price before emotions take over. It’s easy to get caught up in bidding wars; having a ceiling in mind prevents regret later.
Terms
The terms cover when and how the deal will happen. This includes the closing date (when you want to finalize the sale and get the keys), any inclusions (are you asking for that nice refrigerator or washer/dryer to stay? In Colorado, many kitchen appliances are typically included, but things like washers/dryers or that hot tub might be negotiable), and who pays for what costs. For example, sometimes a buyer might ask the seller to contribute, say, $5,000 toward closing costs – that’s a term. Or you might propose a longer closing period (maybe 45-60 days) if you need time, or a quick close (around 30 days) if you and your lender are ready to go. Other terms could be things like a rent-back: if the seller needs to stay in the home a bit after closing (common if the seller is also buying a house), you could let them rent it from you for a short period. All these little details can make your offer more or less attractive to the seller. A good agent will communicate with the seller’s agent to understand what terms the seller prefers (for instance, maybe they really want a quick closing), then tailor your offer accordingly.
Contingencies (Conditions)
These are the “ifs” that allow you to back out or renegotiate if something doesn’t go as planned. The common contingencies are inspection, appraisal, and financing. An inspection contingency means you get to do a home inspection and have the right to request repairs or walk away if the home has serious issues (more on inspections in the next section). An appraisal contingency means if the home doesn’t appraise at or above the purchase price, you can reconsider (or renegotiate the price). A financing contingency means if your loan falls through despite your best efforts, you’re not on the hook to buy the house without the loan. In Colorado, offers typically include these contingencies to protect the buyer, but in an ultra-competitive scenario, some buyers might waive one or more contingencies to strengthen their offer. Waiving contingencies is risky – for example, if you waive inspection, you’re accepting the home as-is no matter what – so always discuss the implications with your agent. There are also other contingencies occasionally, like if you have to sell your current home first (though as a first-time buyer, that won’t apply to you, which actually makes your offer stronger since you’re not chained to another sale).
When your agent writes up the offer (in Colorado, this will be done on a standard Colorado Real Estate Commission approved contract form), it will include all the above components. You’ll review and sign the offer, and then your agent will submit it to the seller’s agent. Often, you’ll also include your pre-approval letter (to prove you’re financially qualified) and possibly a personal cover letter to the sellers. Buyer love letters (where you introduce yourself and explain why you love the home) have been common in the past, though in recent times some agents advise against them due to fair housing considerations. Check with your agent on whether a personal letter is recommended or not in your situation.
Strategic Tips
In a multiple-offer situation (which is not uncommon in Denver for hot listings), consider these tactics to make your offer shine:
Offer a strong price right out of the gate if you expect competition. This might even mean offering above the listing price if the comps and your budget support it. Your agent can guide you on a sensible yet competitive number.
Increase earnest money: Earnest money is a deposit you put down (usually a percentage of price, like 1-3%) to show you’re serious. It’s typically held in escrow (often by the title company or listing brokerage) and counts toward your down payment at closing. If you default without a valid reason, the seller can keep it; otherwise it’s returned or applied to price. Offering a higher-than-normal earnest money deposit can signal to the seller that you’re very earnest (pun intended) and confident. In Colorado, once under contract, that earnest money will indeed be deposited into an escrow/trust account until closingkw.com.
Be flexible on timing: If you can accommodate the seller’s ideal closing date or possession date, do it. Maybe the seller wants a quick close because they’re relocating, or maybe they need an extra couple weeks to move out – if you can be amenable, it can give you an edge.
Limit requests: Generally, try not to ask for trivial personal property (like don’t include their patio furniture or something in the offer) and don’t ask for excessive closing costs or warranties unless needed. In a strong seller’s market, cleaner offers (fewer asks) tend to win.
Consider an escalation clause or appraisal gap coverage: These are more advanced strategies. An escalation clause basically says “I’ll pay X amount more than the highest offer up to a cap of $Y.” Appraisal gap coverage means if the appraisal comes in low, you agree to cover a certain amount of the difference out-of-pocket so the deal still goes through. These can make your offer more attractive but be sure you fully understand the financial implications before including them.
Once submitted, one of a few things will happen: the seller might accept your offer as-is (🎉 time to celebrate, you’re under contract!), counteroffer with some changes (like a higher price or different terms), or in some cases, decline or let it expire (if they accepted another offer or didn’t like the terms). Negotiating may go a couple rounds – for example, the seller counters your price, you counter back, etc., until agreement is reached or someone walks away.
This negotiation phase can be nerve-wracking, but remember, your agent is handling the back-and-forth communication. Try to stay responsive – if your agent sends over a counteroffer from the seller, talk it through and reply in a timely manner. Real estate deals often have tight deadlines (the seller’s counter might expire by tomorrow, for instance).
Assuming your offer is accepted – congrats! You’re officially Under Contract. Now the clock starts ticking on the next phase, which is doing your “due diligence” and finalizing the loan so you can get to closing day.
Step 7: Negotiation and Going Under Contract – From Offer Acceptance to Signed Deal
Common Colorado Inspection Topics
Given our Colorado climate and older housing stock in parts of Denver, some common inspection considerations:
Radon: Colorado is known for high radon levels (an odorless gas that can cause lung issues over long exposure). In fact, as many as 50% of homes in Colorado have radon levels above EPA recommendations. It’s wise to do a radon test during inspection. If high levels are found, installing a mitigation system (basically a ventilation system) usually runs ~$800-$1200. Often buyers ask sellers to install a radon mitigation if levels are high, and many sellers will agree because it’s a common health concern locally.
Mold: While Colorado is dry, mold can still crop up, especially if there have been leaks or in moist areas like crawl spaces. If an inspector finds mold, that’s something to address (identify the moisture source and remediate).
Sewer line: Many Denver-area homes (especially older ones in the city) have clay or cast iron sewer lines that can crack or get invaded by tree roots. It’s not part of a standard home inspection, but you can hire a sewer scope company to run a camera down the sewer line. This is often a smart idea for older homes. A sewer replacement can cost $5k-$10k+, so it’s good to know if there’s an issue. If a sewer is in bad shape, that’s a major item to negotiate.
Structural and soil: Some Colorado areas (like Highlands Ranch or other parts with expansive clay soils) can have foundation movement. Inspectors will note cracks or signs of movement. Severe issues might need a structural engineer’s evaluation. Minor settling is common and usually not a deal-breaker, but significant structural fixes can be very costly, so watch for that.
Roof and hail: We get hail storms here that can beat up roofs. Always check how old the roof is and if there’s any hail damage. If the roof is near end of life or damaged, that’s a big ticket item to negotiate (perhaps having the seller’s insurance cover a replacement if it was from a storm).
Once inspections are settled, you can breathe a sigh of relief – one big hurdle over. But we’re not at the finish line yet. Next comes ensuring the appraisal and loan approval go through.
Once the seller accepts your offer and both parties have signed the contract, you have a binding agreement. You’re now “under contract” on the home. Hooray! But the process isn’t over yet – in fact, now the contract timeline begins. There will be several important steps and deadlines defined in that contract. This period is where you and your agent work through any remaining negotiations (usually related to inspection or appraisal) and basically dot all the i’s and cross all the t’s before closing.
The Contract and Earnest Money
Right after acceptance, one of your first to-dos is typically to submit your earnest money deposit (if you haven’t already). In Colorado, the earnest money check will be cashed and held in an escrow account (often by the title company or brokerage) until closingkw.com. Don’t panic when that check is cashed – it’s normal. Those funds will go toward your purchase at closing (think of it as a down payment credit). Just be sure you get it in by the deadline (usually within a few days of contract acceptance).
Your contract will lay out various contingency deadlines. Common ones in Colorado include: Inspection Objection Deadline, Resolution Deadline, Appraisal Deadline, Loan (Credit) Approval Deadline, and Closing Date. These protect you as the buyer, but you must stick to them.
Inspection Negotiation
The inspection contingency is up first (typically within 7-14 days of going under contract). This is your chance to thoroughly evaluate the condition of the home. You’ll hire a professional home inspector to perform a top-to-bottom inspection of the property. (Your agent can recommend a good inspector if you need one. Always choose a qualified inspector – note that Colorado does not have state licensing for home inspectorsleg.colorado.gov, so make sure your inspector has a strong reputation or certification from a respected organization like InterNACHI or ASHI.)
What happens at the inspection? On inspection day, the inspector will spend a few hours checking everything: the roof, foundation, plumbing, electrical, HVAC, appliances, etc. They will identify any issues, big or small. It’s highly recommended that you attend the inspection (usually towards the end, the inspector can walk you through the major findings in person). This is a great learning opportunity about your future home’s systems. You can ask questions like “How do I change the furnace filter?” or “Is this crack in the wall a big deal?” The inspector will also provide a detailed written report, often with photos, describing any problems or maintenance items.
In Colorado, sellers provide a Seller’s Property Disclosure form as well, detailing any known issues or past repairs (e.g. “repaired roof leak in 2018”). Review that document, but always trust your own inspection over a seller’s memory. Sometimes sellers genuinely aren’t aware of a problem, which an inspection uncovers.
After the inspection, you and your agent will discuss the results. No house is perfect, not even new construction, so expect a list of minor findings. What you’re looking for are major issues or safety concerns: things like structural defects, outdated or unsafe electrical, plumbing leaks, mold, high radon levels, HVAC not functioning, roof damage, etc. The good news is, if significant problems turn up, you typically have options to negotiate with the seller. You can request they repair certain things or ask for a credit/concession (money off the price or towards closing costs) so you can handle the repair after closing. For example, if the inspection finds the water heater is on its last legs, you might ask the seller to replace it, or give you, say, $1,500 credit to replace it yourself later.
Compose an Inspection Objection (a formal document/list) of the items you’re requesting to be fixed or credited. The seller will then respond by the Resolution Deadline – they may agree to all, some, or none of your requests, or propose an alternative (like offering cash in lieu of repairs). This kicks off a mini-negotiation specific to inspection issues. Both parties need to come to a resolution by the deadline. If you absolutely can’t reach an agreement (perhaps the house has a serious defect and the seller refuses to address it), you, the buyer, can exit the contract and keep your earnest money (as long as you are within the contingency timeline) – essentially you’d cancel due to unsatisfactory inspection. This is a protection for you so you’re not forced to buy a lemon.
However, most of the time buyer and seller find a compromise. It’s in everyone’s interest to keep the deal moving. Typically, sellers will agree to fix certain defects or provide a credit so you’re satisfied. For instance, a seller might say “We’ll repair the electrical issue and roof leak you asked for, but won’t replace the old carpet – that’s cosmetic.” You decide if that’s acceptable. Once both sides sign the Inspection Resolution, that contingency is considered settled. Pro tip: Focus on health, safety, and big-ticket repairs in your requests. Don’t sweat the small cosmetic stuff; you can handle that later. By keeping requests reasonable, you’re more likely to get seller cooperation.
Step 8: Appraisal and Final Mortgage Approval – Crossing the T’s on Financing
While you were dealing with inspections, your lender has been busy processing your loan. One of the most important steps on the lender’s side is the appraisal. This is when the bank orders an independent appraiser to evaluate the home and confirm its value. The appraiser will visit the property and compare it to recent sales, then issue a report with the appraised value.
Why appraisals matter
Lenders don’t want to lend you more money than a property is worth (as determined by the appraisal). The home is their collateral. So if you agreed to pay $500,000 for the house, but the appraisal comes in at $480,000, we have what’s called an appraisal gap. In that case, unless you have an appraisal gap clause to cover it, the lender will only lend based on $480k value, meaning there’s a $20k shortfall. You and the seller then have to negotiate – often the options are the seller lowers the price to $480k, you bring extra cash to cover the gap, or you meet in the middle. If no agreement, the appraisal contingency lets you exit the deal with your earnest money. In the Denver market, low appraisals can happen especially if prices are rising quickly or you bid high to win a home. However, many appraisals come in at or above purchase price if the comps support it.
If the appraisal meets or exceeds the purchase price – fantastic, one less worry. If it comes in low, your agent will discuss next steps and negotiation with you. Sometimes providing additional comps or information to the appraiser can lead to a reconsideration of value, but that’s not very common to succeed. More often, a price reduction or cash infusion resolves it.
Simultaneously, the lender is finalizing your mortgage underwriting. They might ask you for updated documents (like a new pay stub or bank statement). Be responsive and get them anything they need quickly. They’ll verify things like the title work (the title company does a title search to ensure there are no liens or ownership disputes on the property) and that you’ve obtained homeowners insurance (your lender will require you to have an insurance policy effective by closing). Also, right before closing, they will do a final credit refresh and employment verification, which is why we cautioned earlier not to change jobs or rack up new debt.
Title and closing prep
The title company in Colorado plays a big role now. They act as the escrow agent for the transaction – a neutral third party who will handle the funds and documents. They’ll be preparing the settlement statement (also known as a HUD-1 or Closing Disclosure) which details all the financials of the deal: purchase price, your loan amount, prorated taxes, fees, credits, etc. You have a right to see the Closing Disclosure at least 3 days before closing (federal law), so keep an eye out for that from your lender. Review it and ask questions if anything looks off. It should pretty closely match your loan estimate from earlier, adjusted for the final purchase price and any credits/changes.
During this “under contract” period, most of the heavy lifting is actually on your agent, lender, and title company. They’re verifying everything. From your end, the main job is: keep your finances steady, get any paperwork requested in, secure your homeowner’s insurance, and start thinking about moving logistics and utilities. Also, do not forget to set aside the money you’ll need for the remainder of your down payment and closing costs. Those funds will typically need to be in the form of a wire transfer or cashier’s check to the title company at closing (they’ll give you instructions). Personal checks or large amounts of cash are not accepted, so plan with your bank to have the funds accessible in one account ready to send. Never wire money without confirming details verbally with the title company (beware wire fraud – always double-check account info via a trusted contact).
Your lender will issue a “clear to close” when all conditions are satisfied. That’s the green light that we’re ready to schedule the closing. Usually by now, the closing date was set in the contract. A day or two before closing, you should get the final numbers (how much you need to bring in funds, etc.) in the settlement statement. Make sure to arrange that wire or cashier’s check for that amount, and gather any documents you need to bring (typically a government photo ID for all buyers is required). Also, keep that credit clean in the final stretch – don’t go finance new furniture just yet!
Everything looking good? Great – now it’s time for one more sanity check on the home itself: the final walk-through.
Step 9: Final Walk-Through – Your Last Check Before Closing
Usually the night before or morning of closing, you and your agent will do a final walk-through of the property. This is generally a quick visit (maybe 30 minutes) to ensure that the house is in the condition it’s supposed to be, and that any agreed-upon repairs from the inspection have been completed.
What to do on your final walk-through:
Verify that the seller’s belongings are moved out (unless you’ve allowed them to stay post-closing). The home should be mostly empty (aside from items they agreed to leave or fixtures). In Colorado, the contract typically stipulates the home be delivered in “broom clean” condition, meaning swept/vacuumed and free of debris.
Check that all the appliances and systems are still working as expected. Test lights, run water faucets, flush toilets, quickly test the HVAC and kitchen appliances. You’re making sure nothing broke in the interim and nothing was removed that should remain. (For instance, if the contract said all kitchen appliances stay, confirm the fridge, stove, etc., are indeed there and functional.)
If the seller agreed to make repairs, inspect those. If a roof repair was done, for example, you might not climb up there, but you could ask for any invoices or warranties from the repair. Or if they agreed to fix an electrical issue, you might test that the previously non-working outlet is now working. Sometimes your inspector can be hired to do a re-inspection on specific fixes if you want an expert eye, but usually a visual check by you and your agent suffices.
Look for any new damage. It’s rare, but occasionally accidents happen during move-out (a scratch on the wood floor from moving furniture, or a broken window, etc.). If you find something like that, it needs to be addressed. Also make sure the home hasn’t been vandalized or flooded or anything weird since you last saw it – again, very rare, but that’s what the walk-through is for.
Most of the time, the final walk-through is uneventful and just a feel-good moment – you’re seeing your soon-to-be home empty and ready! Take a moment to soak it in. Imagine where you’ll place your furniture, and get excited. This is really happening.
If you do find an issue at walk-through (say the seller didn’t remove all the junk from the garage, or a promised repair wasn’t done), notify your agent immediately. They will contact the seller’s agent to find a solution. Possible resolutions might include the seller agreeing to a last-minute credit to you, or a holdback of some funds until the issue is fixed, etc. Both sides want the closing to happen on time, so there’s strong incentive to negotiate a quick fix for any problems discovered.
Once you’re satisfied that the home is A-OK, you’re ready for the big day: Closing!
Step 10: Closing Day – Signing, Smiling, and Getting the Keys
Here we are – Closing Day, the finish line of your homebuying journey. By the end of today, you’ll officially be a homeowner! The closing is essentially a meeting (often at the title company’s office or a real estate office) where all the final documents are signed and money changes hands.
Who attends the closing?
Typically, you (the buyer), possibly your co-buyer or anyone else on the loan/title, your real estate agent, maybe your lender (often not, they just send docs), the closing agent (escrow officer or title company rep), and sometimes the sellers and their agent. In Colorado, we often do “traditional” closings where buyers and sellers might sit at the same table and sign one after the other, or they might be in separate rooms or separate appointment times – it can vary. Either way, an escrow officer will be the one guiding you through the paperwork. If a seller can’t attend in person, sometimes they sign ahead of time or give power of attorney, etc. And in current times, remote or mail-away closings are possible too, but assume you’ll likely go in person.
What do you need to bring?
Bring a government-issued photo ID (driver’s license or passport) – they need to notarize your signature and confirm identity. Also bring your method of paying closing funds (if you wired the money in advance, bring proof/confirmation; if you’re bringing a cashier’s check, bring that). It’s also good to have your checkbook in case of any last-minute minor adjustments (though usually not needed if all was pre-calculated). And maybe bring a favorite pen – though they’ll have plenty, some buyers like to keep the pen as a souvenir
What do you sign?
A lot of documents. Be prepared for a hand cramp – you will be signing your name dozens of times (feel like signing autographs yet?). Among the documents: the Closing Disclosure/Settlement Statement (reviewing all finances again), the Deed of Trust (the mortgage document that gets recorded as a lien on the property), the Promissory Note (your promise to repay the loan), and a stack of affidavits and disclaimers from the lender. The escrow agent will explain each one briefly – don’t hesitate to ask questions if something is unclear. Your agent can also help explain or ensure everything is in order. It might feel a bit rushed on the day, but remember, you had the Closing Disclosure ahead of time to review the numbers. Most of the other docs are standard forms.
Closing costs payment
You’ll either hand over the cashier’s check or confirm the wire went through for the amount due. That covers the remainder of your down payment + closing costs as stated in the settlement statement. The escrow agent will verify all funds are received and good.
Transferring ownership
The seller will sign documents too, notably the deed transferring title to you. In Colorado, typically a General Warranty Deed is used to convey the property to the buyer. The title company will later take that deed and record it with the county, making you officially the owner of record. There will also be some other title documents and possibly a transfer of any home warranty or HOA information if applicable.
During the closing, you’ll also handle things like proof of insurance (usually already done, but you may need to provide your insurance binder), and arrangements for property taxes and insurance escrows if your loan has those. The settlement agent (title officer) is orchestrating everything – they ensure once all papers are signed, the lender’s funds and your funds are properly disbursed: paying off any old liens, paying the seller their proceeds, etc., and your new loan is set to begin.
It sounds like a lot, but the meeting typically takes about an hour. After all papers are signed, the closing agent will often say “Congratulations, you’re now a homeowner!” – but note, sometimes funding must be confirmed before it’s truly official. In most cases, if you signed in the morning, the loan funds by midday and everything gets wrapped up. By end of that day (or whatever was the agreed time in contract), you get the keys 🔑! In Colorado, ownership usually transfers upon completion of signing and funding on closing day – you walk in a renter, walk out a homeowner.
One nuance: On occasion, key transfer might be delayed until after the deed is recorded or funds fully clear. This could be later that day or the next business day. But generally, closings here are “table funding,” meaning it all happens at the table or same day. Your agent will either hand you the keys at closing or arrange pick-up once the file is officially recorded. If the seller is occupying under a rent-back, then key handover happens after that rent-back period as agreed.
But assuming a standard scenario: Pop the champagne (or sparkling cider) because the house is yours!
You’re a Homeowner – What’s Next?
Walking out of the closing, you’ll have a packet of documents in one hand and the keys to your new Colorado home in the other. Take a moment to savor it. Buying your first home is no small feat. You navigated the process from start to finish – decided to buy, assembled a great team (agent, lender, etc.), secured financing, found the right home, negotiated a deal, completed inspections, and closed the transaction. Give yourself a pat on the back!
Homeownership is a journey that’s just beginning. Now you get to enjoy decorating your place, maybe doing some DIY projects, and truly making it yours. Over time, you’ll build equity as you pay down your mortgage and (hopefully) as your home value rises. Remember that stat about homeowners’ wealth? That’s now working in your favor. You’re investing in yourself and your future. Plus, you have the stability and pride of owning your own home. No landlord can suddenly decide to not renew your lease – it’s your house, and you make the rules.