If you’re thinking of buying in the Denver metro area, you’re certainly not alone. However, you’re probably aware of the supply and demand issue the Mile High City if facing. If you’re a buyer in the market, the first thing you’ll need is a little patience. And the second is to understand how you can increase the likelihood of landing the house of your dreams. Here’s a few tips to help keep you expectations in check in these crazy times.

1.     Be ready to pay over asking price
According to the Denver Metro Association of Realtors’ annual market report, last year’s close-price-to-list-price ratio averaged 104 percent for single-family homes and 105 percent for multifamily units. That means you’re almost certainly going to pay more than a house is listed for.

2.     Get your finances in order and find a lender
Don’t start looking at listings until you’re sure how much you can afford.

3.     Budget for interest rates to increase
Although rates are going up, it doesn’t make homebuying unaffordable. Rates, by themselves, don’t do that. But you’ll want to buy sooner than later.

4.     Figure out your must-haves
Ultimately, buyers may have to give up some of the things on their wish list in order to get a house.

5.     Be mindful of waiving contingencies
Financing contingencies - these protect buyers in case they run into unforeseen issues with securing their financing. If you waive this contingency, you’ll lose your earnest money, usually one to three percent of the sale price, if things go awry during underwriting.

Home-inspection contingencies give buyers time to have the home inspected professionally. Waiving this contingency means you pass on identifying unforeseen electrical, plumbing, or structural issues—big-ticket items a seller would typically have to remediate before the purchase in a less competitive housing market.

Appraisal contingencies - these keep buyers from having to pay for a home that is priced well above its value. Some buyers in today’s market are specifying a certain gap they will pay between appraisal and price—often as much as $100,000.

6.     Consider a condo or townhome if you’re a first-time buyer
Although single-family homes have become even more coveted among buyers, if you can’t afford this type of home, it’s okay to start somewhere. Often that’s with a townhouse or condo.

Becoming a homeowner in a seller’s market is challenging, but certainly not impossible. If you’re ready to see what the Denver metro has to offer, contact Metrowest – we’d love to discuss your options!