“Is it possible to find a house in Denver anymore?” That’s the most common question I am asked as a Denver Realtor. The number of homes for sale in Denver is the lowest since they have been keeping records. Many buyers are getting discouraged. The home of their dreams seems illusive. Or worse, it’s overpriced and still getting multiple offers. So, I decided to write a series of two real estate blog articles to finally answer that question.
Is it really possible to find a house in Denver now?
Right now, the Denver Metro Area is seeing historic lows for inventory (homes for sale). Also, mortgage rates are at historic lows, making a buyer’s purchasing power (how much they can afford) increase. At the end of 2019, there were 12,318 active single-family home listings in the Denver MLS. Unfortunately, we ended 2020 with only 4,377 active single-family home listings. Despite the intense amount of competition, lack of inventory, and steadily increasing home prices, it really is possible to find a house in Denver.
In order to “win” in an extremely competitive seller’s market you need three things to make a winning formula.
A competent full-time local REALTOR®
It’s important to have a REALTOR® you trust and understand to represent you and your interests. Additionally, it’s important that the person you choose to represent you has a strong presence and positive reputation in the real estate community.
This doesn’t mean going to Zillow, Redfin, or another big online search tool to find your agent. It means having an well known agent that other agents want to work with. Listing brokers don’t want to work with part-time or inexperienced agents who may not “get the deal to a closing”.
Real estate agents pay to be featured on those national sites. However, those sites can be a good place to find reviews of competent agents. Websites like Peer Reputation are websites where other agents, buyers, and sellers can give genuine feedback about experiences with different agents. It’s also a good idea to check Google and Facebook reviews. A competent realtor is also going to have the knowledge of the market, know how to talk to listing agents to build a relationship, add extras to your offer to make it more appealing without having to increase the price drastically.
Best of all, a top-producing agent like those at Kentwood Real Estate can get your offer noticed by listing brokers and, ultimately, to the finish line.
A local mortgage broker or lender
In my experiences, big-box banks like Wells Fargo and Bank of America, have not given our clients the proper attention and customer service. In order to be competitive, you need a lender that is as amazing as your Realtor. A “good lender” is someone who is local (knows the Colorado purchasing process), patient (will explain all the ins and out of the loan so there are no surprises), knowledgeable, and available on nights and weekends. Because you’ll most likely be finding the home you want to purchase on the weekend, the lender needs to be available for when we submit the offer.
Not only do you need to submit a pre-approval letter with your offer, but the lender will be calling the listing agent to explain how you are qualified for this loan and how they will work diligently to ensure the loan closes on time. They will give the listing agent the confidence to pass on to the seller that they will be able to get your offer to the closing table. An offer is only as good as the funds behind it.
But with a good team of a Realtor and lender, your offer will be stronger. Which will make it possible for you to buy a home in Denver. A great place to find a lender is to ask your realtor for their list of their preferred lenders. This is typically a list of local lenders with who your agent has worked and has a relationship.
Why do you want to buy a home in Denver? Is this a dream or a goal for you to purchase a home? Are you motivated to purchase a home? The market is tough but you can survive it if you keep your eye on the prize and your goal. Right now, many single-family homes under $600,000 are receiving multiple offers. I’ve heard of a seller receiving as many as 25 offers on one property in one weekend. These offers are typically 5% to 10% over the asking price.
Also, buyers are limiting inspection to not ask the seller to make any repairs for items found during the inspection, appraisal gap waiver. An appraisal gap waiver is if the home doesn’t appraise, the buyer(s) agree to bring the difference between the price on the contract and the appraised value.
So if you are under contract for $475,000, the house appraises for $460,000, your lender will only give you a loan for the lower of the contract price and appraised value. Which means you have to bring that additional cash to closing. Sellers are also seeing a lot of cash offers, which takes out the variable of a lender. All in all, it’s not necessarily going to be an easy process. So you need that motivation to own a home to keep going and get to the closing table.
With those components you can win a home in the Denver real estate market. You are now a homeowner and have made a wonderful investment for your future. It’s possible to buy a home in Denver.