Ready to buy a home in the Centennial State?
With its stunning mountain scenery, strong job market, and flat state income tax, Colorado offers a desirable lifestyle with financial benefits. Your dream home could be a charming single-family house in Denver or a cozy mountain retreat in Colorado Springs.
Whether you’re a first-time homebuyer or new to the Colorado housing market, this guide will teach you everything you need to know. We’ve broken down the entire home-buying process into 13 actionable steps.
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Key Takeaways:
- Get Pre-Approved ASAP: In a buyer’s market like Colorado, a pre-approval letter helps you stand out.
- Save Thousands with Assistance Programs: Programs like “CHFA (Colorado Housing and Finance Authority) or MetroDPA” provide down payment assistance as a grant or a 0% interest, deferred second mortgage that is often forgiven after 3 years of living in the home.
- Don’t Skip Colorado-Specific Inspections: Beyond a standard home inspection, get radon testing (common in the Rockies) and a wildfire risk assessment; these are key for insurance approval in high-risk areas like the foothills.
- Ask for Credits, Not Repairs: If the inspection has issues, ask the seller for credit at closing. This allows you to hire your own contractors and prevent closing delays.
- Protect Your Investment and Your Wallet: Secure wildfire insurance endorsements, as standard HO-3 policies fall short in Colorado. Also, file for the state Homestead Exemption to slash your property taxes by up to $55,000 on the first $200,000 of home value.
How to Buy a Home for the First Time in Colorado: 13 Steps!
This step-by-step guide walks first-time home buyers in Colorado through everything, from assessing finances and budgeting for a down payment to choosing the right mortgage. These 13 steps make the Colorado real estate process clear, simple, and manageable.
Step 1: Assess Your Finances
As a first-time home buyer in Colorado, the two factors that should matter the most to you are your credit score and Debt-to-Income (DTI) ratio. Additionally, you must also consider how much you can afford for a down payment, a monthly mortgage, taxes, and insurance.
What Is Your Credit Score?
A credit score is a three-digit number that indicates your creditworthiness to lenders. The minimum credit score to buy a house in Colorado depends on the type of mortgage you get.
Minimum and Ideal Credit Scores by Loan Type
| Loan Type | Minimum Score | Ideal Score |
|---|---|---|
| FHA | 500 (10% down) | 580+ (3.5% down) |
| Conventional | 620 | 740+ for best rates |
| VA | No minimum | 620 |
| USDA | No minimum | 640 |
Portfolio mortgage loans are easy to qualify for. Here, the credit score needed to buy a house starts at around 580. VA loans are available only to veterans and active-duty service members, and require a score of 620. FHA loans also accept scores as low as 580. They are good for buyers with lower credit scores looking for houses in Colorado.
When purchasing property in Colorado, you can check your credit score using several reliable methods. Most of them are free and will not harm your score:
- Annual Credit Reports: Federal law entitles you to one free credit report every 12 months from each of the three major credit bureaus: Equifax, Experian, and TransUnion. These can be accessed through the official, government-authorized website, AnnualCreditReport.com.
- Credit Monitoring Services: Many banks, credit card issuers, and financial service apps provide complimentary and regular access to the FICO score. This is a convenient way to track your credit health over time.
Knowing how to repair your credit score is important to get better mortgage rates. If you’re a first time home buyer in Colorado, here’s what you need to do:
- Pay down credit card balances and make all payments on time.
- Avoid opening multiple new accounts quickly.
- Consider becoming an authorized user on a family member’s account with a good history.
- Monitor your score regularly to track progress.
How to Calculate Your Monthly Mortgage Payment in Colorado?
As a first time home buyer in Colorado, knowing your average mortgage payment helps you plan your budget. Your total payment includes 4 key components, often called PITI:
- Principal and Interest: This is a major chunk of your payment, covering the amount you borrowed (principal) and the cost of borrowing (interest). It’s determined by your loan amount, interest rate, and loan term.
- Taxes: Colorado property taxes are based on your home’s assessed value. The lender holds these funds in an escrow account and pays the tax on your behalf.
- Insurance: Lenders require you to have homeowners’ insurance to protect the property. The annual premium is usually divided by 12 and added to your monthly payment, also managed through the escrow account.
Apart from PITI, your monthly payment may also include Private Mortgage Insurance if your down payment is less than 20%, and HOA fees.
Know How Much Home Can You Afford in Colorado Get an instant monthly payment estimate with Houzeo’s free Colorado mortgage calculator.
What Is a Debt-to-Income (DTI) Ratio?
Your debt-to-income ratio shows how much of your monthly income goes toward debt payments, including mortgage, car loans, credit cards, and student loans. To calculate it, add all monthly debts and divide the total by your gross pre-tax monthly income.
A high DTI can prevent you from qualifying for a mortgage, as it shows that you struggle to manage your debt. For the best mortgage rates and a higher likelihood of mortgage approval in Colorado, aim for a DTI ratio of 36% or lower.
💡 You can still qualify for a loan in Colorado despite a high DTI if you have compensating factors like a strong credit history, significant cash reserves or savings, stable long-term employment, etc.
Recommended DTI Ratios by Loan Type
| Loan Type | Recommended DTI Ratio | With Compensating Factors |
|---|---|---|
| Conventional | 36% back-end | 45-50% |
| FHA | 43% back-end | Up to 50% |
| VA | 41% | Can exceed 50% with the residual income test |
| USDA | 41% back-end | 44% with strong credit |
To improve your DTI ratio for a mortgage, you can either reduce your monthly debts or increase your verifiable income.
- Pay Down Debt: Use a tax refund or bonus to clear smaller loans, or consolidate multiple debts into a single loan with a lower monthly payment.
- Increase Verifiable Income: Ask for a raise, take on part-time work, or start a side business. Include all consistent income sources on your application, such as bonuses or commissions, but remember that lenders require a two-year history for secondary income.
- Adjust Your Housing Budget: A larger down payment reduces your loan amount and your monthly mortgage payment. You can also consider a lower home purchase price to keep your future housing costs down.
Step 2: Budget for Your Down Payment and Closing Costs
You should set aside money for the down payment and closing costs. Colorado’s first time home buyer programs help make homeownership accessible and affordable.
How Much Down Payment Does a Colorado First Time Home Buyer Need?
Typically, the down payment on a house for a first time home buyer in Colorado usually ranges from 3% to 20% of the property’s price. However, it can vary based on the loan type. FHA loans require just 3.5% down, while some conventional loans allow a 3% down payment.
To help with these upfront costs, there are many state and local down payment assistance programs in Colorado. They provide grants or loans to cover these expenses.
👉 First-Time Home Buyer Programs in Colorado: Find out which is the #1 downpayment assistance program in the Centennial State.
How to Estimate Closing Costs in Colorado?
Closing costs are fees and expenses paid at closing beyond your down payment. Typically, buyer closing costs in Colorado usually range from 2% to 5% of the home’s price. So, for a $600,200 home, buyers might pay $12,004 to $30,010.
These fees cover lender charges, appraisals, inspections, title insurance, taxes, agent commissions, and recording fees when buying a property in Colorado.
Step 3: Get Pre-Approved for a Mortgage
Secure your financing early by getting pre-approved for a mortgage as a first time homebuyer in Colorado. This step helps you understand your budget and strengthens your offer when buying a house.
How to Get Pre-approved as a First Time Home Buyer in Colorado?
You need to follow these steps to get pre-approved when buying a house in Colorado:
- Gather Financial Documents: Provide proof of income (recent pay stubs and W-2s), tax returns (last two years), asset statements, debt information, and a government-issued ID.
- Choose a Lender and Apply: Compare lenders in Colorado and submit a mortgage application to get the best rates and terms.
- Receive Pre-Approval Letter: The lender verifies your info and issues a letter stating your approved loan amount, usually valid for 30–90 days.
A mortgage preapproval turns you from a casual house hunter to a serious buyer in Colorado, as it:
- Strengthens Your Offer: 86% of the sellers prefer buyers with a pre-approved mortgage. For the strongest position, ask for a fully underwritten pre-approval, where the lender has already verified all your documents.
- Defines Your Budget: It clarifies exactly how much you can afford, allowing you to focus your home search on a realistic price range.
- Speeds Up Closing: With much of the financial vetting already completed, the mortgage process is streamlined once your offer on a home is accepted.
Yes, you can get pre-approved and even buy a home with bad credit in Colorado. However, your loan options may be limited. You can also expect higher interest rates with poor credit.
Step 4: Choose the Right Mortgage
As a first time homebuyer in Colorado, assess your finances and select a loan that fits your budget and qualifies you for available programs.
| Feature | Conventional | FHA | VA | USDA |
|---|---|---|---|---|
| Min Credit Score | 620 | 580 (500 w/10% down) | No minimum | 640 |
| Min Down Payment | 3% to 5% | 3.5% | 0% | 0% |
| Max DTI | 45% to 50% | 43% to 50% | 41%+ | 41% to 44% |
| Mortgage Insurance | PMI if <20% | Always | None | Always |
| Loan Limits | $832,750 (Base) Up to $1,249,125 | $541,287 (Base) Up to $1,249,125 | No Limit (for full entitlement) | Varies |
| Property Eligibility Criteria | Few | Must meet FHA standards | Must meet VA standards | Rural/suburban areas only |
Step 5: Decide Where to Buy a Home in Colorado
Deciding where to buy is one of the most important steps for a first time homebuyer in Colorado. Consider factors like local housing markets, popular neighborhoods, cost of living, and amenities to help you find the best places to live in Colorado.
Why Now Is the Time to Buy in Colorado
The Colorado housing market is a buyer’s market. You now have more negotiating power and a wider selection of properties to choose from:
- Housing Supply is High: Colorado has a 5-month housing supply, which is the benchmark for a buyer’s market.
- Prices Have Stabilized: The median home price has remained relatively constant at $600,200. This allows you to set your budget with more certainty.
- Sellers are Negotiating: 26.6% of homes in Colorado have seen price drops, signaling increased seller flexibility.
- Homes are on the Market Longer: Properties are taking an average of 63 days to sell, which allows you to make more informed decisions.
These trends show that now is the best time to buy a house in Colorado. According to Mauricio Umansky, founder of The Agency, the current market provides “great opportunities for buyers to be aggressive and write strong offers.”
Popular Areas for Different Buyer Types
With the market now in your favor, you can be more selective about where you buy. Use this advantage to find a neighborhood that matches your priorities, whether it’s schools, commute, or lifestyle.
- Best Areas for Families: Neighborhoods like Highlands Ranch, Parker, Erie, and Broomfield are top choices for their excellent schools and family-friendly parks. If you envision life in a community designed for family connection, explore homes for sale in Highlands Ranch, CO. Properties with access to top-tier schools and parks typically range between $400,000 and $1M.
- Best Areas for Retirees: For those seeking an active retirement, Longmont, Windsor, Grand Junction, and Durango offer low-maintenance living and vibrant social activities. If you are interested in a community renowned for its active lifestyle, consider homes for sale in Windsor, where prices generally range from $400,000 to $700,000.
- Best Areas for Young Adults: Cities like Denver, Boulder, Fort Collins, and Colorado Springs offer thriving job markets and vibrant social scenes. If a cosmopolitan lifestyle is what you seek, browse the latest Denver houses for sale, where you can find modern condos and apartments starting at just $183,000.
Consider the Cost of Living When Choosing a Location
When looking for the best place to buy a house in Colorado, consider the overall cost of living, as lower home prices can be offset by higher taxes or insurance.
- High-Cost Areas: Boulder, Aspen, Vail, and much of Denver Metro are 15–30% above the national average.
- Moderate-Cost Areas: Colorado Springs, Fort Collins, Loveland, and Longmont are near or just above the national average.
- Low-Cost Areas: Pueblo, Grand Junction, Alamosa, and Greeley are 5–15% below the national average.
Ensure Your New City Fits Your Wallet Check the cost of living in Colorado and compare expenses across multiple cities in an instant.
Step 6: Start House Hunting in Colorado
Once you’re pre-approved and know where you want to live, the next step is finding the right house. As a first-time home buyer in Colorado, you have two options:
- Work with a Realtor.
- Search for homes online.
An experienced agent can give you valuable local insights and expert guidance on neighborhood trends. However, you’ll have to negotiate the buyer agent commission with the seller, which may raise the home sale price.
If you prefer to take the lead, a high-tech platform like Houzeo is what you need. Whether you’re looking for beachfront mansions, high‑rise penthouses, spacious big homes, or luxury homes in Colorado, Houzeo has you covered. You can browse through thousands of listings, set alerts, and save your search. You can even schedule showings and submit offers, all by yourself.
Don’t Just Browse. Buy.
Your entire home purchase, managed in one place.
Download the Houzeo Mobile AppStep 7: Schedule and Attend Home Showings
After you narrow down your list of potential homes, schedule and attend showings to see each property in person. For a first-time home buyer in Colorado, visiting homes firsthand helps you evaluate condition, layout, and neighborhood, ensuring you make an informed choice.
During the showing, ask specific questions like:
- How long has the home been on the market?
- Why is the owner selling?
- What is the age of the roof, HVAC system, and water heater?
- Are there any HOA fees or pending special assessments?
- Is the property located in a flood zone?
When buying a house in Colorado for the first-time, check the property carefully during the open house. Look for roof sagging, foundation cracks, water stains, uneven floors, or sticking doors, which may indicate serious issues.
As a first time home buyer in Colorado, there are three main aspects you need to focus on when shortlisting homes:
- Insurance Risks: In Colorado, wildfire risk is often a bigger concern. So, request a wildfire risk or defensible space assessment, and confirm roof age, siding materials, and proximity to open space. Get a 4-point inspection and a wind mitigation report to assess insurability and identify features, like an old roof or the lack of impact windows, that could drive up insurance costs.
- Commute and Lifestyle: Test your commute during rush hour. Visit the neighborhood at different times to check for noise from traffic, airports, or nightlife. Ensure convenient access to key amenities like schools, groceries, and parks.
- Colorado Home Loans/Assistance Program Eligibility: If you’re applying for a loan or first time buyer program in Colorado, ensure that the house complies with its property requirements, or you may risk losing the assistance.
Pro Tip If multiple major risks stack up like an older roof, suspect electrical, moisture indicators, or weak condo reserves, move the property down your shortlist.
Step 8: Make an Offer
When crafting an offer, make a competitive bid but stay within your budget. As a first-time home buyer in Colorado, consider factors like the home’s market value, recent comparable sales, and any repairs needed. This increases your chances of getting a fair deal.
Step 1: Analyze Recent Sales
Your agent will pull up real estate comps that are similar to the one you want. Focus on the final sale price, not the list price. Home prices in many Colorado metro areas have seen modest declines, so your offer should reflect this trend.
Step 2: Adjust for the Home’s Condition
Factor in the age and condition of the roof and HVAC. If a comparable home sold for $600,200 but had a new roof, and your target home needs a $20,000 replacement, adjust your offer to account for that expense.
Step 3: Factor in Today’s Market
With more homes for sale, you have leverage. Even home builders are lowering their prices by almost 6% to attract buyers. So, for a home that is priced fairly, offer 3% to 5% less. If it is overpriced, you can justify an even lower offer, citing both the comps and market trends.
What is an Earnest Money Deposit in Colorado?
An earnest money deposit is a “good-faith” payment that shows you are a serious buyer. This money is held in escrow and applied towards your down payment at closing.
In Colorado, the standard deposit is 1% to 3% of the purchase price. On a $600,200 home, this would be between $6,002 and $18,006. In highly competitive markets like Miami or Naples, sellers may expect a deposit closer to 10%.
Once your offer is accepted, you typically have 3 business days to submit the deposit to an escrow agent, such as a title company or real estate attorney.
Yes, you can get your earnest money deposit back in Colorado, but only if you back out of the sale for the following reasons:
- The inspection reveals major issues, and you exercise the inspection contingency.
- The appraisal comes in low, and you exercise the appraisal contingency.
- You’re unable to secure the required financing, and exit during the financing contingency period
- Title issues are discovered.
Many Colorado first time home buyers forfeit their earnest money because:
- They back out after the contingency periods expire without a valid reason.
- They violate contract terms.
- The seller meets all contract obligations, but the buyer still refuses to close.
Step 9: Conduct Home Inspections
First-time home buyers in Colorado should schedule home inspections to uncover any issues before buying a house. You typically get the inspection report within 24 to 48 hours.
Which Colorado Home Inspections Should You Schedule?
A standard home inspection in Colorado isn’t enough. The state’s unique climate and weather risks require a few specialized inspections:
- General Home Inspection ($300–$500): A licensed inspector will examine everything from the roof to the foundation. They pay special attention to storm damage, proper drainage, and the age of the AC unit.
- 4-Point Inspection ($175–$300): Insurance companies require a 4-point inspection for homes over 30 years old. It focuses on the four most critical systems: the roof, HVAC, electrical, and plumbing. An old roof or an outdated electrical panel can result in the insurance coverage being denied.
- Radon Inspection ($150–$250): Colorado has some of the highest naturally occurring radon levels in the country. Elevated radon can affect resale value and loan approval. Mitigation systems are common and relatively affordable if elevated levels are found.
- Hail & Wind / Roof Certification ($100–$200): Colorado buyers often need a hail and wind inspection or roof certification. This document’s impact-resistant roofing, roof age, and installation quality. Homes with impact-resistant roofs may qualify for insurance discounts and better availability, especially along the Front Range and Eastern Plains.
- WDO / Termite Inspection ($75–$150): A termite inspection is mandatory for government-backed loans like FHA and VA, and is highly recommended for all others. Colorado’s warm, damp climate is a breeding ground for termites and other pests that can cause severe structural damage.
Consider Other Specialized Inspections
Based on the property, a Colorado first-time home buyer may want to conduct additional tests. For older homes, a sewer scope can detect cracks or tree roots in the main sewer line, saving you from a $15,000 repair down the road. If you see large cracks or uneven floors, a $700 foundation inspection is worth the investment.
For rural properties, a septic inspection is essential. If the home has a pool, a separate pool inspection will check the pump, filter, and structure for costly defects.
It’s not recommended. Even if you plan to buy cheap homes in Colorado, skipping a home inspection can lead to unexpected repair costs.
Step 10: Complete the Home Appraisal
After the inspection, your lender will typically order a home appraisal, which professionally values the property to ensure it matches your offer.
Why Do Lenders Need Appraisals?
A home appraisal in Colorado confirms the property’s market value. Appraisers typically focus on the following parameters:
- Wildfire Risk and Hardening Features: In Colorado, the “Wildfire Risk Score” has replaced the flood zone as the primary environmental value driver. Homes in high-risk wildfire zones, such as those rated Very High Fire Hazard Severity Zone (VHFHSZ) along Colorado’s Front Range foothills, often appraise 5–10% lower than comparable properties due to elevated insurance premiums and mitigation mandates.
- Insurance and Mitigation Features: The roof’s Class A fire rating, presence of ember-resistant vents, and fire-rated siding or hardscape defensible space directly influence insurability and market value, with non-compliant features triggering premium hikes or coverage denials in wildfire-prone counties like Jefferson or Larimer
- Condo/HOA Health: Appraisers closely examine a condo association’s financial health. They look for anything that may reduce the unit’s value, like the association’s reserve funds or any pending special assessments.
A standard appraisal in Colorado costs between $800 and $950 and typically takes 7 to 14 days to complete. For luxury or waterfront properties, the cost and timeline can be higher.
If the appraisal comes in lower than your offer price, you have an appraisal gap. In such a situation, you can either:
- Renegotiate the Price: Ask the seller to lower the price to the appraised value. In the current market, many sellers are willing to negotiate.
- Cover the Gap: If the seller won’t budge, you can choose to pay the difference in cash.
- Dispute the Appraisal: If you believe the appraiser made a factual error or used poor comparable sales, you can file for a Reconsideration of Value.
- Walk Away: If you cannot reach an agreement, your appraisal contingency allows you to cancel the contract and get your earnest money back.
Step 11: Negotiate Repairs and Credits
As a first time home buyer in Colorado, use your home inspection results to negotiate repairs and request credits from the seller. This step can help reduce unexpected costs and ensure your new house is move-in ready.
How to Use Your Inspection Report to Negotiate Repairs?
Your negotiation strategy should center on issues that impact the home’s safety, structural integrity, and insurability. Minor cosmetic flaws are not worth fighting over and can make you seem unreasonable. It’s easy to make this mistake as a first home buyer in Colorado.
Focus your request on these critical areas:
- Safety Hazards: This includes outdated and dangerous electrical panels, faulty wiring, or missing safety features like GFCI outlets near water.
- Structural Problems: Any issues with the foundation, load-bearing walls, or the roof structure.
- System Failures: A failing HVAC system, major plumbing leaks, or an old roof.
Get 2 to 3 written estimates from licensed contractors for any major repairs. A repair request that includes professional quotes shows you are serious and have done your homework.
Should You Ask for Repair Credit?
While you can ask the seller to perform the repairs themselves, it’s better to ask for credit instead. Credit gives you the funds to hire your own contractors and ensures the work is done to your standards, not just the cheapest way possible. It also allows the sale to proceed on schedule, without any delays.
How to Negotiate Seller Concessions
Seller concessions are a powerful tool for reducing your out-of-pocket closing costs when buying real estate in Colorado. Here, the seller pays for some of your expenses, such as the appraisal, title insurance, or property taxes.
Your ability to negotiate concessions depends on your loan type. Each loan program sets a maximum limit on how much a seller can contribute:
| Loan Type | Minimum Down Payment | Maximum Seller Concession |
|---|---|---|
| Conventional | Less than 10% | 3% of the purchase price |
| Conventional | 10% or more | 6% of the purchase price |
| FHA Loan | Any amount | 6% of the purchase price |
| VA Loan | Any amount | 4% of the purchase price |
| USDA Loan | Any amount | 6% of the purchase price |
Step 12: Review Your Closing Costs
After negotiating repairs and credit as a first time home buyer in Colorado, review all closing costs carefully. Check title fees, escrow, insurance, and taxes so you can finalize your budget and confidently buy your house.
Understanding Closing Costs in Colorado
- Colorado-Specific Taxes ($1,500+): Your closing costs will include two specific state taxes. The Documentary Stamp Tax costs $0.35 per $100 of your loan amount, while the Intangible Tax costs $0.20 per $100. On a $300,000 loan, these two taxes alone will add $1,650 to your bill.
- Title Fees ($1,500+): These cover title search, settlement, and owner’s/lender’s title insurance. In Colorado, customarily the buyer pays owner’s policy, but seller covers in some counties like Denver; expect regional variations with endorsements for minerals, access, or water rights common in mountain areas.
- Third-Party Fees ($1,200 to $2,000): Includes appraisal ($600–$900, higher for mountain homes), credit report ($40), flood certification ($20), and inspections (general $500, 4-point/wildfire $250, WDI $150). CHFA loans may require extra energy efficiency reviews.
- Prepaid and Escrow Costs ($3,000 to $6,000): You will pay for your first year of homeowners/wildfire insurance upfront. You will also fund your escrow account with several months of property tax and insurance payments to cover future bills.
Step 13: Close on Your New Home
Closing day is the moment you officially become the owner of your new Colorado home. Its success depends on a careful final walk-through, a smooth funding process, and making sure all legal documents are properly signed and recorded.
Complete Your Final Walk-Through
Within 24 hours of closing, you will do one last walk-through of the property. This is not a formal inspection, but rather your final chance to see if you want this home. Use this checklist:
- Verify Repairs: Bring your inspection report and repair addendum. Confirm that all negotiated repairs have been completed to a professional standard.
- Test Everything: Run the air conditioning and test all appliances. Make sure every system is functioning as it should.
- Check for Included Items: Ensure all items that were supposed to be included in the sale, like appliances, window treatments, and light fixtures, are still in place.
- Look for Signs of Additional Damage: Make sure no new damage has occurred since your last visit. If you see any issues, notify your agent and the title company immediately before you sign any documents.
Sign the Documents
While there are numerous documents to sign, the most important ones are:
- The Closing Disclosure: You will sign the final version of this document, which outlines all your loan terms and costs.
- The Promissory Note: This is your legal promise to repay the loan. The promissory note outlines the loan amount, interest rate, repayment schedule, and maturity date.
- The Mortgage: This document secures the property as collateral for your loan.
Once you have signed everything, you will provide your “cash to close” amount via a cashier’s check or wire transfer. After your lender sends their funds to the title company, the deal is officially funded.
Get Your Keys and Celebrate
Once the deal is funded, the title company will record the new deed with the county, officially transferring ownership to you. After they pay the seller and other parties, you will finally get the keys to your new home.
Congratulations, you are officially a Colorado homeowner! 🎉
🚩 What are the Red Flags to Look for When Buying a House in Colorado?
A new home is a huge financial investment. To ensure that you don’t sink your money into a dud, look out for these red flags:
1. Bargain-Priced Homes
An asking price that’s significantly lower than comparable homes in the area seems like a dream come true. But that’s just until the roof collapses or faulty electrical systems burn the house down.
An extremely low price could mean the property is uninsurable, or is located in a high-risk flood zone with steep insurance costs. So before you put in an offer, check the home’s sale history and other permits from the local county’s office. Also, get insurance quotes to understand your total expense better.
2. Neighborhood Sell-Out
During the open house, if you notice too many “For Sale” signs on a single street or in a small community, it should ring alarm bells. It could be due to skyrocketing HOA fees, declining school quality, or a recent increase in crime rates. It could also point to a future nuisance, like a commercial development planned nearby.
Talk to potential neighbors to get their opinion on the area. You can also check community social media pages or online forums like Nextdoor for discussions about local issues.
3. Excessive Use of Air Fresheners
A few scented candles create a welcoming atmosphere, but if a home smells like a lavender bubble burst in it, then there’s something fishy. It may be covering up a musty smell that highlights the presence of mold and plumbing issues.
Pay close attention to the smell in the closets, bathrooms, and around the air conditioning unit. Open kitchen and bathroom cabinets and smell the area under the sink. If you detect a musty odor, ask for a separate mold inspection along with the standard home inspection.
4. Sloping or Uneven Floors
Floors that are noticeably slanted or feel bouncy can indicate foundation problems. Given Colorado’s clay soil expands when wet and shrinks when dry. Minor settling may be acceptable in older homes, but significant slopes signal a major structural issue.
Bring a marble or a golf ball with you to showings and place it on the floor in different rooms to see if it rolls. Also, look for other signs of foundation issues, like large zigzag cracks in the drywall, especially above door frames.
5. Condensation or Ice Buildup on Windows
Fog or moisture trapped between double-pane windows indicates failed seals, which reduce energy efficiency and increase heating costs during Colorado’s cold winters. Failed window seals can also lead to condensation, ice buildup, and eventual water damage.
Carefully inspect windows that face direct sunlight or north-facing sides of the home, and factor replacement costs into your offer if seal failure is present.
6. Old or Non-Impact-Resistant Roofs
Roof condition is a major concern in Colorado due to frequent hailstorms. Roofs older than 10–15 years can lead to higher insurance premiums, limited coverage options, or outright denial of insurance. Always ask for the roof’s age, prior hail claims, and consider a roof or hail inspection before finalizing your offer.
7. Access and Winter Safety Concerns
In foothill or mountain communities, access can be just as important as the home itself. Steep driveways, private roads without snow-removal agreements, or limited emergency vehicle access can affect daily living, insurance approval, and resale value. Always consider how the property functions during heavy snow and winter weather before committing to a purchase.
What Should You Do After Closing?
Welcome home! Now it’s time to handle a few must-dos to protect your investment:
- File for Homestead Exemption: If the house is your primary residence, apply for Senior Property Tax Exemption (if eligible) or ensure you’re receiving the Residential Assessment Rate to reduce your property taxes. You could save in taxes, which is especially valuable in high-tax areas like Denver, Boulder, and the mountain counties.
- Set Up Utilities: Get the water, electric, internet, and trash services connected. Schedule proactive pest control for carpenter ants and rodents, rampant in foothill and mountain zones year-round.
- Get Insurance: Secure homeowners coverage (required for mortgages) with wildfire and hail endorsements, plus separate flood insurance in FEMA zones along rivers like the Arkansas or St. Vrain. Premiums soar 20–50% in VHFHSZ areas such as Jefferson County or post-Marshall Fire rebuilds in Louisville.
- Home Maintenance Plan: Schedule AC tune-ups at least twice a year, clear gutters regularly, and inspect roofs for storm damage or algae buildup. Consider wind mitigation upgrades to reduce insurance costs.
How to Buy a House in Colorado Without a Realtor?
Research neighborhoods and browse listings on trusted sites like Houzeo. Then, schedule showings directly with sellers or their agents. You can also hire a real estate attorney to review contracts and handle legal details.
Next, get pre-approved for a mortgage, make an offer, schedule inspections, and negotiate repairs. With the necessary due diligence, you can buy a house without a Realtor.
Which First Time Home Buyer Programs in Colorado Can You Apply For?
Various programs make homeownership accessible for a first time home buyer in Colorado. They assist with down payments through grants or low-interest, deferred-payment loans. Applicants must meet the income and credit score criteria and complete a homebuyer education course to avail of these programs.
| Program Name | Eligibility | Grants | Key Benefit |
|---|---|---|---|
| CHFA FirstStep & FirstStep Plus | First-time buyers; income & purchase-price limits apply | Up to 4% of loan amount for down payment & closing costs | Fixed-rate mortgage with forgivable or repayable assistance |
| CHFA HomeAccess | Buyers with disabilities or household member with disability; income limits apply | Up to 4% of loan amount | Flexible credit requirements and accessibility focus |
| Metro DPA / Front Range Local Programs | Varies by city or county (Denver, Aurora, Boulder, COS) | $10,000–$50,000+ in grants or deferred loans | Local funds that stack with CHFA programs |
| Colorado Housing Assistance Corp (CHAC) | Income-qualified buyers; first-time buyer education required | Down payment assistance up to $25,000+ | Layered assistance with FHA, VA, USDA & Conventional loans |
| CHFA SmartStep | Repeat buyers allowed; income limits apply | Up to 3% of loan amount | Lower mortgage insurance with competitive rates |
1. CHFA FirstStep & FirstStep Plus Program
- Eligible Buyers: First-time homebuyers purchasing a primary residence; county income and purchase-price limits apply.
- Credit Score: Minimum 640.
- Assistance: Up to 4% of the loan amount for down payment and closing costs.
The CHFA FirstStep Program, offered by the Colorado Housing and Finance Authority (CHFA), is the most widely used first-time buyer loan in the state. It provides a 30-year, fixed-rate mortgage paired with optional down payment assistance. The assistance can be structured as either a repayable second mortgage or, in some cases, forgivable assistance, depending on the option selected.
2. CHFA HomeAccess Program
- Eligible Buyers: Buyers with a disability, or households with a member who has a disability; income limits apply.
- Credit Score: Minimum 640.
- Assistance: Up to 4% of the loan amount for down payment and closing costs.
The CHFA HomeAccess Program is designed to make homeownership more accessible for Coloradans with disabilities. It offers flexible underwriting guidelines, competitive fixed mortgage rates, and down payment assistance similar to FirstStep. The program can be used for first-time or repeat buyers and is often combined with FHA, VA, or conventional loans.
3. CHFA SmartStep Program
- Eligible Buyers: First-time and repeat buyers; income and purchase-price limits apply.
- Credit Score: Typically 680+ (varies by lender).
- Assistance: Up to 3% of the loan amount for down payment or closing costs.
The CHFA SmartStep Program is ideal for buyers who don’t qualify as first-time homeowners or who have slightly higher incomes. It offers competitive interest rates and lower mortgage insurance costs compared to some other assistance programs. Buyers can pair SmartStep with CHFA down payment assistance to reduce upfront cash requirements.
4. Metro DPA & Front Range Local Assistance Programs
- Eligible Buyers: Varies by city or county (Denver, Aurora, Boulder, Colorado Springs, Adams County, etc.).
- Credit Score: Program-specific.
- Assistance: $10,000 to $50,000+ in grants or deferred-payment loans.
Many Colorado cities and counties offer local down payment assistance programs that can be layered on top of CHFA loans. These Metro DPA programs often provide deferred or forgivable assistance, meaning no monthly payments until the home is sold or refinanced. Funding is limited and subject to availability, making early application critical.
5. Colorado Housing Assistance Corporation (CHAC)
- Eligible Buyers: Income-qualified buyers; homebuyer education required.
- Credit Score: Program-specific, often flexible.
- Assistance: Down payment assistance up to $25,000 or more.
CHAC is a nonprofit organization that helps Colorado buyers bridge the affordability gap through layered down payment assistance. CHAC works alongside FHA, VA, USDA, and conventional loans and is especially helpful for buyers who qualify for a mortgage but struggle with upfront costs. Assistance may be deferred or partially forgivable, depending on the program structure.
» First Time Buyer Programs: Find the perfect program that helps you get the key to your first home.
How to Buy a House in Colorado Near Me
What Should You Know Before Buying a House in Colorado?
Before you buy a home in the Centennial State, you must understand the factors that can impact your budget and lifestyle.
What are Some Additional Costs When Buying Houses in Colorado?
Apart from the purchase price, you must account for several other expenses, like property taxes and potential HOA fees. However, the most critical consideration for any Colorado homebuyer is insurance.
- Why Homeowners Insurance is Crucial: Colorado’s exposure to hailstorms, wildfires, severe wind, heavy snow, and spring flooding. These risks can cause significant damage to roofs, siding, and structures, making insurance a critical safeguard for protecting your investment, especially in the Front Range, foothills, and mountain communities.
- High Insurance Costs: Insurance costs in Colorado can be high, particularly in Very High Fire Hazard or severe hail corridors along the I‑25 and I‑70 corridors. In some wildfire-prone or resort communities, annual premiums can reach several thousand dollars, especially when insurers apply wildfire surcharges or higher deductibles for hail and wind.
- Choosing the Right Policy: When selecting a policy, ensure it provides adequate hail, wind, wildfire, and snow load damage coverage. You could lower your premium by choosing a home with wind mitigation features like impact windows or a newer roof.
Why First-Time Homebuyers Should Explore Colorado Now?
Colorado is a smart choice for first-time buyers, thanks to low property tax rates and a market that now favors buyers. From Denver’s job market to Fort Collins’ college-town appeal charm, there’s a community for every budget.
With thousands of homes for sale and numerous down payment assistance programs, homeownership is more attainable than ever.
» Houzeo Reviews: Read what customers have to say about Houzeo, Colorado’s best home buying website.
