Earlier this month, my daughter-in-law and her boyfriend purchased their first home. They ended up in a three-bedroom, two-bathroom home near Columbine. It has a two car garage and decent sized yards in the front and back.
Feel free to gasp at their achievement in today’s market.
They are both in their mid-twenties, have recently completed master’s programs and started their respective careers last fall. She is a speech therapist and he is a school counsellor. It’s not like either of them is a major league baseball player with the mega-contract in place and millions to drop on a down payment.
Instead, they had two things that seemed necessary in today’s market: a little help and a lot of luck.
They started by doing a lot of research and coming up with a plan. They wanted to avoid renting — Denver’s rental market has been nearly as busy as its real estate counterpart. What little they could save after paying ever-increasing rents would probably not be enough to meet skyrocketing property costs. For every dollar they saved, they ended up another dollar fifty in the hole.
So my wife and I let them live with us for the past year. We have the space and really enjoy their company. Even the large rabbit pen they arrived with found its way into our home.
Because the two are good savers — their idea of a wild night is picking up Chipotle and rewatching The Office — they quickly set aside a sizable down payment. When they finally started looking several months ago, they knew what they could afford.
It was intimidating.
They searched several locations in the Denver metro area. They looked at renovations and they looked at new construction. They searched the city and the suburbs. They looked and looked and looked.
And in the end they got lucky.
Turns out my mother-in-law’s dog groomer confided that she was planning to move to Florida and had to sell her house. It was in a perfect location: near good schools, a few blocks from parks and a swimming pool, surrounded by lots of shops and amenities, minutes from Chatfield Reservoir.
It’s something they can be happy with for decades. They won’t have to go from a starter home to an upgrade in a few years, a plan that seems increasingly outdated.
However, the house was also a bit run down. The previous owner has four large dogs and a Chihuahua. The backyard has no grass, the floors all need to be replaced, and every wall in the whole house will need at least two coats of paint.
They may need to hire someone to remove the radon and mold, and will have to decide whether to continue rooting out the sewer line or replace it entirely to avoid a complete collapse.
That’s all before making upgrades to the outdated kitchen or bathrooms or remodeling the basement.
This condition helped bring the cost down to a more reasonable amount, assuming just over $500,000 for an average sized suburban home seems reasonable. Given that the day before they closed, the Denver Metro Association of Realtors announced that the median price of a single-detached home had eclipsed $684,000, that sounds like a steal.
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They were able to get an interest rate of less than 5% and saved realtors tens of thousands of dollars – they closed a private sale directly with the seller, with no realtor on either side. These are all funds that can be reinvested in the home.
They’ve locked in the lowest required monthly payment they could hope for and will now have years to learn the art of DIY. They are excited and ready for this chapter of their lives.
As for Lori and me? We are also happy for them. And for their rabbits too.
Mario Nicolais is a lawyer and columnist who writes about law enforcement, the justice system, health care and public policy. Follow him on Twitter: @MarioNicolaiEsq
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