10 Colorado Home Buying Mistakes and What Each One Costs

Colorado home buyers lose money in ten predictable places, and each one carries a price tag. Waiving the inspection in a hail state, skipping the $200 sewer scope, ignoring a metro district mill levy, missing a contract deadline, floating a mortgage rate and buying at the top of the pre-approval band cost Front Range buyers $2,000 to $40,000 apiece. This guide names all ten, prices each one and gives the fix the Kenna Real Estate Group uses on every purchase.

1. Waiving the inspection in a hail state

The Front Range sits inside the corridor insurers call hail alley. Hail season runs May to September, and a roof that took a storm two summers ago shows bruised shingles, dented gutters and pocked soft metal on the vents. A buyer who waives the inspection buys that roof blind. Replacement on a 2,000 square foot Denver metro home runs $15,000 to $30,000.

Colorado homeowner policies now carry wind and hail deductibles written as a percentage of the dwelling limit, 1% to 2% on most new policies. On a $600,000 dwelling limit that is $6,000 to $12,000 out of pocket before insurance pays a dollar. The fix in a competitive offer is a 5-day inspection deadline, not a waiver. The seller sees speed; you keep the right to walk. The Colorado roof replacement cost guide shows what each roofing material costs on the Front Range.

2. Skipping the sewer scope

Denver's pre-1970 neighborhoods, from Park Hill and Washington Park to Berkeley, plus the older cores of Englewood, Littleton, Arvada and Lakewood, run on clay tile sewer lines. Tree roots crack them, joints offset, and a section of Orangeburg pipe collapses without warning. A camera scope costs $150 to $300 and takes 30 minutes.

A line replacement from the house to the city tap runs $8,000 to $25,000, and more when the tap sits under a street the city has to cut and repave. Order the scope with the general inspection on every home built before 1980 and on any home with mature trees in the front yard. When the video shows a break, the Kenna Real Estate Group writes the repair or a credit into the inspection objection.

3. Ignoring metro district taxes

Newer subdivisions in Parker, Castle Rock, southeast Aurora, Commerce City, Erie, Thornton, Johnstown and Windsor sit inside metropolitan districts that borrowed money to build the roads, water lines and parks. The district repays that debt with its own mill levy on top of county, city and fire district mills. On many newer Front Range homes the metro district adds $1,500 to $4,000 a year to the property tax bill.

The listing sheet shows last year's taxes, which lag. Pull the current bill from the county treasurer's site for the exact parcel and put that number into the payment. The Denver metro suburbs guide to HOAs, metro districts and taxes lists which communities carry the highest district mills.

4. Missing a deadline in the Colorado contract

The Colorado Contract to Buy and Sell Real Estate is built on dated deadlines: title objection, HOA documents, inspection objection, inspection termination, appraisal, loan termination and closing. Terminate on or before the matching deadline and the earnest money comes back. Terminate one day late and the seller has a claim on it.

Denver metro earnest money runs 1% to 2% of the price, $5,000 to $20,000 on most purchases. The fix is mechanical: the day the contract is signed, every date goes on a shared calendar with a reminder two business days ahead. The Kenna Real Estate Group tracks each deadline in the transaction file and confirms every extension in writing. The guide to what happens after your offer is accepted walks through each date in order.

5. Not locking the mortgage rate

A rate that floats for 30 days after contract moves with the market. For example, on a $500,000 loan a rate of 6.5% carries a principal and interest payment of $3,160; at 6.75% it is $3,243. That 0.25% costs $83 a month and $29,800 over 30 years. Lock for 30 to 45 days once the contract is signed, and ask the lender for the lock expiration date and the cost of a 15-day extension before you need one.

For rate locks, buydowns and pre-approval, the Kenna Real Estate Group works with Mike Oswald, VP of Mortgage Lending at Rate, NMLS 261003, Equal Housing Lender. You are free to use any lender. The Colorado financing page explains lock periods, points and buydowns, and the Colorado mortgage pre-approval guide covers what to bring to the first call.

6. Buying at the top of the pre-approval band

The pre-approval letter states the maximum loan, not the budget. Colorado adds three line items that the national calculators miss: metro district mills, a wind and hail insurance premium that has risen with every storm season, and an HOA fee in most townhome and condo communities. A buyer who takes the full approval and then discovers a $350 metro district payment and a $200 HOA fee spends $2,400 to $6,000 a year over plan.

The Kenna Real Estate Group keeps every buyer to three numbers before the first showing: the monthly payment with taxes, insurance, HOA and metro district included; the cash to close; and the reserves left in the bank after closing, three months of the full payment at minimum. Every home gets tested against those three numbers, not the approval amount. The full-payment test for Centennial buyers shows the math on a real home.

7. Skipping the radon test

Colorado is an EPA Zone 1 radon state, and about half of Colorado homes tested come in above the EPA action level of 4.0 picocuries per liter. A 48-hour test during the inspection period costs $150 to $250. A mitigation system, a sealed sump pit and a fan-driven vent pipe, costs $1,200 to $2,500 installed.

Skip the test and the mitigation bill is yours instead of the seller's. Test every home, including new construction with a passive rough-in, because a passive pipe without a fan does not count as mitigation. The radon and the Denver home purchase guide explains how to read the result.

8. Underestimating closing costs and prepaids

Colorado buyer closing costs run 2% to 3% of the price when the prepaid items are counted: the first year of homeowner insurance, two to three months of property tax escrow, prepaid interest, title, recording and lender fees. On a $550,000 home that is $11,000 to $16,500 on top of the down payment.

Get the loan estimate before writing the offer, then ask the seller for a concession that covers part of it. The Colorado closing costs guide itemizes every line.

9. Not reading the HOA documents

The Colorado contract sets an HOA documents deadline. The seller delivers the declaration, bylaws, rules, budget, reserve study and 12 months of board minutes, and the buyer has the right to terminate by that date for any reason found in them. Buyers who skip the minutes miss the sentence that matters: a roof, elevator or parking structure the reserve fund cannot cover.

Special assessments on aging Denver condo and townhome buildings run $5,000 to $30,000 per unit. In Highlands Ranch the HRCA covenants govern exterior changes, and in metro district communities the district and the HOA are two separate bills. Read the Denver HOA rules and fees guide and the guide to catching an HOA special assessment before closing.

10. Buying at peak season and escalating over asking

Front Range listings peak March through June, and that is when multiple offers push the price $10,000 to $30,000 over asking on well-priced homes. From November through February the same home sits longer, the seller concedes closing costs, and homes over 30 days in MLS accept offers under list. The guide to paying less for a Colorado home lists nine ways to do it.

Search by days on market on the Colorado home search, and compare cities with the Denver, Aurora, Parker and Castle Rock explore pages.

Where to go next

• The Colorado home buyer's guide
• First-time home buyer guide for Colorado
• How the Kenna Real Estate Group helps buyers
• The Colorado showing red-flag checklist
• Find a good home inspector before buying a Denver home
• Meet the agents

Talk to the Kenna Real Estate Group

The Kenna Real Estate Group, Keller Williams DTC in Centennial, runs every Colorado purchase against the ten items above: the three numbers before the first showing, the inspection, sewer scope and radon test on every home, the tax bill for the exact parcel, and a deadline calendar from contract to keys. Call or text 303-955-4220. A live person answers. Not a robot, not a phone tree. Start by searching every home for sale in Colorado.