First-Time Homebuyer Checklist: Denver Edition (2025)
Buying your first home is one of the most important financial decisions you’ll ever make — and if you're house hunting in the Mile High City, you'll want to be equipped with the right tools, data, and local knowledge to make a smart choice.
The Denver real estate market in 2025 presents both opportunities and challenges for first-time buyers — from navigating affordability to leveraging assistance programs and understanding a stabilizing market.
This guide walks you through every step of the homebuying process, tailored specifically to Denver-area first-time buyers.
✅ Explore related insights: Work From Home Buyers: Denver Suburb Comparison Guide
1. Assess Your Financial Readiness
✅ Check Your Credit Score for a Home Loan
Your credit score determines both your eligibility and your mortgage rate. Here’s what lenders typically expect:
Conventional loan: Minimum score of 620
FHA loan: Minimum score of 580 (or 500 with 10% down)
Check your credit free at AnnualCreditReport.com and aim for a score above 700 to access the best rates. Colorado’s average FICO score is 722, according to Experian.
If your score needs improvement:
Pay down credit cards
Avoid new debt
Correct any errors on your credit report
✅ Set a Budget
Use the 28/36 Rule:
No more than 28% of your gross monthly income toward housing
No more than 36% toward total debts (including car loans, student loans, etc.)
Example: If you make $6,000/month, aim for a home with a total monthly cost (mortgage, taxes, insurance, HOA) under $1,680.
✅ Down Payment and Closing Costs
Denver’s median home price is currently around $599,000 (Q1 2025). At:
5% down: $29,950
Closing costs (2–5%): $12,000–$30,000
✅ Explore Down Payment Assistance Programs
Denver has excellent programs for first-time buyers:
CHFA (Colorado Housing and Finance Authority):
Up to 3% assistance (grant or second loan)
Requires a 620+ credit score and DTI < 50%
Includes mandatory homebuyer education
Up to 5% assistance
Forgiven after 3 years
Income limit: $195,000/year
💡 You can also withdraw up to $10,000 from an IRA penalty-free for your first home. Learn more at IRS.gov.
2. Get Pre-Approved for a Mortgage
Pre-approval helps define your budget and strengthens your offer. It also signals to sellers that you’re ready to buy.
Required Documents:
Pay stubs (30 days)
Tax returns/W-2s (2 years)
Bank statements (60 days)
Employment verification
Credit check
Shop at least three lenders for the best rate and loan terms. Consider local credit unions and CHFA-participating lenders for special programs.
🏦 Avoid changing jobs or taking on new debt during this process.
3. Understand the Denver Housing Market
🏠 Market Snapshot (Q1 2025)
Median home price: $599,000
Inventory: Up 28% YOY (more choices)
Average days on market: 33
Interest rates: ~6.25%
The frenzy of the pandemic housing boom has eased. Buyers now have more leverage, especially if they’re well-prepared and pre-approved.
📊 Prices are stable but still high — making first-time buyer support even more critical.
4. Choose the Right Neighborhood
Denver offers diverse neighborhoods for different lifestyles.
🏙️ Urban Core
Capitol Hill: Historic charm, walkable, mid-range prices
Five Points: Culturally rich, close to downtown
LoDo: High-end condos, nightlife, best for professionals
🏡 Suburbs
Aurora: Affordable, diverse, family-friendly
Lakewood: Balanced amenities, mountain views
Highlands Ranch: Top schools, master-planned communities
🔗 Check out our Work From Home Buyers: Denver Suburb Comparison Guide for a detailed breakdown.
💰 Property Taxes in Denver
Colorado’s property tax rate is low:
Denver County: ~0.55%
U.S. average: ~1.02%
Even with high home prices, lower taxes help offset monthly costs.
5. Build Your Homebuying Team
👤 Real Estate Agent
Even though some consider buying without an agent, it’s strongly recommended for first-time buyers.
Your agent:
Protects your interests
Negotiates on your behalf
Explains contracts and contingencies
Connects you to inspectors, lenders, and title companies
🧑💼 Other Professionals
Lender: Finalizes your loan
Home Inspector: Evaluates property condition
Title Company: Ensures clean ownership
Insurance Agent: Provides coverage before closing
Attorney (optional): Can review your contract, especially if unrepresented
6. Start House Hunting
Use your agent's MLS access and tools like Masterkey to screen listings.
✅ Prioritize:
Location and commute
Age/condition of home
Layout (e.g., home office, future kids)
Nearby amenities
School districts (even if you don’t have children)
Attend showings and open houses. Keep a checklist for comparison.
7. Make an Offer and Negotiate
📑 What’s in the Offer?
Purchase price
Financing terms
Contingencies (inspection, financing, appraisal)
Closing date
Earnest money deposit (1–3%)
💬 Negotiation Tips
Use comps to justify your offer
Request seller credits for closing costs
Focus on major repairs during inspection — not cosmetic fixes
8. Inspection and Appraisal
🔍 Inspection
Don’t skip it. Denver homes may have:
Radon (common in basements)
Aging HVAC systems
Tree root sewer issues (common in older homes)
Foundation settling
Always get a radon test and sewer scope if buying an older home.
🧾 Appraisal
Ordered by your lender. Ensures the home’s value supports the loan.
If it comes in low, options include:
Negotiating price
Making up the difference in cash
Canceling under contingency
9. Closing the Deal
📝 Final Steps
Clear loan conditions
Final walkthrough
Sign closing disclosures
Wire funds or bring a cashier’s check
Receive keys after the deed is recorded
Expect 30–45 days from offer to close.
10. Avoid These First-Time Buyer Mistakes
Skipping pre-approval
Waiving key contingencies (especially inspection)
Ignoring assistance programs
Draining savings completely for the down payment
Underestimating repair and maintenance costs
🧠 Knowledge is your greatest asset. Educate yourself every step of the way.
🎯 Conclusion: Your Path to Ownership in 2025
Buying a home in Denver is no small task — but with the right checklist, team, and data at your fingertips, it’s absolutely achievable.
Remember:
Get financially ready
Understand the local market
Work with a trusted agent
Don’t rush — do your due diligence
Tools like Masterkey can help you evaluate listings, analyze true value, and make offers with confidence.
🏡 Ready to take the first step? Learn how to Save Money Buying a Home in Denver today.