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

• metroDPA:

  • 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.