Understanding the True Costs of Buying a Home in Denver’s Luxury Market

Understanding the True Costs of Buying a Home in Denver’s Luxury Market

Buying a home in Colorado — especially in Denver’s luxury submarkets — is an exciting and complex process with many moving parts, expenses, and considerations. Whether you’re investing in a modern townhome in LoHi, a classic bungalow in Sunnyside, or a lakefront property in Sloan’s Lake, understanding the true costs of purchasing will help you make confident, informed decisions.

At Highlands Property Group, we guide clients through every stage of the buying process with transparency and strategy — ensuring you not only find your dream home but make a sound long-term investment.

Breaking Down the Costs of Buying a Home in Colorado

Home purchase costs typically fall into two categories:

1. Out-of-Pocket Expenses — upfront costs such as inspections, appraisals, and earnest money deposits.

2. Closing Costs — costs wrapped into your loan, such as title fees, lender charges, and taxes.

Let’s break down what to expect in each category — and how to approach them like a savvy investor.

Out-of-Pocket Costs Every Buyer Should Expect

When purchasing a luxury home, due diligence is essential. A thorough inspection and appraisal protect your investment by identifying risks early and confirming the property’s true value.

Inspection Costs and Due Diligence

While inspection fees may feel like an added expense upfront, they are one of the smartest investments you can make in the buying process. My approach is always to help clients make data-driven decisions and avoid future surprises.

Here’s what to consider during your inspection period:

1. Choose the right inspector. Your agent should connect you with trusted, experienced professionals who specialize in high-end homes.

2. Use a third-party expert. A neutral, independent inspector will give you an honest assessment without influence from the seller.

3. Own the data. You want to receive the full inspection report directly — not filtered through the seller or listing agent.

Specialized Inspections Worth Considering

Beyond the general inspection, there are additional evaluations common in Denver luxury properties:

• Sewer Scope: Confirms the condition of underground pipes — especially critical in older Highlands and Jefferson Park homes.

• Radon Testing: Colorado’s radon levels are among the highest in the U.S.; every home should be tested.

• Mold Inspection: Detects hidden issues that can affect air quality and long-term value.

• Lead-Based Paint Testing: Vital for older homes built before the 1980s.

• Structural Engineer Evaluation: Recommended if foundation, support beams, or prior damage raise concern.

• Pest Inspection: Often required for VA or FHA loans, though valuable for any property.

Each test adds peace of mind and protects you from costly repairs later — especially important when purchasing a luxury or investment property.

Appraisal Costs in the Colorado Market

The appraisal verifies that the property’s market value aligns with your loan amount. Appraisers are assigned by your lender and operate as neutral third parties.

In Colorado, buyers typically pay this fee out of pocket — usually around $700, depending on the property size and complexity.

At Highlands Property Group, we advise clients to budget approximately $1,500–$2,000 in out-of-pocket expenses prior to closing (in addition to the earnest money deposit, typically 1% of the purchase price).

These figures can vary based on the property and the scope of inspections, but they’re essential for planning.

Closing Costs: What to Expect at Settlement

Closing costs are the final layer of your investment. These fees can include:

• Lender fees (loan origination, underwriting)

• Title company charges

• Escrow and prepaid property taxes

• Homeowners insurance premiums

• Recording and transfer fees

Your lender will provide an official estimate during underwriting, but closing costs typically range from 2% to 4% of the purchase price.

Why Who You Work With Matters

Every real estate transaction has nuances — and in luxury markets like the Highlands or Sloan’s Lake, negotiation and strategy can significantly impact your total costs.

With a decade in commercial real estate, I bring an investor’s mindset to every deal. My clients value that I think beyond the home itself — considering market trajectory, resale value, and the financial strength of the asset.

Whether negotiating inspection credits, lender concessions, or repair allowances, I ensure every dollar serves your best interests.

Final Thoughts

Buying a home in Denver’s luxury market requires more than just a strong offer — it requires insight, negotiation, and the right guidance.

At Highlands Property Group, we combine deep neighborhood expertise with investment-level analysis to help clients make confident, strategic decisions in every stage of the home-buying process.

📩 Ready to begin?

Contact Highlands Property Group to schedule a consultation or complete our Home Buyer Intake Form to start your search