IN Colorado, most residential real estate transactions are completed using the Colorado Contract to Buy and Sell Real Estate. I say most, because frequently, new construction developments use their own contracts.
AS part of my real estate Buyer Agency services, I always explain the contracts you – my client/s – are going to sign. After all, the contracts have legal consequences.
GOOD place to mention an important aspect of this contract and a real estate license. Real Estate agents have the limited right to fill in a contract. The contracts themselves are written by lawyers. And in every transaction, home buyers and home sellers can retain legal and tax counsel – see section 20 – Recommendation of legal and tax counsel.
Property Address and Legal Description
THE first page of the contract identifies the home, condo, town house – dwelling. If you are purchasing land, there is a different, distinct version of the contract to use.
IT’S important to double check this information is correct. In hot markets, such as the one we are experiencing in the first quarter of 2021, you don’t want to make a small mistake that one party could use to legally terminate on the other – which happens when houses start selling for tens of thousands over list price.
Inclusions And Exclusions
BEST to check with your Boulder realestate pro if the Seller is leaving this or that. Some things such as mirrors, used to always be included. If there is something important to you – add it to the inclusions list. Be mindful, a home seller may want to exclude an item for sentimental reasons. And hey, you can always get new appliances!!
Dates, Deadlines and Applicability
THIS section isn’t in every contract in every state. I think it is one of the best parts of the Colorado Contract To Buy and Sell Real Estate. This third section of the contract lays out in space all the contractual deadlines. Very handy. Keep in mind, with counter proposals, sometimes the dates are in two different locations.
IN general though, on pages 2 and 3, you’ll be able to see exactly the dates on your contract.
Section 4 – Purchase Price and Terms
WHAT will you pay for the place? Check additional provisions, because in a hot Seller’s Market like the one gripping the Colorado Front Range today, you may find an escalation clause or other sweeteners to bring a deal together. Winning against multiple offers can be a real endeavor.
THIS section will discuss the loan type, earnest money, cash at closing. Pro Tip: when it comes to getting your funds to the closing table, be aware of wire fraud. Protect yourself. This is a real issue in Colorado.
Appraisal Gap Is The Latest Bargaining Chip
THESE days, it is more common than ever for a home buyer to guarantee the difference between contract price and appraisal. Is this the right direction for you? Let’s discuss the pros and cons of covering an appraisal shortfall and why it happens.
APPRAISALS are not inspections. Although FHA mortgages do mix the two a bit. Helping you in understanding the difference is part of my job as your Boulder real estate agent!
That’s part one of this blog. Check back for more. ~ Bob