The process of selling your home in Colorado is simple. However, it can be intimidating, especially when there are legal consequences. The Colorado Contract to Buy and Sell is a standardized legal document. It serves as a comprehensive agreement between a buyer and a seller. It outlines the terms and conditions of the property sale. The contract covers goes over aspects ranging from purchase price and financing details to many other contingencies. If a buyer or seller does not meet requirements within the deadlines of the contract, they open themselves up to litigation or loss of time and finances.
Take these dates and deadlines seriously!
Key elements of the Colorado Contract to Buy and Sell include provisions for property inspections, title commitments, and appraisal conditions. Furthermore, the contract addresses potential issues like repairs, warranties, and seller disclosures. Additionally, it allows for negotiations and amendments to the terms, ensuring flexibility to accommodate the needs of both parties.
It is vital for both buyers and sellers to thoroughly review and understand the terms in the contract before entering into a real estate transaction. Seek legal advice if needed. Real estate agents are NOT lawyers. We highly recommend an agent or lawyer.
Understanding and adhering to these deadlines is crucial for both buyers and sellers to ensure a smooth and legally compliant real estate transaction in Colorado.
The contract outlines the following examples of items. You’ll want to know these before selling your home in Colorado.
Earnest Money Deposit
Buyers submit earnest money within a specified timeframe, solidifying their commitment and indicating their intention to proceed with the purchase. The amount is often about 1% of the purchase price. This check does get cashed and deposited into an escrow account.
Title
The seller typically enlists the title company which will verify the legitimacy of the buyer to transfer home ownership. They look up all documents and history of ownership of the home to make sure no one else has a claim to the property or outstanding liens. Title companies offer a policy and insurance for the buyer.
Owners Association
If your respective home has a Homeowners Association or HOA, you will need to provide copies of the bylaws and governing policies. Make sure that your lifestyle aligns with these rules and community covenants, which may include considerations like permissible pets or other animals, parking regulations, RV usage, and similar land usage.
Seller’s Disclosures
The seller is responsible for providing written information about the home. You will sign the property disclosure, square footage disclosure, and other forms that provide information that you’d want to know as a buyer for the home. It’s important to disclose everything, even if the issue has been repaired.
Loan and Credit
The buyer will submit the written contract offer to the lender, and they will initiate the loan application process. They will provide required documentation, such as a driver’s license, social security number, income verification, W2s, bank statements, proof of funds, etc. The items will need to be submitted by the buyer to their lender as soon as possible so they can quickly process the loan. Any missing paperwork can cause delays in closing.
Appraisal
The lender will order the appraisal. The appraisal fee is typically collected upfront or at closing. This amount can vary depending on the lender. The appraisal determines the value of the home. If the offer is more than the appraised value, the buyer will need to bring more cash to closing or renegotiate the purchase price. The lender orders the appraisal and any delays on this can delay closing.
Survey
The buyer must review and may object to any issues identified in the survey by this deadline if a survey is required. A survey confirms the boundary lines and legal description of the property. It also discovers other restrictions or easements on the property. You want to ensure what you own, is actually what you own.
Inspection and Due Diligence
An inspection objection is due within a week or two of going under contract. It’s the buyer’s responsibility to schedule an inspection within a couple of days of going under contract to meet this deadline. An inspector will come out and look at the house and inspect it. There will be tests and inspections performed by the buyer such as a sewer scope, mold, and potential geographical hazards. The buyer will get the report back and negotiate any repair items if necessary. The buyer incurs these inspections and fees unless it’s a VA loan regarding pest inspection. Expect to spend anywhere from $700 to over $2,000.
Due diligence items are any items that may have come with the house or information on the house such as manuals for appliances, building plans, etc. Any information you have that is helpful to the buyer should be disclosed, including flight paths, hazards, or the like.
Property Insurance Objection Deadline
Buyers who are obtaining a loan are usually required to secure property insurance. This deadline is the timeframe by which the buyer can object to the terms or cost of property insurance. If issues arise, the buyer may negotiate or terminate the contract. One example would be not being able to obtain insurance in wooded areas. Additionally, an insurance company or lender may require conditions.
Closing and Possession
Congratulations! It’s closing day! You will sign lots of closing forms. Closing can take anywhere between 15-30 minutes. Then you can go home to your new house! Unless there is a post-occupancy, the buyer can move into their new home as soon as all the paperwork is signed, funded, and completed.
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