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The scope of how real estate works in Colorado is quite vast. On the rental side of things, landlords need to understand and abide by landlord-tenant laws and rights on their end if they don't want to end up facing potentially steep consequences.
Then there are real estate contracts on the purchasing side of the residential property equation. Here, you have to think about disclosure statement requirements such as the common interest community one, among others.
It can seem like a lot to take in if both the purchaser and seller want their sale agreement to be valid and enforceable.
Luckily, the information below covers the necessary bases of purchase agreements, which should help you ensure that you have nothing to worry about.
Colorado Purchase Agreement
Note that the format of a Colorado residential purchase agreement is provided by the Colorado Real Estate Commission. However, since you are dealing in real estate, it's always encouraged to know all the details the prospective buyer and seller will need to cover. Typical items you will see to this end are:
- Purchase price of the residential property
- Names and contact information of both the prospective buyer and seller
- The condition of the residential property
- The effective date of the sale contract
- Conditions that must be met
- How financing for the sale agreement will take place
- Signatures of the parties involved
Real Estate Broker
A Colorado real estate broker is often involved in purchase agreement transactions, but this is not mandatory. Note, however, that having a broker does allow for a sense of comfort since expertise is brought to the table that will help navigate the dealings smoothly.
Required Disclosures
Purchase agreements will have a subset of elements such as the property's condition as indicated above. However, some states will require that sellers provide added documentation.
This could be to confirm the condition or it could be to make additional required information available to a prospective buyer. In Colorado, there are several mandatory requirements to this end, which are as follows:
- Seller's property disclosure statement - This is an official form used in Colorado. It aims to keep buyers informed by notifying them of any issues that could either be a risk to safety or get in the way of the expected enjoyment of the home.
- Methamphetamine laboratory disclosure - If the seller is aware that the property was once used for the production of methamphetamines, then this disclosure statement will be required.
- Potable water disclosure statement - The source of water must be disclosed by sellers.
- Green disclosure form - This form will see the seller highlight any issues or property additions that are energy-related.
- Special taxing districts - Some properties that are the subject of a sale agreement may be in a special taxing district. If this is the case, the seller is required to disclose that information to the buyer.
- Common interest community disclosure statement - Like the previous point, if the property is in a common interest community, this must be disclosed by the seller. Additional information such as required memberships and policies will also be included here.
- Transportation projects disclosure statement - Should there be any proposed transportation projects that may affect the property that the seller is aware of, they should be disclosed.
Bottom Line
A Colorado residential purchase agreement has several considerations that must be made before it is put forward if it is to be made legally binding.
This is a good time to mention that hiring an attorney who is experienced in the real estate laws of the state is probably a good idea. That way, there is no need to burden oneself with covering all the bases.
As you can imagine, addressing all these details will mean there's quite a bit of documentation to deal with. This means that you will need the right forms. Thankfully, Doorloop has gone the extra mile to ensure that you have all the Colorado real estate forms you need. These are accessible here.
Webinar
DoorLoop hosted this webinar with attorney Michael Larranaga from Larranaga Law to help answer many of your legal questions. Michael specializes in real estate law in Colorado and we covered:
- Creating a residential lease agreement
- Landlord-tenant issues and laws
- Grounds to evict a tenant
- Eviction process
- Preventing delays or fines
- Hiring an Attorney vs DIY
- Post COVID legal changes
- Security deposit laws
Feel free to learn more and watch this webinar for free.
FAQs
Is a Seller in Colorado Allowed to Cancel a Real Estate Contract?
Yes. A buyer will typically have contingencies that need to be met for the contract to be enforceable. If these are not met, then an out is possible. Additionally, where anomalies such as an estate sale are present, these will allow for an exit.
What Happens if the Required Disclosures Are Not Made?
These disclosures are required by law. Therefore, if they are not met, the purchase agreement cannot be legally enforceable.
What Are Some of the Recommended Elements of a Colorado Real Estate Purchase Agreement?
While there is typically some level of creative freedom with these agreements in other states, elements such as the details of the parties, purchase price, conditions, closing date, and signatures should never be left out.
Since the Colorado Real Estate Commission's contract is used here, this is all handled.
What Is the Purpose of the Colorado Real Estate Commission Contract?
The contract is mandatory for buyers and sellers, which means they do not write their own. It is meant to capture the relevant details of the upcoming deal.
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