Although attorneys control much of the real estate transaction process across much of America, Colorado policies differ significantly from those of other states. Certain powers and privileges granted to Coloradan real estate brokers have meant that lawyers are largely removed from the equation, making it doubly important for local buyers and sellers to know precisely what’s happening before they close.
Powers and Privileges
The critical difference between Colorado and the rest of the country lies in the fact that local brokers have the power to fill out standardized forms from the Colorado Real Estate Commission. While the forms themselves are simply a series of blanks to be filled in and boxes to be checked, this task is traditionally the responsibility of authorized attorneys. The most significant of these is the purchase-and-sale contract form, which legally binds the signers to the transaction.
The Colorado purchase-and-sale contract is available freely for download at the Division of Real Estate’s website. Standard fields like Name and Date are fairly self-explanatory, but the form has a few nuances that may not be obvious at first glance. There are options for how the buyer will acquire the title, as well as a plethora of small details that have a significant impact on the property actually involved in the sale. Paragraph 2.5.3-4, for example, details any liens against personal property such as appliances, while the subsequent section lays out usage and ownership rights for parking or storage structures.
Issues and Changes
As with any living document, the form is consistently reviewed by the state Real Estate Commission. The panel may choose to radically alter the content — addressing issues caused by past property use, or detailing the exact impact of subterranean water availability — or simply fine-tune its features. The 2016 revision is mostly the latter, with one significant exception: explicitly required disclosure of “any latent defects known by the Seller” to the property buyer. “Latent defects” are defined as any issue that would not appear in a non-invasive property inspection. Additionally, the latest version also provides guidance on next steps for transactions where a property’s appraised price comes in at a lower figure than the one point entered in the contract.
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