How to sell real estate in colorado
Understanding the Colorado Contract to Buy and Sell Real Estate for Homebuyers
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hey I'm Creed with homebuyer University
well today we're finally going to get
around to the Colorado real estate sales
contract also known here contract to buy
and sell real estate residential so if
you want to buy something other than a a
home a town home or a condo you'd be
using a different contract but this
takes care of about 95 percent of most
home buyers needs as always this has
been approved by the Colorado Real
Estate Commission as you see on the top
and this form has legal consequences and
the party should consult legal and tax
or other Council before signing
nothing we ever talk about here is is
legal or tax or accounting advice
it's not engineering advice either even
if we sneak into that a little bit this
is just good information coming from a
longtime broker
designed to help you stress a bit less
as you're trying to purchase a home
search and purchase for your home starts
off sounding very simple and agreement
buyer agrees to buy and sell or agrees
to sell the property described below
on the terms and conditions set forth in
the contract
sounds simple
but I promise you this is going to get
long and hard so what we're going to do
is I'm going to give you a really sound
and solid overview of the contract but
they're going to be particular areas of
this contract that are going to be part
of a separate course otherwise we would
be here for hours the the real estate
brokers take the uh course on contracts
typically about every year and it's
three hours long and it usually just
covers the changes in the contract not
the entire contract so you don't want to
live through that I'm going to give you
a great overview some real life
scenarios what I think is some pretty
good advice
every seller every home buyer every home
is a little bit different so this is a
good overview but your situation will
probably need some adjustments okay fair
enough
let's just real quickly talk about this
joint tenants and tenants in common this
is how you can take possession of a home
you're typically going to be living in
joint tenants is often a married couple
but it could be otherwise and it simply
means that you both own 50 of the home
and it's indivisible in other words you
can't sell one half and somebody else
buy it and move in whereas tenants in
common the second choice that's actually
how you could do it uh you could own
one-third your partner could own
two-thirds and at some point they could
actually sell out their two-thirds to
somebody else so just kind of keep that
in mind as you're looking at things
property
what goes in this blue box is the legal
description of the property and that's
how all of the documents are processed
that's how title companies ensure you're
getting a free and clear title and any
problems that occur is going to be based
on that legal description yep we're
going to put an address in here but if
there's a conflict in legal documents or
research or anything on the home
the legal description is going to
supersede the address so if one or the
other is wrong
this one is what everybody's going to be
using and you could actually purchase a
property that you thought was a
different property so you want to make
sure that your broker gets in the
correct legal description we're going to
just barely touch on a few of these
things but I want you to be aware of
them essentially inclusions are things
that are going to go with the home that
you are purchasing and it's really
important to define a few of those and
this starts off doing that for you these
are considered inclusions unless
somebody excludes them which would be
the seller
there's inclusions that aren't actually
attached to the property now you might
be looking at things like curtain rods
and fireplace inserts and think yeah
that goes with it well officially it's
not attached and so it's really good to
have that defined in the contract
and then anything specific other
inclusions you would put in this box and
you know that might be like a uh you
know a shed on the back corner of the
lot or anything that that could go along
that with that maybe a swing set right
is it attached to the house no did you
think it was going with the property
yeah
but let's make sure and Define them okay
so we're starting off fairly simple
uh we won't really touch this but an
encumbered inclusions could be things
like solar panels or uh security system
things that are kind of leased from a
third party something like that parking
and storage facilities this one gets to
be really important with condos and
Townhomes
your parking spot whether a signed or
open parking
may or may not go with the property
there's a really good chance if it's
open parking that is part of just the
community
and if it's a signed it may or may not
be actually conveyed or or sold with the
condo or townhome that you're purchasing
you want to check that and know that for
sure and if so man you want to put in if
there's a legal description for it and a
parking number for it and so on and so
forth those parking numbers might change
from time to time
based on just the need of the community
manager and and the residents so if
there's some sort of legal description
within the deed of the property you're
buying make sure that gets in here okay
here's where other exclusions could be
we're not going to touch too much on
water rights and well rights most of the
the clients that we have are going to be
buying a property and a subdivision and
their Waters coming from a a public
facility of some sort okay if you're
probably buying a property with well or
other water rights then you need to go
into that a little more specific
paragraph three this is a biggie this is
where all of the events that are going
to happen in this pretty much entire
contract are listed it's almost like a
table of content or a index of what's in
the contract and keeping in mind this
contract is 19 Pages a fairly small
print I've got you up on a big old 42 42
48 inch I forget how big the screen is
it's a big screen and I've got it blown
up when you see this in real life this
is small print
and so the best way to treat this and
let me use one good example and the
example we're going to use is the
inspection contingency
and we're going to we're going to scroll
down to that in just a minute that's a
paragraph 10 series and what you need to
know is when it says reference see where
it says reference right here and this
little legal symbol what that's doing is
it's telling you that this particular
event that you're putting in a time or a
deadline for okay is related to this
paragraph series within this contract
okay and we're gonna let me show you a
really quick example so you understand
the concept and then we're going to come
back up
paragraph 10
and that's a series of paragraphs you'll
see quickly
has to do with the seller's property
disclosure okay and we're going to
scroll down to to paragraph 10 as
quickly as we can it also has to do with
the inspection and a bunch of other
things and that's why we're going to use
that as an example
bear with me it's a long document and
you should never take this lightly
by the way this is only about halfway
through the document
and we're just getting to paragraph 10.
they talk about the properties sellers
property disclosure that will we're
going to mention that but that is going
to be a separate uh course it's it's too
complicated it would take too long to
pull that out now but we are going to
talk about the inspection use that as
our example so this is paragraph 10 just
like we expected but see how long
paragraph 10 is
it's got a lot of sub paragraphs right
you see all this yeah but you can use
that front uh that page three page four
depends on where the paragraphs break
off that dates and and times and
deadlines
that is your table of content and
there's so many important things in that
and we're going to come back to it a
minute but I want to show you an example
so let's talk about just the inspection
portion of paragraph 10.
whenever you buy a home don't rely on
your broker to know everything about it
don't rely solely on the homeowners the
the home sellers property disclosure
you should almost always get an
inspection a third party inspection but
let's let's stop for a second I don't
want to complicate this too much we're
going to talk about it in depth in a
separate video
separate part of the course
but a general home inspector doesn't
know everything and so if they see
something they don't like
or might be iffy on a roof heating
electrical
Foundation matters so on they're going
to say now go get an expert that
specializes in that so we'll we'll cover
that more in depth when we get to the
inspection phase let's use this as an
example
so up on pages three and four
uh we had that whole series that uh kind
of like an accounting grid there of
events
and then deadlines okay and we're going
to use this as just one example but then
it relates to many of the other
processes for many of the other uh
things and deadlines that you have to
deal with essentially we call them
contingencies which means the home cell
is based on those items being
satisfactory by a specific date or it
gives you an option to renegotiate or
get out of the contract and we're
getting a little bit ahead of ourselves
so within that that grid section of of
dates
there might be something in there for an
inspection termination and I'll touch on
this one really quick we'll go deeper on
the outside video
let's say the seller says you know what
I'm selling strictly as is I'm not going
to negotiate any kind of inspection then
what your broker's probably going to use
is this inspection termination which
says we're going to look at the property
the home buyer is and we'll either say
yes or no based on what we find and
that's all there is to it now let's go
down here so we understand our our dates
a little bit better that that's kind of
off on its own
and then the inspection inspection
objection and an inspection resolution
is a different system if you will here
there's going to be a specific date in
that grid that states you will have
conducted an inspection and reviewed the
results by X date let's say it's 10 days
from contract
okay
then you're going to have a grid in
there that says inspection objection and
let's say that's 12 days from contract
so you got this done there was something
in it within those 10 days
and before the 12th day these will be
actual dates in most cases
you're gonna say listen we found out
some electrical problems and some
heating plumbing problems you're going
to list those and you may or may not
include the actual inspection report
and you need to do that before that date
expires
if you do that before the date expires
it opens up negotiations
if you do that after that date has
expired you have waived the right to
that inspection objection does that make
sense
if you do it within your time frame
you're you're moving right along if you
accidentally miss a deadline that is
legally saying
I've waived the right to have anybody
deal with this for me
so you do your inspection 10 days you
object within the 12th day and you'll
put within the objection how many days
before uh you and the seller have to
come up with a resolution on how you're
going to handle this
are they going to have those things
fixed and are they going to be fixed by
a licensed person or group of people if
it's different items or are they going
to give you some money at closing to to
compensate you for those okay
if the seller signs off on on your uh
inspection resolution and accomplishes
those tasks you're good to go
keep in mind that the seller could say
you know what you sent over this
objection
I don't want to deal with any of that
then what happens
you either with a draw
your objection before the end of this
resolution period okay and say okay
never mind I'll take it as is or
you just let the whole contract expire
right or you go ahead and file an
official notice that that you're going
to dissolve the contract and that's why
all these dates work so let's roll back
up there yep it's a long contract we
only had gotten about halfway down
and you can see all the stuff this is
why I've got to keep this as uh basic as
possible
okay
so we're back up here and this is Paige
I'm sorry I said three and four is page
two and three uh this happens to be
paragraph three so each one of these
let's go ahead and find our inspection
information we just talked about these
three items
if we were going just as I buy it or I
don't buy it based on what I see you
would have used this
if you wanted to get a inspection and an
opportunity to negotiate based on the
outcome of that inspection you would put
these dates in there so this would have
held that 10 days out it would actually
be a fixed date often
and then we would have the inspection
objection in our case we use 12 days out
and then we would have an inspection
resolution deadline and let's say you
had gone to 15 days either you and the
seller come to terms written terms on
how things are going to be handled based
on your inspection or this contract can
be dissolved
sound sound fair and that's pretty much
how all of this happens and again this
is like your table of contents now not
everything is going to be an exact date
order like this is date one day two day
three day four be careful there
but anything that's in here
anything that's in here is a drop dead
date you either have it by that date
you've either responded to it by a date
or you have give some sort of a a
resolution option date or there's a date
in there that says okay at this point
I'm just gonna dissolve this contract if
I can't work out any of these things
gets complicated quick we're just going
to touch on them
um kind of time of day deadline by the
way the whole contract defaults to uh
when you say a whole day the first say
the first of January
um actually it's a holiday let's say the
second of January if that's a business
day weekday
this would go all the way to 11 59 and
59 seconds p.m just before midnight you
can put in here and change that and say
you know what everything has to be end
of day is 6 p.m or 8 P.M otherwise on
each one of these dates that come up if
you don't have something until 11 59 PM
you'll be waiting up to see if it comes
in and if you still have a home deal
okay
alternative earnest money deadline all
that means is
you're going to give earnest money
typically to a title company
often predefined in the multiple listing
service but not always you're going to
give earnest money that just shows
that you are truly interested and
capable of buying this home this third
party entity is going to hold that
earnest money and then you'll be
credited that back at closing toward
your closing costs
uh record uh title deadline and tax
certificate that's the date by which the
owner the seller has to get to you
title work which explains you know any
encumbrances on the property any
problems any really it's up to you but
you may want to have an attorney look at
that your broker will be happy to look
at it
they don't have the full authority to
give you opinion on that title
commitment whereas an attorney does
that's an extra expense though okay
here you would have an objection
deadline in other words if there's
something in there you don't like you
would say something and here this is off
record title deadline this is when the
seller's supposed to tell you of
anything that could affect the purpose
and use and enjoyment of the property
that has not been recorded at the
courthouse or the county okay and you
also have a chance to object to that and
then there's this title resolution
deadline which means what
this is the chance to fix this between
you and the seller and if you can't come
to terms and you can't live with it this
is your time to go ahead and dissolve
the contract okay
same thing Homeowner Association you're
buying a home but you're buying into the
HOA if there is one and you have to live
within their rules and their demands and
their fees and so you want to get all
those documents you want to review all
those documents and you want to speak up
if you're not happy with those now the
seller can't fix those for you typically
so that might be a drop dead for you and
that's something to consider every time
you you look at a home seller's
disclosure that's going to be a separate
item you can see how long this is taking
already and that's where they tell you
what they think they know about the home
and on a piece of paper is what it comes
down to
you're going to apply for a new loan in
many cases and there's certain deadlines
to meet on all of those items
almost always there's going to be an
appraisal involved the appraiser is out
there to uh
as a third party
State what they think the home is worth
and you might think well that's great
protection for me it's it's not it's
great protection for the lender that's
all they care about is this house worth
the amount of money we're going to lend
on this and your contract will actually
say is this home appraising at the price
I am uh offering and if it doesn't
if it's over great if it's under then
you have a bunch of hard decisions to
make that's going to be a separate video
you see how fast this is adding up
um we're going to talk about surveys and
inspection location certificates
essentially that's the type thing where
is your property encroaching on somebody
else's the defense go on somebody else's
property that the shed end up on
somebody else's property so on and so
forth and vice versa did somebody else's
fence uh cut your backyard in half or at
least a corner of it off
and there's all those contingencies all
those deadlines all those dates you've
got to watch this stuff like a hawk you
have to live and die with these dates
while you're under contract with a
property
and this just continues on down the road
for the inspection due diligence due
diligence is kind of separate from an
inspection let's say the seller's
advertising brand new pool just put in
the spring
you want to know if that's a by pool I'm
talking about a you know dug in
underground you know pool you want to
make sure that all the permits were
pulled and so on and so forth you'll put
that in your due diligence documents or
if you have a finished basement and
County records does not show a finished
basement you want to find out what's
going on you'll put that in a due
diligence there okay and finally we talk
about when it's going to close and
possession date and time and
you're done actually no all you've done
is outlined everything else that's in
the rest of this contract one last thing
on the date and deadlines
if any deadline is blank in 3-1
this monster here
the whole thing is three one so if any
of these things are blank
blank or completed with n a as a
non-applicable
or the word deleted
is put in there so if they're blank n a
or deleted
you've essentially waived that as part
of the purchase so if you accidentally
put in here
that you know you want to do an
inspection
actually it's up a little higher
inspection objection and you
accidentally leave that blank
you're saying in the contract you're
waving that right so you really want to
watch that that grid pattern a lot
finally we're going to get down here and
talk about things like the purchase
price which you thought was the most
important thing before you sell all that
stuff
so what this does is this should add up
here and here should be the same amount
so we're going to use a non-existent
price in metro Denver Colorado of one
hundred thousand dollar purchase price
so that'll be here and this will be down
here by default and all the stuff that
happens in here should add up to one
hundred thousand dollars so you have
your earnest money and let's say you you
set aside five thousand
and you've got a new loan and let's say
that was for eighty thousand
and what's left you're not assuming this
we're going to do a new loan purchase on
this one you're not private financing
the seller's not going to cover it for
you
so what would have to be in here
we've got
a hundred thousand earnest money five
new loan 80.
to get this to a hundred thousand what
do we have to have we're gonna have
fifteen thousand in there and so that
gives you an idea of how that whole grid
works
now we're going to really try to speed
this up seller concessions you can ask
the seller to help you cover certain
closing costs
that is something we want to talk about
with your lender if you're getting a
loan
there's going to be certain limits and
criteria on what they will accept
somebody else paying on your behalf work
with your lender specifically on that
okay this mentions it could be applied
to all these things check with your
lender okay there's things that come and
go and change and certain underwriting
standards don't risk it check with them
there's a lot of stuff here that talks
about your earnest money and when it
gets applied to closing that means
everybody was happy and everything got
fulfilled
when you get into dissolving the
contract within the covenants or
agreement of the contract
sometimes parties get into dispute
that's going to be a separate video
you're starting to catch on how fast
this adds up so this talks about it but
we're going to go into more detail on a
separate course different video
and it talks about all these things if
you fail to do certain things that the
seller fails to do certain things I'll
this would be a 10 hour class if we
touched all this overall you're going to
be paying for your own loan costs your
own inspection your own appraisal it
adds up quick get bids get a an estimate
of costs up front so you don't run out
of cash and you don't get caught by
surprise now obviously if you've built
into the contract that the seller is
going to help you out that's great that
helps
sometimes they're willing to do that
sometimes not and usually if they would
are willing to help you they may not be
willing to negotiate price or repair so
be careful it's all negotiable and
you'll have to balance out what's most
important to you
uh loan estimate and monthly cost always
always always get that from your lender
they're actually required to get that to
you now
and it talks a little bit more about
that but that that's the loan estimate
don't worry about this stuff I am not as
this is not about assuming the seller's
loan this is not about having the seller
finance it for you if you're in that
situation you'll want to talk
specifically to your broker and probably
an attorney to make sure you're covered
on that we're just talking about new
loan right now
new loan application you're actually
required to to apply for that loan and
get your lender and their underwriter
all the stuff they'll demand and it'll
be a lot of stuff and you'll hate doing
it but you have to do it new loan terms
and new loan availability you get a
chance to review those things as long as
it's what
within the date drop dead date deadlines
right you get a chance to review all
that stuff and you
can decide if you're going to buy the
home based on those terms and based on
those costs and if you don't want to do
that then what you want to do is reject
all of this and dissolve the contract
within that drop dead deadline for you
to do so see how important those dates
are
and as far as appraisals go again the
appraiser goes out to protect who not
you your lender
and the conventional style loans the FHA
Federal Housing Authority
and veterans administration loans all
have slightly different criteria
just know what sort of loan you're
likely to be going with
sometimes people start with a
conventional and have to move over to an
FHA to get easier terms and that entails
a whole different amend extend over to
the seller they have to approve that if
you decide to do that but for right now
these are the rules at which your your
home must appraise and in most cases it
would need to appraise at the price
you're paying or you need to decide how
you want to proceed if you want to
proceed or dissolve the contract okay
cost of appraisal
pretty much always you as the buyer you
can ask the seller to pay for it but the
the appraisals covering your lender and
you hired the lender so don't don't
think the seller's going to do that
without a little bit of coercion
we talked a little bit about HOAs
common interest Community Homeowners
Association whatever you want to call it
there's a lot of information here we're
just barely touching on it but you want
to get a copy of those documents and
their financials and the fees they
charge and what rules you have to live
within you know if you like pink and
greenhouses and they say you can't have
one you need to know that and you want
to make sure they've got money in the
bank and they're not about to go
bankrupt or hit everybody with a ten
thousand dollar you know extra
fee to stay liquid in the neighborhood
you're going to want to get all that and
when do you want to get that by the date
at States way up in paragraph three when
you must have it when you want to review
it by the date up in paragraph three and
if you have a problem or an objection
when you want to do that by the
objection deadline in paragraph three
see where we're going with this the
whole contract rides on that whole
system
and this is all conditioned on your
buyer review and you can say I am
unhappy I won't go forward in your sole
subjective discretion that happens
several times in this contract but it's
going to happen by that date and it's
pretty much always got to happen in
writing if you want out of this deal
okay
this one here Title Company we're going
to just barely touch on it you can have
the seller select the title company in a
way this often works is when the listing
broker goes to work for the seller they
often agree on a title company and there
will be something in the MLS multiple
listing services says you know seller
has chosen
XYZ company title Please make the
earnest money to them if you're not
happy with that
you can override that by purchasing your
own
title insurance but you would be paying
for it or down at the bottom of this
contract you can say you know what I
want to select it
but I want the buyer or the seller I'm
sorry I want the seller to pay for it
you'd have to put that in additional
provisions and see if you could get it
to float is that
what is title insurance this is a third
party company that investigates the
title The Chain of ownership and any
known encumbrances or problems with the
property
and then they insure to you
that it's free and clear except those
items they have listed and usually those
items they have listed are things that
get taken care of at closing like the
loan the seller the current owner has on
the property that gets paid off at
closing typically the title company is
going to prepare all the closing
documents and also work in collaboration
if you have a lender to get all of that
handled and integrated so it's it's
pretty important and you can choose the
title company but just be aware it may
entail you having to pay for it or
negotiating with the seller to let you
choose and they pay
keeping in mind that there's going to be
a sub Clause to that insurance
that you are still going to pay a a
premium for your lender to be covered so
essentially you would be paying twice if
you take on the full uh expense on that
I didn't mean for that to go so long
again if you respond within the dates of
the contract you have the sole
subjective discretion to say yay or nay
on this thing
off record title stuff that the seller
knows about that's not recorded with the
county
special taxing districts this is
important
it's going to be a separate video and
what happens is in the old days the
actual cities you were building in or
not you building but the developer built
in
would cover the cost of water sewer you
know streets whatever it was and then
tax you to recuperate that a lot of
cities found they couldn't afford that
and so they went to outside companies to
fund that sort of development and those
outside companies have rights and the
special taxing district thing can be a
little bit scary that's going to be a
separate video
just because you see how long this is
getting and again there's going to be a
title resolution deadline
as with everything else
and we've almost we've kind of touched
on this new ilc or new survey if anybody
has a concern about your lot lines
whether you've gone over them or
somebody else is encroached over onto
your property they're going to order
this up
and yes they'll ask you to pay for those
property disclosure the seller is going
to fill out a series of pages saying
what they know about the property it's
good information
but you can't rely solely on that now a
seller can't hide anything that they
call a material defect which is a kind
of a big item you know something
important that would really affect the
the home
it's not that the back door porch lights
burned out you know they know there's a
foundation problem they know there's
some electrical wiring that gets overly
heated that sort of thing okay now it's
not their job to do an inspection
but if you can prove that they knew
about it such as you know what we've had
electricians out three times in the last
two years and uh every time they said to
replace the wiring and every time we we
didn't want to spend the 25 Grand then
you've kind of got some proof but that's
kind of uh it's legal stuff
so I'm not giving you legal advice on
that I'm just giving you an example
so you talk about the inspection you
should almost always do it remember we
use this as our Dateline example do this
on a certain date have this done by a
certain date gives you the opportunity
to resolve it by a certain date and if
not then let's look at that right now
the inspection resolution deadline
passes
by executing an earnest money release
so if you're not happy about the
inspection or various other parts of
this contract and you're dealing with it
diligently and you dealt with it by the
dates you were supposed to and you gave
notice by the dates you were supposed to
you should be getting your earnest money
back now again that's moving toward
legal advice we're going to talk about
that in a separate uh separate video
separate course
insurability and I know I'm wearing you
down
just a big overview today insurability
is becoming big
make sure you get a bid from ideally a
couple of different insurance carriers
to make sure that that home is insurable
we've had a lot of fires in in Colorado
and sometimes it's in subdivisions
nobody ever expected like a big forest
fire you know up in Boulder they had a
whole subdivision taken out by a fire
things that didn't used to happen happen
and if you can get insurance it might be
a lot more than you expected so it's
important to look at that stuff get some
bids
this has to do on often rental
properties so don't worry about that
right now
due diligence we touched on those are
special things that you want to deal
with we'll talk about water issues in a
separate video you're going to get a
source of water addendum and it's going
to say where the water comes from
in town it's usually from a specific
entity up in the mountains or Plains it
could be a whole different story with
Wells and so on
um we'll go into a different video on
that stuff
carbon monoxide you know it's a it's a
law the the seller has to have carbon
monoxide alarms and uh within X number
of feet
I've lost track I think it's five feet
of a bedroom door
um sometimes they're in in my house
they're not only in the hallways but
they are in each bedroom
I believe
I've got either 11 or 13 of them and
they're all wired together
and they're a smoke alarm and carbon
monoxide and when they go off all of
them go off and there's some recorded
lady
that starts yelling and it is the
loudest thing on the planet and you you
definitely want to dive out the windows
when she starts screaming
transfer title we'll touch on this real
quickly but this is getting into legal
stuff this is for your general knowledge
but a special warranty deed is
essentially the seller saying you know
what we're we're guaranteeing that
there's no stuff that's bad stuff that
could affect your enjoyment of the
property has happened since we owned it
General warranty deed says we're saying
the same thing back all the way in time
okay
Beyond when this seller owns it and
there's some other types of deeds and
stuff we won't go into those but just
kind of keep an eye on that stuff
uh we're not going to talk about some of
the transfer taxes but we are going to
talk really quick this is a separate
video course I'm sorry this isn't this a
little bit frightening are you kind of
glad you're suffering through this right
now because otherwise if the first time
you see this thing is the night at 10 30
when you're trying to get an offer in on
a house and you're going
terrified I'm signing my life away with
no knowledge of what's going on here so
that's why we're doing this that's what
the home buyer University is all about
so you don't have that stress
ferp to
the internal revenue sir I am going to
touch on this because this is a little
bit scary
Internal Revenue Service may require a
substantial portion of the seller's
proceeds be withheld after closing when
seller is a foreign person
if required withholding does not occur
the buyer
you
could be held liable for the amount of
the seller's tax interest and penalties
and you know how much the IRS likes tax
and interest and penalties what this is
saying
is you believe it or not are
guaranteeing through the IRS
that the person selling the home to you
is not of a foreign country
that they are true absolute U.S citizens
and if they are not and you don't bring
it up
the IRS could hold you liable for 50 up
to 15 percent at the time of this
recording of the sale price
see how fast that adds up yeah why do
they do that because the IRS doesn't
want to jump over to some other country
and try to track somebody down when
they know where you and the house is and
it's real easy to lean you and so
there's a whole different thing we're
going to talk about different course and
I'm going to be real careful not to give
legal advice but essentially we've got
some solutions for you or some proposed
Solutions it's one thing you may want to
talk to an attorney about it's
it's one of the most unfair things I
could ever imagine the federal
government doing to a home buyers
prorations I'm just going to barely
touch on this so let's say that the HOA
homeowners association is collected
let's make this easy once every six
months
and we are three months into that six
month period what that means is you'll
have to reimburse the home seller for
the last three months they won't be
living there and then you'll have to
give the HOA your full next six months
typically ahead of time it's usually not
that long it's usually more like a month
or two at a time I just wanted to use
that as an example and there's a whole
bunch of stuff that can happen for
including property taxes HOA fees you
know it could be water it it could be a
whole variety of things okay
we are not going to talk about too much
here this talks about if if things
happen
when you go under contract if something
happens that substantially changes the
house
you know floods fires problems
condemnation if the city-state County or
federal government decide to take over
your home
often it doesn't happen but this kind of
covers what will be dealt how it'll be
dealt with okay so don't let it freak
out too much as always and at this point
paragraph 19 he you no longer need this
but they're going to tell you again they
recommend legal and tax counsel do you
see why
um anybody that's ever said you know
this is a standard State contract just
sign here
specific performance and liquidated
damages we're just going to barely touch
on this depending on which you check
what this does is it gives a seller
certain rights if all of these
contingencies are dealt with and
everybody's happy and all the dates have
been met and we're coming up on closing
and you say you know what I changed my
mind see ya
a specific performances they can keep
your earnest money and sue you to
complete the deal liquidated damages
says all they can do is keep your
earnest money and say bad things about
you on Facebook
or wherever else they want to talk to
you about
um and then this talks about things if
if stuff goes bad
how it's going to be handled I'm not
going to drag you through this right now
this one is always my favorite and uh
you know from previous courses when they
mentioned written contracts or oral
agreements
this is the entire agreement if it's not
in the body of this document no matter
well somebody has promised or said or
would happen or wouldn't happen if it's
not in here
it's not legal legally binding okay just
keep that in mind talks about how you
can get documents a lot of it's done
over the internet now
additional provisions
this box in most software will expand as
big as you need it to and you're going
to put in here anything additional that
you want to deal with so let's say for
example
you did way up at the beginning of this
thing you did want to pick the title
company but you do want the seller to
pay for it you would go ahead and try to
work out those terms right here okay
anything and everything that you have an
interest in accomplishing that is not
illegal
can go in this box and you'll want to be
careful about which put in there but
that's what this box is for and it
mentions here this has not been approved
by the Colorado Real Estate Commission
there's nothing wrong with this
paragraph but they don't know what
you're putting in it okay
and that's it
after all that you've figured all those
things out all those dates all those
things you have to do you're gonna go
ahead and sign this puppy and put a
little information about yourself in
here and if the sellers like it they're
going to sign this puppy and you're
under contract and you're now under the
gun and the time frame of all those
deadlines and all these things that have
to be done
if the seller does not like it they have
a couple choices they can ignore it and
then what will happen is this will just
expire at a certain point okay generally
in here we're going to have a time frame
where they have to respond
if they don't sign it it expires they
could send a formal written rejection if
they want
or they could counter it and then you
would receive a different document that
says you know what everything's in here
except or everything in here is okay
except these items listed on our counter
offer and then it's back in your court
do you want to live with those things
generally they're going to give you a
tight time frame maybe 24 hours to
respond and it goes back and forth like
that so it gets kind of intense and
that's why you're trying to learn some
of this General stuff
before you get to that
and a little bit about your broker and
that's it
you live through it and I'm so sorry the
stuff always takes longer than it than I
had hoped
but so important and and it's just
getting you familiarized with what's
going on
and now we're gonna do a whole bunch of
smaller courses on some of these
specific areas that might cause you
specific stress like earnest money and
sellers property disclosure disclosure
and that FERPA thing from the government
that says you're responsible to make
sure that that person selling it to you
is not from foreign countries
we'll go into details on that without
killing any any further on this thanks
for sticking with us