Buying or Selling a House? Have You Read the Contract?

Filed Under (Bradford Publishing News & Updates, Real Estate) on 02-09-2012

buying your home, buying a new home, home buying tips, real estate contracts Some Interesting Tidbits Related to the Evolution of Colorado Real Estate Forms

By Candace Boyle

Buying or selling a house is a complex financial and legal transaction that calls for paying close attention to detail and exchanging important legal documents. For more than 100 years, people  in Colorado have been able to choose real estate brokers rather than attorneys to handle their real estate transactions. 

What is a broker’s role?

As the practice of real estate has evolved, one of the broker’s essential jobs has become preparing legal documents related to the property and title and also, advising you about the legal effect of those documents.

Does the broker prepare his or her own forms?

In 1957, the Colorado Supreme Court ruled that brokers can prepare legal documents on “standard and approved printed forms.”  Today, the Colorado Real Estate Commission, an arm of the state’s Real Estate Division, approves the forms that brokers must use.

Can brokers use their own forms?

No. They must use the 48 Commission-approved forms, and many of these forms are revised every year. In short, brokers must pay close attention to form changes. 

How has the sales contract evolved?

The Colorado real estate sales contracts that we use today have changed—and grown—over the years. The changes are due to contributions from the real estate industry and real estate attorneys as well as ongoing efforts by the Division of Real Estate to protect the public’s interest.  Today’s residential sales contract is a whopping 15 pages long and contains 30 important provisions that deal with every aspect of the sale. Those provisions include the agreement between the parties, the purchase price and terms, the financing conditions, and disclosures about everything from the source of water to the requirement of carbon monoxide alarms.

You might just rely on your broker to explain the terms and conditions, but because the contract changes frequently, your Realtor might not convey every nuance. To be safe, every buyer and seller should read and understand the sales contract before signing it.

Much more information about the Real Estate Commission, laws and rules affecting brokers, appraisers, and mortgage loan originators is available in the 2012 Colorado Real Estate Manual. New Real Estate Contracts were mandatory January 1st, 2012. They are now available at www.bradfordpublishing.com/legal-forms





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