Key Documents

 

Like  many human endeavors, real estate is carried out both on the ground and on paper.  In this section of the site, we provide access to  many of the documents that you’ll encounter in the course of buying a home.

Colorado Contract Forms

First, as we have pointed out in our introduction to the home buying process, all of the common contract forms used in Colorado are standardized by the Colorado Real Estate Commission.  Listed below are some of the more common forms you will encounter as you take the initial steps in the home buying process.  These include the state’s brief definitions of the legal relationships you can establish in working with real estate agents, the form used to establish a buyer agency relationship between an agent and a home  buyer, and the form used for a seller to list a property with an agent.   In most cases, these forms are changed or amended when used to create contracts  between buyers, sellers, and real estate agents.

Lender Documents

There are a number of forms that you’ll use in working with lenders as well, and these too are highly standardized.   Early in the process, you’ll run into the loan application form and the lender’s “good faith estimate.”  I assume the “application form” requires little explanation.  And, as the name implies, the good faith estimate is the lender’s attempt to give you a reasonable estimate of all the costs involved in purchasing a property.  At closing, you’ll  sign a small mountain of paper — assuming you need to get a loan to purchase your  property.  The “Note” and “Deed of Trust” are among the most important because they outline the terms of your contract with the lender.

Standard Forms Used at Time of Contract

The form used to establish the purchase contract between the buyer and seller is also a standardized form in Colorado (see top of page), though in most cases the standard form will be substantially modified to express the terms of the final agreement between the buyer and seller.  Similarly standardized are the forms used for the Seller to make disclosures to the Buyer regarding their knowledge of the condition of the home and whether they have knowledge of lead based paint in the property.  The standard versions of  these forms are listed below.

Inspection Related Documents

Once you’re under contract and have received the Seller disclosures required under your purchase contract, you should be hiring a professional to inspect the property for you (see Under Contract and Home Inspectors ).   Most of the inspectors we work with will produce a 2-5 page written report on the defects and concerns they have with the home as well as a longer descriptive report with additional information on the home itself (e.g., the  type and age of the furnace and the amount of insulation in the home).   The state has a standardized form used in outlining the Buyer’s objections concerning defects in the property and reaching resolution on these objections between Buyer and Seller.  To give you a feel for what these documents look like, we’ve included the inspector’s written reports, the Buyer’s objections, and the resolution agreed to by Buyer and Seller for two transactions.

PURCHASE  #1

PURCHASE  #2

Title Related Documents

Two additional documents are encountered in almost every real estate purchase in Colorado.  The title company issues a Title Commitment in which they outline the terms under which they will insure the Buyer’s ownership or “title” to the property (see Under Contract and Title Company ).   To determine whether the sales price is reasonable, the lender will also hire  an appraiser to do an evaluation of the value of the property, called an  “appraisal,” based on comparable sales prices of other properties on the market.   In addition, if  you are buying a single family home rather than a condo or townhome, the lender may require that a survey of the property, indicating the location of the property boundaries and any improvements such as the home,  garage, decks, and so on (see Surveyors ).   And, finally, prior to closing, the title company will prepare a balance sheet for you, showing all the charges associated with the purchase of the property  (e.g., cost of the property, lender fees, etc.) and all the money coming in to allow the closing to occur (e.g., the loan, your earnest money deposit, a tax credit from the seller, etc.).  This balance sheet is called a “settlement  statement.”