Real Estate Q&A
YOUR JOURNEY HOME
Free Press Real Estate Columnist
Q. We are sort of preparing to buy a home this year. Looking around online I found the Division of Real Estate (DORA) website for the State of Colorado. On that I looked over the massive purchase contract. There must be a gazillion pages in the contract. How much of that is really important or necessary? We are thinking of buying on our own and neither of us is an attorney.
A. Not many prospective home buyers have told me they just happened onto the DORA website. Congratulations! Your online research has taken you a direction I do not think most buyers venture.
The standard residential real estate purchase contract is not “a gazillion pages” long, though it is 16 pages. When you include the disclosures from the seller regarding property condition, source of water, square footage and possibly a few others pages that may or may not be needed for a particular purchase, the contract can be 25 pages or more.
As for not being an attorney, neither am I nor are most other Realtors. That is why state law does not let us “write” the contract. We fill in the blanks of the contract. The contract you saw online is reviewed, and in some cases revised, annually by a committee of attorneys, Realtors and other professionals. That committee must consider all 16 pages, and all items included there are “important or necessary.”
If I may rephrase your question to ask “what parts or items within the contract should I pay most attention to?” — my first suggestion is to look at each of the blanks to see how it should be filled in; spaces are not all filled in for any given purchase. The pre-printed boiler plate information surrounds specific dates, amounts, deadlines and other details specific to your purchase. Since many of those items to be filled in are in essence a multiple choice of questions where only one or a few of many are filled in, let me please suggest you use a Realtor at not cost to you or pay an attorney to review the contract for you before you submit it to a seller (if doing it on your own).
Within the contract there are many dates that establish deadlines for each step of the process. Many of those dates are laid out in a matrix on contract pages 2 and 3. Pages 3-5 deal with purchase price, down payment and financing. Pages 5-9 deal with specifics of whom else is involved in helping make the transaction happen and how they fit in. Among the details there are the appraisal, homeowners’ association and title company participation provisions.
Without outlining every one of the 16 pages, I think you can begin to see there is “important or necessary” information on each page of the contract.
To go back to my statement about using a Realtor at no cost to you; when a property is listed for sale, in the contract between the seller and the listing Realtor, there is an agreement that the buyer’s Realtor will be paid from the proceeds of the sale. While a For Sale by Owner is not obligated by such a “listing” contract, many of those sellers know they are going to be asked to pay that cost and have factored it into the price they are asking or are willing to accept for the purchase/sale of the house.
The forms are available at http://www.cdn.colorado.gov/cs/Satellite/DORA-DRE/CBON/DORA/1251627670428.
GJ Free Press columnist Doug Van Etten is a local Realtor with Keller Williams Colorado West Realty. He has been helping buyers, sellers and investors with their real estate needs since the early 1990s— first in Anchorage, Alaska, and for the last three years in the Grand Valley. To submit a question for this column or for your personal real estate needs, contact Van Etten through his website http://www.ComeHome GrandJunction.com.
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