100 Real Estate and Relocation Tips in 100 Days (Day 92)
In Colorado, the Contract to Buy and Sell Real Estate is generally prepared by your Realtor®. While consumers are free to retain legal if they wish, most home sales are consummated without involving attorneys. The Contract Form, with attendant addenda, disclosures, and amendments, is drafted by the Colorado Real Estate Commission, with blanks and check boxes designed to make completion relatively easy. That said, there are 250 different boxes and blanks in the basic contract, so there is room for error. As a consumer, you must pay particular attention to any contract you sign, and if you do not understand the many variable and ramifications of the document, you should stop and take whatever steps necessary to ensure your understanding.
(Please excuse the shameless commercial here, at The Berkshire Group; every consumer is presented with a Buyer Orientation Book which includes a sample copy of the contract with explanations of the contract. We think the more the consumer understands, the better the consumer's decisions.)
Before you instruct your Realtor ® to prepare your contract to buy, there are a few things you can do to place yourself in the best position. First, read and try to understand the contract before you are placed in the emotional moment of having to sign a contract proposal under pressure. Study values during the search process, become aware of what a reasonable offer should be. Your Realtor® will help you with this educational process. Before you even look at a house, you should select the mortgage lender you will be using, and complete the loan application and credit approval process. You lender can then provide you with a loan pre-approval letter, which will strengthen the offer you make. The seller wants to have confidence that any offer they accept will close, so a strong lender letter lifts that confidence.
It is true in many cases today that disclosures can be obtained prior to submission of an offer. Reviewing those disclosures may give reason not to make the offer, saving time and effort for everyone, and signing off on the disclosures and returning them with your offer provides an indication that you are serious and forthright in your dealings. Consider the time needed to conveniently move household goods, register children for school, complete the loan process, and transfer utilities.
Make the offer as simple as possible. Complicating your offer with hard to comprehend contingencies creates doubt with the seller. Seller's want simplicity, efficiency and timeliness. The more complicated you make, the less likely the seller will accept the offer, or even return a counter that you can accept.