Talk to your lender early in the process: Meeting with your lender before contacting a real estate broker is one way to simplify the home buying process. Knowing that you’re prequalified for a mortgage and how much your lender will approve gives you and your real estate broker a solid price range for homes to consider. In today’s market, some sellers consider offers accompanied by a lender letter more seriously than ones without. Once an offer is made, your mortgage lender will want a copy of the contract signed by you and the seller. In most cases the lender will arrange for an appraisal to ensure that the value of the property is sufficient to secure the loan and begin the underwriting process. If the loan is approved, a closing date will be set - usually at a title company. At closing, the final paperwork is reviewed and signed, and the funds change hands. After closing you can take possession of your new home subject to the terms of your contract.

Determining the working relationship that you have with your real estate broker: Many homebuyers don’t understand that Colorado has two options when it comes to your relationship with your broker. The real estate broker that you choose to work with will be working as either a Single Agency broker (an agent for the buyer OR seller) or as a Transaction Broker (for the buyer or seller OR both). A single agency broker will advocate for their client and works solely on this client’s behalf. A transaction broker facilitates the sale by fully informing the parties, presenting all offers and assisting the parties with any contracts, including the closing of the transaction without being an agent or advocate for any of the parties. Every broker must disclose in writing what the working relationship is in your situation.

Understanding the real estate contract: An offer for the purchase of real estate must be in writing to be valid. The Colorado Real Estate Commission requires that every real estate broker licensee use a contract form approved by the Real Estate Commission, unless the contract is drawn by either the seller or buyer or the attorney for the buyer or seller.

Working with third parties and contingencies in the contract: Since every offer to buy is unique, the Real Estate Commission approved contract allows for the buyer and their licensed broker to make the contract contingent on certain items. Contingencies can be items such as the property appraising for the purchase price, approval of financing, a satisfactory home inspection, or the sale of their current residence. It is critical for a buyer to include those contingency items in the contract to eliminate misunderstandings about what circumstances will allow for a successful execution of the transaction.

Time is of the essence – deadlines and earnest money: Once your offer has been submitted and accepted by the seller, you will be asked to put down a good faith deposit, more commonly known as earnest money. Both the buyer and seller will have specific deadlines that need to be met before you close on your new home. As a buyer, if you miss a deadline, you might not be able to cancel or withdraw your offer unless you are willing to forfeit your earnest money. Your offer allows you to make decisions regarding when to close on your new property, when you can take possession of that property, and what remedies are available if the contract dates are not met.

Considering purchasing in an HOA? Consider these tips too.

Make sure you have the necessary documentation: HOAs have Bylaws, Covenants, Rules and Regulations, so obtain copies of these documents to know the HOA’s responsibilities as well as your rights as a new member. You will also want to get copies of the Colorado Common Interest Ownership Act (CCIOA) and the Colorado Nonprofit Act which are the state laws governing HOAs.

Be aware of your HOA’s enforcement powers: HOAs are able to enforce their covenants, rules, regulations and bylaws through various methods such as fining, placing a lien on an owner’s property, sending an owner’s account to collections or filing a civil lawsuit in court. Knowing under what circumstances and what the processes are to take these enforcement actions are important.

Get Involved: The best way to become part of the community and make a difference in your HOA is to get involved. All HOA meetings are open to homeowners except for executive sessions. Make sure to attend HOA meetings, stay up to date on what's happening in your community, share your ideas and voice your concerns.

Resources are available: The HOA Information and Resource Center at DORA has invaluable information and resources to answer your questions, educate you on HOAs and assist you with difficult and sensitive situations. Know that we are here for you!

The Division encourages everyone to visit the Division’s website at www.dora.colorado.gov/dre to ensure that their real estate broker is properly licensed.