This morning I sat through another class on what is changing with our real estate contract here in Colorado. I say another, because it seems like they can never leave well enough alone with these things. In Colorado, licensed real estate agents are allowed to do contracts without lawyers, provided they use state approved forms. This means the forms are kind of important. The analogy would be if the state repaved most of the roads every year, and twice some years. It makes for a very bumpy ride while the work is going on – which seems like it is constant.
The sample contract was up to 15 pages from 12, not a good sign. Some changes were as minor moving sections around for readability (whose, I wonder?). They introduced some new terms and legal definitions that seemed helpful, like the Due Diligence documents. They put more teeth into some items, like a clear statement that if the buyer (and their lender) do not bring good funds to closing, it is a default. Hopefully no more “we are still waiting for the wire” at closings. The buyer’s loan contingency has been changed to become so absolute, that we’ll likely be seeing sellers requiring the Loan Conditions Deadline moved up to within 7 days of acceptance instead of at the end of the contract like it used to typically happen. Pre-approvals might even be taken seriously by lenders if that happens 🙂 , since the earnest money is clearly NON REFUNDABLE after the Loan Conditions deadline going forward (except for other contingencies whose dates may not have arrived yet).
While there are lots of other small changes in the contract, the bottom line is that the new forms will take some time to get used to, will likely require new language to be added to clarify what has been muddied up, and will change some of the date strategies we have used in the past. Other than that, business as usual!
If you would like to see what ALL of our real estate contracts look like, visit the Colorado Department of Regulatory Agencies web site to see the current forms. The new ones don’t kick in until January 1 2011.