Buying a home in Colorado

How buying works, in order

Buying a home in Colorado runs in six stages: set a budget, get pre-approved, search, make an offer, work through the contract deadlines, and close. Each one below says what happens and what you are agreeing to.

1. 1

   Work out the real budget

   Not the maximum a lender will approve, but the payment you actually want to make once property taxes, insurance and any HOA dues are in it.

2. 2

   Get pre-approved

   A pre-approval means a lender has reviewed your income, asset and credit documents. Sellers take an offer with one far more seriously, and it tells you early whether the loan you want is realistic. More in home loans and mortgage basics.

3. 3

   Search, then see places in person

   Start with live MLS listings, the area guides and property types. Then go and look: drive the route at the hour you would commute it, and on rural land walk the road in.

4. 4

   Make the offer

   Your offer is written on the Colorado Real Estate Commission’s approved contract form. Price is one term among many: the earnest money, loan type, closing date and every deadline are negotiable too.

5. 5

   Work through the contract deadlines

   Once both sides sign, the contract’s schedule takes over. Each deadline, explained below, is a point where you can object or, on the contract’s terms, walk away.

6. 6

   Close

   A final walkthrough, then signing, funding and keys, usually handled by a title company. Nothing exciting should happen at the table; the work that prevents surprises happened during the deadlines.

The deadlines in a Colorado contract

A Colorado purchase contract carries its own schedule of deadlines, negotiated when the offer is accepted. Brokers use forms approved by the Colorado Real Estate Commission, which leave each date blank. No day count is fixed by law, so the dates in your contract are the ones that matter.

The ones that shape most purchases:

• Inspection objection. By this date you inspect and, if something is wrong, deliver a written objection or notice to terminate. A later resolution deadline gives both sides time to agree on repairs or a credit.
• Appraisal. If your lender needs one, a value below the price can let you object, renegotiate or terminate, depending on the contract.
• Title review. The title commitment lists recorded easements, liens and covenants, and you have a deadline to object to anything you cannot accept.
• HOA documents. The seller provides the association’s governing documents, rules, budget and minutes, and you have a deadline to review them.
• Loan conditions. The contract sets dates for applying for the loan and for approval on terms you accept; letting them pass can put your earnest money at risk.
• Closing. When the funds move and the deed is recorded.

The rule that catches people: let a deadline pass without acting and you have generally accepted that condition. Put every date on a calendar the day you sign.

What earnest money is

Earnest money is a deposit you pay once the contract is signed, to show the seller you are serious. At closing it is credited toward your purchase.

The contract names who holds it, often the title company or the listing brokerage, and the amount is negotiated. If you terminate under a right the contract gives you, such as a timely inspection objection, it is generally returned. If you walk away after your deadlines have passed, the seller may be entitled to keep it.

What to check on rural and acreage property

On acreage you are buying a water supply, a wastewater system and a way in, not only a house, and each needs checking before your inspection deadline. A general home inspection does not answer these questions.

• Well permit. Colorado wells are permitted by the state Division of Water Resources, and the permit limits the water’s uses: some allow use inside the house only, others livestock or watering. Read the permit, not the listing. See the well permit guide.
• Septic. County rules at sale differ. Elbert and Douglas counties require a septic Use Permit when a property sells, so ask for the inspection report. See the septic guide.
• Access and easements. Using a road is not the same as a recorded right to use it. Check the title commitment, and ask who maintains any shared road. See rural access and easements.
• Zoning and covenants. County zoning decides whether you can keep horses, how many, and what you can build; covenants can add limits. See horses and zoning.
• Metro districts. Many newer Front Range subdivisions sit in a metropolitan district that levies its own property tax for infrastructure. Check the tax bill before you settle on a budget. See the metro districts guide.
• Radon. A test is worth adding to any Front Range inspection. See radon on the Front Range.

More reading before you buy

These guides answer the questions a listing usually does not:

• Selling in the metro to buy acreage, on timing a sale and a purchase together.
• Buying a 1970s house in the south metro, on what to look at in houses of that era.
• Which school district is this address in?, on confirming school district boundaries with the district itself.
• The full list of guides.