Key Takeaways
- Colorado uses Commission-approved Contract to Buy and Sell Real Estate forms
- Colorado contracts contain unique provisions including the "Earnest Money Dispute" section
- Time is of the essence is standard in Colorado contracts - deadlines are strictly enforced
- Colorado requires title insurance commitment before closing
- The contract specifies separate deadlines for inspection, loan, appraisal, and other contingencies
Colorado Purchase Contracts
Important: This content covers Colorado-specific contract law. You should complete the National Real Estate Exam Prep first, as general contract principles are tested on the national portion.
Colorado uses standardized Commission-approved contract forms for real estate transactions.
Standard Contract Requirements
For a valid Colorado real estate contract:
| Requirement | Description |
|---|---|
| Competent Parties | Legal age (18+) and mental capacity |
| Offer and Acceptance | Meeting of the minds |
| Legal Purpose | Transaction must be lawful |
| Consideration | Something of value exchanged |
| Written Form | Statute of Frauds requires writing |
| Legal Description | Property must be identifiable |
Commission-Approved Forms
The Colorado Real Estate Commission approves standard forms:
| Form | Purpose |
|---|---|
| Contract to Buy and Sell (Residential) | Standard purchase agreement |
| Contract to Buy and Sell (Commercial) | Commercial property sales |
| Contract to Buy and Sell (Land) | Vacant land sales |
| Counterproposal | Used for counter-offers |
| Amend/Extend Contract | Changes to existing contracts |
Why Commission-Approved Forms?
- Ensure compliance with Colorado law
- Reduce unauthorized practice of law concerns
- Standardize transaction procedures
- Protect all parties
Note: Brokers must use Commission-approved forms or forms drafted by the parties' attorneys. Brokers cannot draft their own contract language.
Key Contract Provisions
Time is of the Essence
Colorado contracts include "time is of the essence" language:
- All deadlines are strictly enforceable
- Missing a deadline can be grounds for default
- Extensions require written agreement (Amend/Extend form)
Contract Deadlines
Colorado contracts specify multiple deadlines:
| Deadline | Purpose |
|---|---|
| Title Deadline | When title evidence must be received |
| Off-Record Title Deadline | For unrecorded matters |
| Record Title Objection Deadline | Time to object to title issues |
| Survey Deadline | For survey delivery |
| Inspection Deadline | Time for property inspection |
| Inspection Objection Deadline | Time to object to inspection items |
| Inspection Resolution Deadline | Time to resolve inspection issues |
| Appraisal Deadline | When appraisal must be complete |
| Loan Objection Deadline | Time to object if loan is denied |
| Closing Date | Final date for transaction |
Earnest Money
| Provision | Colorado Standard |
|---|---|
| Deposit Timing | Per contract terms (typically within days of MEC) |
| Holder | As designated in contract |
| Disbursement | At closing or per termination terms |
| Dispute | "Earnest Money Dispute" provision applies |
Contract Contingencies
Inspection Contingency
The inspection objection process:
- Buyer inspects property within Inspection Deadline
- Buyer submits objections by Inspection Objection Deadline
- Seller responds with resolutions
- If not resolved by Inspection Resolution Deadline, contract may terminate
Loan Contingency
If buyer cannot obtain financing:
- Must notify seller by Loan Objection Deadline
- Earnest money typically returned to buyer
- Seller can seek new buyers
Appraisal Contingency
If property appraises below purchase price:
- Buyer may object by Appraisal Deadline
- Parties can renegotiate
- Contract may terminate if not resolved
What does "time is of the essence" mean in a Colorado real estate contract?
Which forms must Colorado brokers use for purchase contracts?