Once you’ve written a good, strong offer and the seller has accepted, you are ‘under contract’. Now, there are a number of events that need to happen in pretty quick order.
First, you need to understand the word, ‘contingency‘. A contingency is something that must be satisfied in some way or removed in order for the contract to continue. There’s usually a deadline attached to these contingencies. Working to meet these deadlines can be totally annoying, but missing deadlines can have severe consequences. If a deadline is approaching and you need more time for some reason, the deadline can be amended as long as all parties agree.
For instance, the first contingency to be addressed is usually inspection. On the Colorado Contract to Buy there is an inspection objection deadline and an inspection resolution deadline (on the first page, items number 22 and 23). By the objection date, you must get all the inspections you want completed, decide how you’re going to react to what was found, put it in writing, and get it to the seller.
The easiest – and most rare – scenario is that nothing was found during inspection that you didn’t anticipate when you wrote the offer, or that you don’t feel you can handle yourself. You intend to proceed with the purchase of the home. In that case, nothing needs to be put in writing. The inspection objection and resolution deadlines will simply come and go. It is professional courtesy to let the seller’s agent know if you have no issues you want addressed, so I do that but you wouldn’t have to do anything.
But if expensive or complicated issues were uncovered, you may decide the seller must correct them, or address the problem financially. You put your decision in writing using the ‘Inspection Notice’ form.
Many times, home buyers make their own lives harder by using inspection as a way to get the price they ‘really wanted’ from the seller. Inspectors will note every defect, no matter how minor. A buyer who uses minor defects to try to squeeze the seller is being totally annoying and may find themselves losing the house.
Here’s why – if you submit an Inspection Notice to the seller, and seller does not agree to it, look out for that ‘Inspection Resolution‘ deadline. Because if the issues are not resolved, the contract terminates automatically 24 hours after the Inspection Resolution deadline passes. I’m not giving legal advice here, you can read that for yourself. Here’s the contract, see paragraph 10.3 on page 6.
Of course, seller can respond by saying they’ll do a portion of what you requested. If what they say is not satisfactory to you, you could go back to them with another proposal. These negotiations don’t usually go back and forth very many times, but this is one of the most stressful periods of buying a house. All details must be agreed to in writing, and all parties sign the Inspection Notice.
Sometimes sellers will fix everything you asked them to fix. But if they won’t, you have to decide if you want to proceed with buying the house or not. You can most easily make this decision if you’ve gotten estimates for the items that most concern you. Of course, that takes time and those pesky deadlines are coming up fast.
NOTE: I provided links to the forms just in case you want to see them. If you work with me, you don’t have to bring the forms, I’ll bring them!
Before I end this post I want to point out one misunderstanding about inspections. A house doesn’t ‘pass’ or ‘fail’ an inspection. The inspection is supposed to alert you to conditions that need repair, including safety issues and ongoing maintenance issues.
Other Issues
This is the sixth post in a series of totally annoying things that can happen while buying a house in Colorado. To start from the beginning, click here. To see the next post, on appraisal, click here.
I write posts on real estate issues and local events in the Denver metro area, especially those *communities between Denver and Boulder, as a public service. My hope is to give people an idea of the ‘flavor’ of our community, in case they’re new or moving to the Denver area.
I am a residential real estate agent, happily helping folks buy a house or sell a house in the beautiful and friendly *suburbs northwest of Denver.
*Arvada, Broomfield, Westminster, Thornton, Golden, Wheat Ridge, Northglen, Lakewood
Read more about Arvada Colorado.
I do tire of writing profiles about myself, I'd much rather talk about you! So please email or call me sometime.
And if you're looking for someone to maybe help you buy or sell a home in the vicinity north of Denver, Colorado and you'd like to learn more about me, visit my website, DreamHouseHunting.com.
If at least a little info would be helpful, I've lived in Arvada since 1993, I've been a licensed, full-time real estate agent since 2001. You can read some past clients' testimonials on my website.
I hope to hear from you soon!
Joetta Fort, Broker Associate
Equity Colorado 