A Realtor is usually the agent of the seller and owes a fiduciary duty to the seller. The purchaser can engage a buyer's broker. A buyers agent has the fiduciary duty to inform the seller of the financial ability of the purchaser.



Once the purchaser zeros in on the suitable home, the purchaser makes an offer in the standard format of a State of Colorado approved, Agreement to Buy and Sell Real Estate called a sales contract. The agreement should include the offer price, the inspections required by law and the purchaser. The time frames in which each stage of the transaction is to be completed should be detailed in the agreement. An amount of 1-5% of the price should be deposited with the Realtor. Once the sales contract is accepted and signed by the seller and the purchaser, it binds the parties.

The purchaser will make an inspection of the property with the help of approved inspectors with regard to its structure, efficient pest control, radiation, lead paint if used and sewage. The seller can reject refuse or accept the inspection report. If the differences with the seller are irreconcilable the buyer can walk away from the transaction.

The purchaser should then engage an attorney, a real estate title company or a trust and title company to search for encumbrances on the property. A list of title search professionals are available with the American Land Title Association. An investigation will be conducted by the title search company into land and court records to detect defects in title. A clear title makes the property marketable. Encumbrances in title in the state of Colorado will include implied easements of necessity or liens arising out of judgments, unpaid revenues to the Municipality, unpaid taxes and mortgages. A title search will also prevent the purchaser from buying a property which is encumbered because of forged documents or previous fraudulent transactions. The purchaser should buy a title insurance policy to avoid litigation costs arising out of possible undetected title claims. The purchaser can raise a loan from a mortgage company or bank on the basis of the clear title report of the title search company. This will assure the lender that in the event of foreclosure the property is an unencumbered valuable security.

A promissory note is signed by the purchaser with the lender which is the IOU. When the purchaser is able to raise the loan to pay the seller the contract is closed.

At the time of closure, the purchaser will bring identification documents and a home owner's insurance policy with a receipt of payment of one year's premium and any other document required by the lender. The purchase is recorded in the public records and the process of purchasing a home in the state of Colorado is complete.