Colorado Purchase Contract: Dates & Deadlines

August 18, 2021
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Understanding the contract dates and deadlines and how they relate to each other before making an offer to buy a home in Colorado can be the difference between smooth success and painful headache. We break each date and deadline down so you can methodically offer a purchase contract timeline that will be advantageous to the obligations you must accomplish as a buyer while taking into consideration the sellers’ obligations to perform.

To start, we define Deadline, Objection, Resolution, Termination and Mutual Execution of Contract to show how each build off the other in sequence. This makes for a clear progression of actions to take as you step through the obligations of the contract and finalize your decisions towards close.

  •      Deadline: the latest time or date by which the item should be completed.
  •      Objection: the act of disapproval or unsatisfactory condition of an item.
  •      Resolution: the act of solving an objection.
  •      Termination: the act of coming to an end.
  •      Mutual Execution of Contract: abbreviated as MEC, it is the date both parties sign the contract.

Item No. 1 - Alternative Earnest Money Deadline

This is the deadline for when your earnest money is due into the escrow account of the title company, or broker if they are to handle closing. Earnest money is used to show the Buyers’ seriousness of their offer to the Seller. The amount a buyer offers as earnest deposit is negotiable but is typically offered as several thousand dollars up to 3% of the purchase price and can be more if the Buyer chooses. The deadline is typically 1-5 days from MEC. Buyer should note that the deposit could be forfeited to the Seller if they do not perform according to the contract. Homsby guides our customers every step of the way to avoid this issue.

Title Deadlines

Item No. 2 - Record Title Deadline

This is the deadline that the title company must provide the Buyer with a commitment for an owner’s title insurance policy. In most cases, the title company needs time to scrape and gather public information to create the title report, which includes details related to plat, declarations, covenants, conditions & restrictions encumbering the property as well as details concerning any exceptions defined within the title commitment. This is something the Buyer wants done correctly. This deadline is typically 10-14 days from MEC.

Item No. 3 - Record Title Objection Deadline

The Record Title Objection Deadline allows a buyer time to review the title commitment from the title company and object to any unsatisfactory title conditions that may encumber the property. This date is typically 1-5 days after the Record Title Deadline or thought of another way, 11-15 days from MEC.  

Item No. 4 - Off-Record Title Deadline

This is the deadline for which the seller must disclose actual knowledge of or provide all information & documentation in their possession related to easements, liens, leases or agreements that may not be publicly known that could affect title to the buyer. This date is typically 7-14 days from MEC.

NOTE: Items no. 4, 8, 10, 11 & 30 are similar seller disclosure obligations to the buyer. To create simplicity and consistency, these deadlines could be aligned.

 

Item No. 5 - Off-Record Title Objection Deadline

The Off-Record Title Objection Deadline allows a buyer time to review the information & documents provided by the seller and object to any unsatisfactory items. This date is typically 1-5 days after the Record Title Deadline or thought of another way, 8-15 days from MEC.  

Item No. 6 - Title Resolution Deadline

This is the deadline for which all title objections must be resolved. This date is typically 1-3 days after the record & off-record objection deadlines or thought of another way, 15-17 days from MEC.

Item No. 7 - Right of First Refusal Deadline

The Right of First Refusal Deadline gives a third party, typically an HOA or condo board that acts as a governing authority for a community, the ability to vet and approve a Buyer’s contract. If applicable, the entity holding the right gets the opportunity to either approve or disapprove the contract. This date is typically 5-7 days from MEC.

Owner's Association Deadlines (HOAs)

Item No. 8 - Association Documents Deadline

This is the deadline for which the Buyer must receive all current HOA documents, if applicable. HOA documents will define all the rules and restrictions related to the community including pets, parking, architectural standards, upkeep, common area uses and much more. This date is typically 7-14 days from MEC.    

NOTE: Items no. 4, 8, 10, 11 & 30 are similar seller disclosure obligations to the buyer. To create simplicity and consistency, these deadlines could be aligned.  

Item No. 9 - Association Documents Objection Deadline

The Association Documents Objection Deadline allows a buyer time to review the information & documents and terminate the contract based on any unsatisfactory items found. This date is typically 1-5 days after the Owner's Association Deadlines (HOAs) or thought of another way, 8-15 days from MEC.  

Seller Property Disclosure Deadline

Item No. 10 - Sellers Property Disclosure Deadline

This is the deadline for which the seller must provide the buyer the standard forms for which the seller discloses knowledge of issues or improvements they are aware of relating to the property. Any objection to these disclosures must be covered under an Inspection Objection. It is therefore prudent that a buyer incorporates an Inspection Objection period to perform their own investigations. This date is typically 3-14 days from MEC.

NOTE: Items no. 4, 8, 10, 11 & 30 are similar seller disclosure obligations to the buyer. To create simplicity and consistency, these deadlines could be aligned.  

Item No. 11 - Lead Based Paint Disclosure Deadline

This is the deadline for which the seller must provide the buyer the lead-based paint disclosure and the EPA Brochure "Protect Your Family From Lead In Your Home" if the home was permitted or built prior to 1978. This date is typically 3-14 days from MEC.

NOTE: Items no. 4, 8, 10, 11 & 30 are similar seller disclosure obligations to the buyer. To create simplicity and consistency, these deadlines could be aligned.  

Loan and Credit Deadlines

Item No. 12 - New Loan Application Deadline

This is the deadline by which the buyer must submit a complete loan application to a lender. For many buyers, this process is completed before submitting an offer to get pre-approved. This date is typically 1-5 days from MEC or shown as “Completed” on the offer. If making a cash offer, it can be written as “None” on the offer.

Item No. 13 - New Loan Termination Deadline

This is the Buyer’s Financing Contingency Deadline. Known in Colorado as the New Loan Termination Deadline, this is the period a buyer uses to find a loan satisfactory to their needs to complete the purchase, including interest rate, payment, costs, terms, and conditions. This date is typically 17-45 days from MEC and should be considered in relation to the closing date & appraisal contingency, if needed. A buyer could look to stagger an appraisal contingency and financing contingency in their offer to give time to guarantee loan funding.  

Item No. 14 - Buyer's Credit Information Deadline

This applies if there will be Seller Financing (the seller/owner carry financing). It is the deadline by which the buyer must provide financials, credit report and other requested documents to the seller. This date is typically 7-10 days from MEC.

Item No. 15 - Disapproval of Buyer’s Credit Information Deadline

This applies if there will be Seller Financing (the seller/owner carry financing). It is the deadline by which the seller must review the information provided by the buyer and decline them of financing if they disapprove. This date is typically 1-4 days after the Buyer's Credit Information Deadline or thought of another way, 8-14 days from MEC.  

Item No. 16 - Existing Loan Deadline

This applies only if the buyer is to assume the seller’s existing loan. It is the deadline by which the seller must provide all current loan docs to the buyer for review. This date is typically 7-10 days from MEC.

Item No. 17 - Existing Loan Termination Deadline

This applies only if the buyer is to assume the seller’s existing loan. It is the deadline by which the buyer must review the terms of the existing loan and terminate the contract if they object. This date is typically 1-4 days after the Existing Loan Deadline or thought of another way, 8-14 days from MEC.  

Item No. 18 - Loan Transfer Approval Deadline

This applies only if the buyer is to assume the seller’s existing loan. It is the deadline by which the seller’s lender must approve the transfer of the loan being assumed by buyer. This date is typically 21-28 days from MEC but could be longer depending on the closing date. The review and approval take time and will be dictated by the lender’s ability to process the request.  

Item No. 19 - Seller or Private Financing Deadline

This only applies if any portion of the financing is provided by the seller or other private financing means. It is the deadline by which the buyer must decide if the financing being offers is acceptable. This date is typically 21-28 days from MEC.

Appraisal Deadlines

Item No. 20 - Appraisal Deadline

This is the Buyer’s Appraisal Contingency Deadline. Known in Colorado just as the Appraisal Deadline, this is the period a buyer must receive an appraisal of the property. This is typically lender driven and outsourced to a third party. This does not apply to FHA or VA loans, if the appropriate boxes are checked. This date is typically 17-35 days from MEC and should be considered in relation to the financing contingency and closing date.

It should be noted that an appraisal should be scheduled asap through your lender as delays are common. Expect a minimum of 14-day turnaround unless you want to pay for rush fees.

Item No. 21 - Appraisal Objection Deadline

This is the deadline by which the buyer must submit written communication to the seller that they object to the appraisal valuation. Colorado has a specific form used to notify the seller for this objection.

This date is either set the same as the Appraisal Deadline or plus 1-2 days thereafter which is typically 17-35 days from MEC.

Item No. 22 - Appraisal Resolution Deadline

If there is an appraisal objection, this is the deadline by which that objection needs to be resolved between buyer and seller. This date is typically 1-4 days after the Appraisal Objection Deadline to allow time for any new negotiation or 18-39 days from MEC.  

It should be noted that during this appraisal resolution, the buyer and seller only have the following options to consider: 1.) seller can come down in price, 2.) buyer can make up the difference in cash, 3.) a combination of price reduction and cash contribution is agreed to, or 4.) the contract is terminated. Very rarely does an appraisal for a conventional loan come back with a list of items that need to be fixed to satisfy “minimum property requirements” before an appraisal can be completed. However, FHA and VA appraisals are very different and do commonly have a list of items that need to be fixed before the lender can approve a loan.  

Survey Deadlines

Item No. 23 - New ILC or New Survey Deadline

This is the deadline by which the title company, buyer’s lender, or buyer must order an Improved Location Certificate or Survey (fancy terms for property line report), if needed or required. This date is typically 18-21 days from MEC.

Item No. 24 - New ILC or New Survey Objection Deadline

This is the deadline by which the buyer must submit written communication to the seller that describes the matter for which they object within the New ILC or New Survey and require the seller to correct. This date is either set the same as the New ILC or New Survey Deadline or plus 1-2 days thereafter which is typically 18-21 days from MEC.

Item No 25 - New ILC or New Survey Resolution Deadline

If there is an ILC or Survey objection, this is the deadline by which that objection needs to be resolved or the contract terminates. This date is typically 1-4 days after the New ILC or New Survey Objection Deadline which would mean 20-28 days from MEC.  

Inspection & Due Diligence Deadlines

Item No. 26 - Inspection Objection Deadline

This is the Buyer’s Inspection Contingency Deadline. Known in Colorado as the Inspection Objection Deadline, this is the period a buyer defines to conduct all their investigations on the property, including professional site inspections. By this deadline, the buyer must submit written communication to the seller that describes all unsatisfactory physical conditions for which they object, if any. This date is typically 17-28 days from MEC.

The Inspection Objection Deadline is often the single deadline most negotiated between buyer and seller with buyer wanting more time and seller wanting to give less. We discuss the strategy of defining this deadline here.

Item No. 27 - Inspection Termination Deadline

This is the deadline by which the Buyer must submit written communication to exercise their right to terminate the contract due to unsatisfactory physical conditions on the property. If written communication is presented before deadline expiration, the buyers earnest deposit shall be returned according to the contract. This date is typically set the same as the Inspection Resolution Deadline or 2-4 days after the Inspection Objection Deadline which would mean 19-32 days from MEC.  

Item No. 28 - Inspection Resolution Deadline

If there is an Inspection Objection, this is the deadline by which that objection needs to be settled between buyer and seller, in writing or the contract terminates. This date is typically 2-4 days after the Inspection Objection Deadline to allow time for any new negotiation or 18-39 days from MEC.

An Inspection Resolution discussion is a very common situation encountered across all property types between all types of buyers and sellers. We discuss at length the options a buyer has if in this position here.    

Item No. 29 - Property Insurance Termination Deadline

This is the deadline for which a buyer must acknowledge satisfaction with the homeowners insurance bids they receive or terminate the contract in writing. This date is typically set the same as the New Loan Termination Deadline or 17-45 days from MEC.

Item No. 30 - Due Diligence Documents Delivery Deadline

If you check the box for 10.6.1.1 or 10.6.1.2, this is the deadline by which the seller agrees to deliver copies of specific documents pertaining to the property (think leases, permits, warranties, contract work, etc). This date is commonly set the same as the Sellers Property Disclosure Deadline which is typically 7-14 days from MEC.  

NOTE: Items no. 4, 8, 10, 11 & 30 are similar seller disclosure obligations to the buyer. To create simplicity and consistency, these deadlines could be aligned.  

Item No. 31 - Due Diligence Documents Objection Deadline

This is the deadline by which the buyer must submit written communication to the seller that describes any unsatisfactory matters within the Due Diligence provided to them for the seller to correct. This date is typically 1-5 days after the Due Diligence Documents Delivery Deadline or thought of another way, 8-19 days from MEC.  

Item No. 32 - Due Diligence Documents Resolution Deadline

If there is a Due Diligence Documents Objection, this is the deadline by which that objection needs to be settled between buyer and seller, in writing or the contract terminates. This date is typically 2-4 days after the Due Diligence Documents Objection Deadline to allow time for the seller to resolve the objections or thought of another way, 10-24 days from MEC.

Item No. 33 - Conditional Sale Deadline

This is the Buyer’s Sale Contingency Deadline. Known in Colorado as the Conditional Sale Deadline, this is the period a buyer defines to complete the sale of an existing property owned. By this deadline, the buyer has the right to terminate the contract in writing to the seller if they cannot close the other property. This date is highly subjective given the individual situation. A buyer will elect a long period while the seller will want the shortest period possible. We discuss this contingency in detail here.

Item No. 34 - Lead-Based Paint Termination Deadline

This is the deadline by which the buyer must submit written communication to the seller that describes any unsatisfactory matters with the lead-based paint disclosure or any results from lead-based paint inspection performed. As this relates to an inspection and subsequent termination, this date is typically set the same as the Inspection Resolution Deadline or 18-39 days from MEC.

Closing & Possession Deadlines

Item No. 35 - Closing Date

This is the deadline negotiated between buyer and seller for which all the prior steps need to be performed by each respective party in order to record the transfer of ownership of the property. Concluding an appropriate target takes understanding of both positions and the third-party participants each will choose to employ to aide them in the transaction. Closing in less than 30 days can typically be done smoothly by cash buyers but can become very tight and stressful for any buyer looking to close with a new purchase loan. Most successful transactions should listen to what their lender is currently claiming to be the required time to close a transaction through their services. They will typically say somewhere between 32-45+ days from MEC and all depends on the type of loan and buyer you are.  

Item No. 36 & No. 37 - Possession Date and Time

This is the deadline by which the seller hands over the keys and no longer has legal access to the property. In Colorado, this is usually the same day as close and can be defined further as Delivery of Deed. If the seller is to require additional time to occupy the property, a Post Closing Occupancy Agreement, also known as a seller rent-back, should be incorporated into the contract and agreed to between the parties.

Item No. 38 & No. 39 - Acceptance Deadline Date and Time

This is the deadline and time the buyer sets for the seller to review the offer and respond to the buyer, or the contract becomes void. This is typically defined in hours to a few days of the contract date. If the seller decides to counter the buyers offer, then a new deadline will be established by the seller for the buyer to respond.

By learning the dates and deadlines, the rest of the contract and its legalese may become easier to follow. If reviewing the contract with a lawyer would make you feel more comfortable before making an offer, please do seek an attorney’s interpretation. Homsby can connect you with one of our trusted attorney partners.  

And remember, Homsby is here to guide you with the services you need to feel confident to purchase your home and save you the most amount of money while doing so.