Each year the Colorado Real Estate Commission (CREC) updates the contracts and forms we use in Colorado to buy and sell real estate. It is important to be ahead of these changes, especially in a highly competitive market like Denver Metro.
As real estate professions, we start learning about the changes for the next year in October. From there, we have what is called a “Red Line” class, which I already took (what can I say, I love this stuff!) and then in the new year, after the changes go into effect Jan 1, we are required to take a Commission Update class. These classes approach the same topic from different angles.
There are many changes to come next year — some minor and others much more detailed. There are five in particular that I am highlighting here for you — these are the five that stood out to me as changes that could have the greatest impact to the buyer experience.
For each topic, you will see what is new in 2022, what it replaces, and what it means for you. Expand each box to review in detail. Shoot me a message with any questions!
1. Seller commitments live past close
New in 2022
New language in the contract to buy & sell that certain seller commitments survive beyond closing.
Replaces
There was no such language in the contract, which left a buyer having little recourse after closing outside litigation.
What it means for you
If you are a buyer, you will have better protections built into the contract that exist after closing, specifically in the areas where the seller fails to replace or repair agreed inspection items, does not disclose adverse material defects, or conceals HOA violations.
If you are a seller, hopefully nothing changes as you were doing these things already! But if not, you are at risk of getting sued for failing to perform these commitments.
2. Buyers must choose an inspection path
New in 2022
Inspection Termination will expire the moment an Inspection Objection is sent to the Seller.
Replaces
Inspection Termination can be before, concurrent, or after Inspection Objection and Resolution.
What it means for you
After Inspection, buyers will choose a path forward: either to seek resolution or terminate.
Termination is still available to both parties on the resolution path if buyer and seller are unable to come to an agreement through the Inspection Resolution.
3. Better protection for your earnest money
New in 2022
A new commission form that combines the Amend/Extend with the Notice to Terminate.
Replaces
Waiting until the last minute and having to send a separate Notice to Terminate if the Amend/Extend is not agreed upon or signed by the other party.
What it means for you
Simply put, this is better protection for a buyer’s earnest money! Buyer will send an amend with the intent to continue the contract; however, now when the deadline expires, the contract immediately terminates and buyer is less at risk for default.
4. One loan checkpoint becomes two
New in 2022
Two new deadlines added to the contract to buy & sell:
- New Loan Terms Deadline
- New Loan Availability Deadline
Replaces
New Loan Termination Deadline goes away.
What it means for you
You have 2 loan checkpoints now instead of one! New Loan Terms is intended to focus on payments, interest rate, costs, and conditions that can be found in the Good Faith Estimate from your lender. New Loan Availability is tied to whether that loan and rate are still available after underwriting and lender review.
This should reduce bad faith blanket terminations using the old New Loan Termination Deadline to cover anything loan related.
5. Specify deadlines with date AND time!
New in 2022
A time of day (e.g. 8:00p MT) may be added to the deadlines for termination, objection, and resolution.
Replaces
All deadlines expired at 11:59p MT of the day specified (this will remain the default in 2022)
What it means for you
This is great for all involved! No more waiting for signatures or negotiating things like an Inspection Resolution until midnight.
These Changes Go Into Effect
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