On Thursday I found out that on Monday I needed to submit this, my first article. Good thing I was in Steamboat Springs for the 25th Annual Colorado Bar Association Real Estate Symposium, where I learned some new and relevant legal material that affects our lives as Summit County Realtors. Buckle up, here we go.
I. Forms Highlights
By now we are used to getting new Colorado Real Estate Commission (CREC) forms every January 1. The year 2008 will be no different. During the 2007 legislative session, our State legislators decided that the public, when buying a residential property or residential vacant land, must know where the water comes from. (House Bill 07-1156) Voila . . . A new disclosure called the Water Source Disclosure, where the Seller must disclosure whether the water source is a well, water provider, or other source of water. Listing agents will probably want to get this disclosure at the same time as the Square Footage Disclosure and the Seller’s Property Disclosure.
Speaking of Listing Agents, a new proposal for the forms is calling the listing agent the “Broker working with the Seller.” As you might imagine, the old “Selling Broker” would now be the “Broker working with the Buyer.”
Another proposal for the Contract to Buy and Sell Real Estate is changing the New Loan Contingency paragraph. No more filling in interest rate, amortization and monthly payments. The buyer will have the right to exercise this contingency if he or she does not get a loan in his or her “subjective discretion” by the loan conditions deadline.
II. Mortgage Brokers
Attention affiliate mortgage brokers!! Because of the drama and trauma of subprime loans, ARM’s, and other non-conventional mortgages going into foreclosure, especially in Colorado, our legislature has laid the blame on your profession. Their solution: pass laws regulating mortgage brokers. Effective January 1, 2008, most mortgage brokers making loans in Colorado will be required to be licensed, have fingerprints on file and complete criminal background checks, carry E&O insurance, and complete continuing education. (SB 07-203). Mortgage brokers will also be required to provide clients with closing documents at least one day prior to closing. (Read that sentence again please!) It will be interesting to see how this requirement plays out in practice. Will lenders really have documents ready a day before closing? Without this delivery, will closings need to be delayed, thus putting the earnest money of the buyer at risk? As you might expect from a new law, it raises more questions than provides answers. If you are a mortgage broker and unaware of this new rule, go to http://www.dora.state.co.us/real-estate/mortgagebrokerregistration.htm to learn more.
Signing out from Frisco – see you next month.