CONTRACTS FOR WHOLESALING IN COLORADO!
Is there anyone in the Colorado area that would be willing to guide me in the correct direction so that I can get contracts for wholesaling. I'm looking for the purchase and sale agreement as well as the assignment contract. Thank you in advance!
Rental Property Investor · Denver, CO · Member since 2013 · 4k+ posts · 2k+ votes
9y
@Eddie Bazel welcome. This has been discussed a number of times. You can use the search feature (upper right hand corner) to locate previous discussion on this matter. Basically the Colorado Real Estate Commission has standard form contracts available online. There are different contracts depending on the different sale situation. These contracts can be made assignable by adding the appropriate language in the "additional provisions". There are lots of guru contracts running around out there but I wouldn't want to stand in front of a judge using one of those when these are so readily available.
Rental Property Investor · Denver, CO · Member since 2013 · 4k+ posts · 2k+ votes
9y
@Eddie Bazel welcome. This has been discussed a number of times. You can use the search feature (upper right hand corner) to locate previous discussion on this matter. Basically the Colorado Real Estate Commission has standard form contracts available online. There are different contracts depending on the different sale situation. These contracts can be made assignable by adding the appropriate language in the "additional provisions". There are lots of guru contracts running around out there but I wouldn't want to stand in front of a judge using one of those when these are so readily available.
Realtor · Denver, CO · Member since 2013 · 2k+ posts · 1k+ votes
9y
x2 on what @Bill S. said. Be cautious of homes in foreclosure as they require different contracts.
Spend the coin and meet with an attorney for language to put in additional provisions, or hire a Realtor that already has that language.
I'm now in the middle of a transaction with a client that bought a wholesale property on a "guru" contract. It's a mess, and he will probably lose the deal.
Aurora, CO · Member since 2016 · 32 posts · 11 votes
9y
@Bill S. Thanks for the link to the Colorado contracts!
This may be a simple question, but what would the assignment language in the "additional provisions" section looks like? (Probably not, "I know line 2.2 said this contract was not assignable, but we're going to do it anyway.")
Also, can I hand write that into the contract and have the seller initial it?
Rental Property Investor · Denver, CO · Member since 2013 · 4k+ posts · 2k+ votes
9y
@Dan Williamson You can really write any language that lets the seller know you can assign the contract. You can probably lift some language from a guru's wholesaling contact if you don't feel comfortable drafting your own. I have seen very simple language such as "this contract is assignable". What ever you use, it should be checked out by your attorney. What ever you do, don't use mine as attorneys are the only people licensed to draft contract language unless it is done by the parties to the agreement.
Chesterfield, SC · Member since 2017 · 142 posts · 73 votes
9y
I think disclosure is more important than the contract. You kill deals by not disclosing what you are doing not how glamours your contract looks. Simple and to the point is best. If you feel the seller needs more "official" pull out your state real estate contract. With bank it's anyones game because they have multiple lawyers that can and will get them out of any contract. To sum it up I don't care if you have best contract in the world you can still get sued and the deal can fall though. Discloser keeps that from happening.
I think disclosure is more important than the contract. You kill deals by not disclosing what you are doing not how glamours your contract looks. Simple and to the point is best. If you feel the seller needs more "official" pull out your state real estate contract. With bank it's anyones game because they have multiple lawyers that can and will get them out of any contract. To sum it up I don't care if you have best contract in the world you can still get sued and the deal can fall though. Discloser keeps that from happening.
But our Colorado State contracts are approved by the Division of Real Estate and are backed by case law. If I'm standing in front of a judge, I want a contract that has been tested rather than something that hasn't been.
Everything is fine until it isn't. When this kind of money is at stake, I prefer something with solid backing.
I think disclosure is more important than the contract. You kill deals by not disclosing what you are doing not how glamours your contract looks. Simple and to the point is best. If you feel the seller needs more "official" pull out your state real estate contract. With bank it's anyones game because they have multiple lawyers that can and will get them out of any contract. To sum it up I don't care if you have best contract in the world you can still get sued and the deal can fall though. Discloser keeps that from happening.
But our Colorado State contracts are approved by the Division of Real Estate and are backed by case law. If I'm standing in front of a judge, I want a contract that has been tested rather than something that hasn't been.
Everything is fine until it isn't. When this kind of money is at stake, I prefer something with solid backing.
Yea I hear that a lot. Well this is backed up by Law! The fact is that doesn't stop a suit and it doesn't mean jack if you don't back it up with disclosure. My contracts usually are backed up by affidavit with sellers signing they understand whats going on. What would you rather have. A contract that states the basics or a contract and a affidavit signed. Me personally I will take the latter every time because a judge will ask well Mr seller why did you sign this stating you understood if you didn't? This is why disclosure is more important.
Chesterfield, SC · Member since 2017 · 142 posts · 73 votes
9y
I would also like to add on to my other statement to maybe clarify and simply. A contract no matter who writes it is just a agreement to terms. It doesn't need to be written by a lawyer simplify because it holds up no more or less in court. The most important thing is to make sure you SPELL out every you need and promise. The more plan the better because your seller will understand it. I'm not saying a state contract is bad but simply stating if you think it is a one size fits all solution it's not.
Yea I hear that a lot. Well this is backed up by Law!
Our court system is based on case law. A signature on a contract is someone's agreement to the terms of the contract. That and consideration are the only things needed. A standard contract, backed by case law, will shorten or kill any lawsuits. A "one off" contract allows for too many interpretations that would have to be vetted in court.
I never said one size fits all. If you knew our Colorado contracts, you'd know there is room for variation. These contracts are well thought out, tested in the courts, and encompass 95% of real estate transactions out here.
Pueblo, CO · Member since 2018 · 11 posts · 1 vote
8y
@Bill S. Hello, Thank you for the info. I looked up the purchase and sales contracts for residential properties on DORA. It is a 17 page contract. I was just wondering how intimidating and confusing a contract like that would seem to a potential motivated seller that needs to get out of a bad situation as opposed to presenting them a 3 page contract. I wonder if something like that could scare potential sellers away from a wholesaler.
@Bill S. Hello, Thank you for the info. I looked up the purchase and sales contracts for residential properties on DORA. It is a 17 page contract. I was just wondering how intimidating and confusing a contract like that would seem to a potential motivated seller that needs to get out of a bad situation as opposed to presenting them a 3 page contract. I wonder if something like that could scare potential sellers away from a wholesaler.
If they are intimidated, all you have to say is that 95%+ real estate transactions use this STATE APPROVED form. They can also save money by not having an attorney look over your 3 pager.
Rental Property Investor · Denver, CO · Member since 2013 · 4k+ posts · 2k+ votes
8y
@Mechelle Detres I apologize for the delay. Basically I tell them, it's a state form and if you are selling a property there is lots of paperwork. No real way around that to protect all parties. I am licensed so I don't have a choice and tell them that. I haven't had a problem with it. Believe me, when you have someone who wants to sell, they will sign anything. If 17 vs 3 is a deal breaker, it's probably not someone you want to do a deal with anyway. 90% of those kind of deals end up going bad somewhere before they close.
Aurora, CO · Member since 2016 · 32 posts · 11 votes
8y
Hi all,
Thanks for the great info!
What sort of contract do you use between the wholesaler and the end buyer, if any? Or do you just bring the end buyer to close and have them sign as the "assignee"?
What sort of contract do you use between the wholesaler and the end buyer, if any? Or do you just bring the end buyer to close and have them sign as the "assignee"?
If you want to get paid, then you need an agreement. You should spend the coin and hire an attorney for anything beyond a DORA contract.