I viewed the RE contract form 'CBS1 Contract to Buy and Sell, Residential" on Colorado.gov. It is very lengthy. I have viewed the purchase agreements and assignment agreements on BP. Do any Colorado Wholesalers have examples of the forms they use for each? I am hoping to find a simplified form that someone with more experience than myself already knows is legal in Colorado. It would be greatly appreciated.
@Kenya McCormack it is my opinion that the standard form contract protects both parties equally and a well written contract provides a competent buyer with more that enough safeguards. As for sellers becoming overwhelmed with all the pages. I have found that telling them it's the state authorized form provides them with more security than having a one or two page document. I have talked to a couple local RE attorneys and they agree. It is their position that anyone using a non-standard form contract would have egg on their face in front of a judge. It would do one of two things, make it look like you are trying to pull a fast one on the sellers or look like you are ignorant of real estate law. Neither would be good.
If the contract overwhelms you then there are title companies that sponsor classes that cover the contract on a line by line basis. It's part of continuing education required for licensed brokers. You would do well to take that class or attend a similar class from a local real estate school. Know this, every one of the lines in the standard form contract is there because of multiple cases where the subject was an issue in real estate transactions.
If assumption is the mother of all chaos...I can only imagine what ambiguity can do. I concur with @Bill S. 100%.
I assume there is not a state-approved assignment form, right? In Colorado, has anyone used the BP assignment form?
@Ross G. there is a section of the contract about assignment and a check box to be filled out allowing or disallowing assignment of the contract.
@Bill S. Thanks for pointing that out. So that checkbox allows the contract to be assigned, but then you need an actual assignment form. I'm guessing the form of assignment isn't as critical if seller has already agreed to an assignment in the sales contract? The BP form should work fine?
@Ross G. you only need that box to be checked for the seller. I suppose you could also have them sign a document acknowledging that you have assigned the contract but I really don't see why you would do that.
You would, of course, need an agreement with the buyer that is stepping in. There is no state form for that agreement. You should get that from you local attorney.
@Bill S Thanks for the information. Do you know the best way for me to find some of these classes on contracts that are offered by the title companies? I will inquire on some of the REI sites that I have joined as well.
Also, I previously held my RE license in TN. At this point I don't think I need to go this route. I really want to wholesale for now. Eventually I would like to flip/buy & hold. I know in TN it was somewhat costly to hang your license in a Broker's office. Costly, if you weren't actively working as an agent.
I see much discussion on whether or not investors should have their RE license. My question is what value would I offer to a broker if I was simply wholesaling and why would any broker want my license on their wall? Am I missing something? At some point I could list my own properties, etc with my broker, but for now?????
Thanks so much!
@Kenya McCormack I would think that for wholesaling, you're absolutely right--no need to have your license. There is one advantage, in that for a monthly fee you'd have direct access to the MLS to get comps and find expired listings. However, with the right connections and/or websites, you could probably get that (or close to it) anyway.
One option, since there are always advantages and disadvantages whether you're licensed or not, is to talk to your husband and see about one of the two of you getting your license while the other remains unlicensed. That way you'd get the best of both worlds. Just remember the licensed partner would always have to disclose that they're an agent.
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