COLORADO CLOSINGS - MacIntosh Real Estate · PDF fileCOLORADO CLOSINGS (24 Credit Hours) ......

COLORADO CLOSINGS (24 Credit Hours)

Table of Contents

Introduction and Directions for Closings course – 1

PART I – INTRODUCTION TO CLOSING STATEMENTS – 2 “General Proration and Settlement Concepts” – 5

PART II – CLOSING EXAMPLES – 8

Closing Example #1 - A Simple Real Estate Transaction – 8 Closing Example #2 - Final Settlement Through Lending Institution - 14 Closing Example #3 - Final Settlement When a Loan is Assumed – 21

PART III – CLOSING PROBLEMS – 28

Contract, Note & Deed of Trust and Closing Problem #1 – 28 Contract, Lender Documents and Closing Problem #2 – 45

Closing Problem #3 – 82 Closing Problem #4 – 85

McDougal to Smith – Contract Scenario for Closing Problem #5 – 89

Listing Contract Problem – 89 Listing Contract (blank) – 90 Sales Contract Problem – 98

Sales Contract (blank) – 99 First Counterproposal Problem – 116

Counterproposal (blank) – 117 Second Counterproposal Problem – 120

Counterproposal (blank) – 121

PART IV – FINAL CLOSING EXAM – 80 Questions Closing Problem #5 – 124

Blank Worksheets to complete (2) – 126 Final Exam Questions #1 through 25 – 128

Closing Problem #6 – 129


Closing Problem #7 – 137


Individual Closings Questions #68 through 80 - 144

CLOSINGS (24 credit hours)

INTRODUCTION and DIRECTIONS PART I of this course contains an introduction to closings and prorations, and explains RESPA (the Real Estate Settlement Procedures Act). This information is essential to understanding and properly solving the closing problems. The solutions to the problems are not common sense, and even a background in accounting probably won't help. The closings methodology is entirely unique, and must be understood thoroughly before attempting to solve the closings questions on the state Licensing exam. PART II reproduces the entire “Closings” chapter from the Colorado Real Estate Manual. This section acquaints the student with the items that are typically associated with three types of closings: A SIMPLE REAL ESTATE TRANSACTION; FINAL SETTLEMENT THROUGH A LENDING INSTITUTION; FINAL SETTLEMENT WHEN A LOAN IS ASSUMED. Each item is described, and then shown on a simple settlement sheet. PART III of the Closings course is exclusively copyrighted material of the MacIntosh Real Estate School. The student is given four problems to fill in contracts and forms, (just like the FORMS chapter - Ch. 21 - in the Colorado Law and Contracts course,) and closing worksheets in order to become acquainted with the closing process and the closing problems contained in the Colorado portion of the state broker licensing exam. Problem #1 is a basic Assumption with a Promissory Note and Deed of Trust for background. Problem #2 is a New Loan problem that starts out with the same order-of-events that a real estate Closer uses, then gives you Loan Company closing figures, a payoff statement, a title commitment and Sales Contract as sources of information that you will need to complete the worksheet. For informational purposes only, we then show you what a “real” settlement sheet, HUD-1, Truth-In-Lending Disclosure, Promissory Note and Deed of Trust would really look like if this were a “real” closing. Problem #3 is and Assumption with a Seller Carry-back loan, and Problem #4 is another sale with New Loan worksheet to prepare. Finally, you must prepare a contract and counterproposal for a fictitious transaction that is the basis for Part One of the Final Examination (Questions 1 - 25) PART IV is the final examination. The Closings final exam consists of 80 questions, and each question is worth 1.25 points. You must submit answers for all 80 questions and achieve a score of 75% or better to pass the Closings final exam and receive credit for the Closings course. The Closings final exam can be challenging, but you will find the Closings Q&A resource (www.macrealestate.com/CLOSINGSQ&A.htm) very helpful in interpreting the wording of the problems, how to calculate certain figures and where on the worksheet they should be entered.

MacIntosh Real Estate School Closings Course

Copyright 2016 - All Rights Reserved 1 Colorado Closings (24 Credit hrs.)

http://www.macrealestate.com/CLOSINGSQ&A.htm

In Section I of the exam (Closing problem #5), you must use some of the background provided in the McDougal to Smith contract scenario at the end of Part III, and then complete a “new loan” problem by filling in a worksheet based on information given, and answer Questions 1 through 25 based on the worksheet answers. (The question numbers for these Questions 1 through 25 are located within the blank closing worksheet you have filled out. You will answer the questions based on what dollar figure, if any, you have placed in the particular row and column in which the Question number appears.) In Section II of the exam, (Closing problem #6), you must complete an Assumption worksheet based on the information given in the fact situation and Assumption statement. You will then answer Questions 26 through 50 based on the figures in your worksheet for this problem. Section III of the exam, (Closing problem #7), requires you to fill out another Assumption worksheet based on a given fact situation, and then answer Questions 51 through 67. Section IV of the exam contains 13 general closings questions, which are presented in the same style as questions on the state license exam. (Examinees will not be required to complete a worksheet and the facts of each closings question on the license exam are independent of any other closing question.)

~ PART I - INTRODUCTION to CLOSING STATEMENTS

A real estate closing, or settlement, is the formal procedure by which title passes from seller to buyer and a final accounting is given for all funds received or paid. Closing procedures vary from state to state and even within the borders of a single state. In Colorado, closings are normally conducted by title companies. Real estate brokers, attorneys or independent closing agents may also conduct closings. The question of who conducts the closing is a contractual matter between buyer, seller and closing entity. Although real estate closers are not regulated, Colorado Insurance Regulation 89-2 requires that title companies close, real estate transactions only pursuant to written instructions. The Real Estate Commission has developed a set of. closing instructions which may be used by title companies, brokers or any other closing entity and recommends that these be completed at the time the contract is negotiated. Real estate brokers are required by Rules E-4 and E-5 to provide copies of complete and accurate closing statements to buyers and sellers for any transaction in which the broker assists or acts in an agency capacity. The listing broker and any cooperating licensee must carefully review their



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respective closing statements for accuracy even if they will not conduct the actual closing. Failure to properly review closing documents could result in charges of incompetence or in a breach of the broker's statutory or fiduciary duty. A licensee who attends the closing must sign the settlement statement and is primarily responsible for providing a proper closing statement to the party assisted or represented. An associate must deliver a copy of the statement to the employing broker immediately after the closing. Although buyers and sellers may be charged a fee for closing, no fee may be charged for preparation of legal documents except by an attorney representing the buyer or seller. The Conway-Bogue decision granted real estate brokers the right to prepare certain legal documents, but prohibits licensees from charging a separate fee for such service. The companion Title Guarantee case specifically prohibits title companies from preparing legal documents. Today title companies only fill in blanks on legal documents under explicit instructions from the broker responsible for the closing. In Colorado, disbursements from closing may be made only after the closing entity has received "good funds" (C.R.S. 38-35-125). Good funds are considered to be cash; electronically transferred funds; certified, cashier's or teller's checks; and other funds which are either received in sufficient time prior to closing to be eligible for immediate withdrawal or are guaranteed by the depository on which they are drawn. With respect to real estate transactions, to "prorate" means to distribute or allocate shares of on-going income and expense items to the proper parties when the property changes ownership, according to the contract or governing law. Prorations are generally required for property taxes, rents, on-going association assessments, property and mortgage insurance, interest on loans, and for water and sewer. These items may be paid "in arrears" or "in advance". If the payment is due at the end of the benefit period, it is paid in arrears, such as Colorado property taxes. If the payment is required at the beginning of the period, it is made in advance, e.g., property insurance or monthly rent. The "proration triangle" illustrated below is a useful tool for dividing payments into the on the buyer's or seller's settlement statement. The left side of the triangle represents the period of ownership for which the seller must pay. The right side represents the period of ownership for which the buyer must pay. The base of the triangle represents the actual number of days in the payment period. In the approved Colorado contract forms, the buyer owns the property all day on the day of closing, and for the Colorado portion of the broker licensing examination, all prorations are done (unless otherwise stated) using a 365 day year and the actual number of calendar days in the monthly period. In




actual practice, and for the general part of the licensing examination, other periods may be used, i.e. a 360-day year and 30-day month. The general concepts of HUD and Colorado settlements, prorations and real estate mathematics are discussed more fully in other parts of this manual.

The prorated amount = $ amount paid in advance or due at closing, Divide by the total number of calendar days in the period (carry to 3 decimal places) Multiply the actual number of calendar days used.

All charges or debits are made in accordance with the sales contract and closing instructions. A debit to the seller represents money which the seller will not receive. A debit to the buyer increases the amount the buyer must bring to closing. A credit to the seller increases the seller's proceeds. A buyer credit reduces the amount the buyer must bring to closing. Note that the sum of the seller's credits must all be paid for by the buyer in some manner. If not specified in the contract, a charge is made against the person who receives the benefit, or according to government regulation or local custom. In Colorado, the buyer is considered the owner of the property all day on the day of closing, and any prorations are made accordingly. Day of Closing Who Benefits?

Seller’s ownership ends on Buyer’s ownership begins If paid in arrears (after closing),

The day before closing on the day of closing the buyer will make the next full pay ment, which covers part of the

$ Amount paid here covers $ Amount paid here of the time the seller owned the the next period (in advance) covers a prior period property. At closing, the seller

(in arrears) owes the buyer for the number of days the seller used.

If paid in advance (before closing),

the buyer benefits by the use paid by the seller. The buyer owes

Time Line the seller for the actual prepaid days buyer will use.

Date Paid Total Days in Period Next Payment Due

Following this next article are examples that illustrate the preparation of several real estate closing statements. While not all encompassing, they provide a good illustration of closing procedures and requirements. The illustrations assume selection of certain options available in the contract forms and are not intended to be all inclusive; all fees charged and interest rates used in the following illustrations are assumed and may only approximate actual market rates. The provisions of the contract govern who pays for certain items and how they are prorated in the settlement. The first example assumes that the broker is conducting the closing at the brokerage office.




“General Proration and Settlement Concepts” (reproduced from Colorado Real Estate News, June 1997)

This is an overview of the more common general concepts utilized for preparation of settlement statements in Colorado. You should read this carefully – because it will affect your figures on the worksheets – especially the correct answers on the final exam! Commission approved listings and contract forms generally call for the proration of applicable real estate property taxes, owner association dues, rents, water and sewer charges, mortgage interest, mortgage insurance premiums or other items. Such prorations are made to (not through) the date of closing, subject to the final written agreement between the parties. This means that the day of closing, the "settlement date", is the buyer's responsibility unless otherwise agreed. (The "date of proration" in the heading of the Commission approved settlement forms serves as a remainder of this contract provision). Any amendment of the contractual agreement or negotiated closing instructions should be written, signed and retained by the broker and parties concerned. The closing entity must close according to the terms of these governing documents. The broker or a qualified and designated licensee must now attend each closing and attest (by signature) to the accuracy of the settlement statement prepared for each party assisted or represented (see Rule E-5,d, and e, as amended). To prorate means to make a proportionate distribution or allocate a share of an expense paid in advance or in arrears to the appropriate party. Prorations are generally made using the actual calendar days in the period, i.e. month, year, etc., but a lender may prescribe a different daily rate for proration of loan interest. Decimals should be kept to three places in computations and the final result rounded to the nearest cent. Debits to the seller reduce the final amount of proceeds due to the seller; debits to the buyer increase the buyer's cost to close the transaction; debits to the broker on the worksheet for settlement represent amounts received (deposits to an escrow account) by the broker or closing entity. Credits have the opposite effect on amounts due to/from the parties, or funds held in escrow by the broker/closing entity. Credits to the broker columns on the worksheet will be paid out after the closing by various checks. "Knuckle Rule." This memory aid can be used to determine the actual days in the monthly proration period. Starting on the top of the smallest left knuckle on one hand and moving toward the thumb, name the months in order. Top of the knuckle is 31 days, a "valley" between the knuckle is 28 days for February (29 for leap year) or 30 days. When you are at the first knuckle (July) move back to the top of the smallest knuckle and count through December. Property Taxes and Assessments. Taxes in Colorado are paid in arrears (after the year for which they were assessed). The total tax amount prorated






equals the property's assessed valuation times the mill levy (or tax rate). A mill is $.001; the assessed valuation is a percentage of the fair market value. The tax proration is made by dividing the total tax amount for the calendar year immediately prior to closing by the total calendar days in the year of closing to get the daily rate. The daily rate is multiplied by the number of days from and including January 1 to (but not including) the day of closing. This amount normally is a debit to the seller and credit to the buyer. A licensee should make careful inquiry about any additional and unusual entries for property taxes on the settlement statements. Special assessments, unless assumed by the buyer, are paid by the seller and are not prorated. Homeowner association dues are usually paid in advance and are prorated for the applicable period. Mortgage Interest - Assumptions. The daily interest to be charged on an assumption is often shown on the assumption statement and should be used for calculating the proration. If not shown, the interest is determined by multiplying the annual interest rate times the unpaid loan balance as shown on the lenders assumption statement. The monthly interest is then computed by dividing the annual interest amount by 12 months. The daily rate of interest is the monthly amount divided by the actual days in the month of closing. The daily rate is then multiplied by the number of days in the month that the seller owned the property and is debited to him/her on the settlement statement. If the interest was paid in advance, the daily rate is multiplied by the number of days in the month of closing that the buyer owned the property, and is charged to the buyer on the settlement statement. Any assumption of an FHA mortgage originated on or after September 1, 1983 requires careful investigation of the sellers original settlement statement (obtained when s/he purchased the property) for the amount of any prior up-front mortgage insurance premium and any risk-based insurance premium to be prorated at the current closing. In an assumption closing, the debits will always equal the credits on every line; there are normally two and never more than three entries per line. Entering the lenders loan assumption statement data on the worksheet first may simplify the manual preparation of the settlement worksheet. The unpaid loan balance being assumed goes on line 3. Any delinquent loan payments are charged to the seller on line 36. Mortgage interest (when paid in arrears) is prorated and charged to the seller on line 6. Mortgage Interest - New Conventional Loans. The computation of the daily interest for a "new loan" differs from the method used for an assumption and is not really a proration, but a specific charge to the borrower. Most lenders today charge the buyer interest separately at closing for use of the money loaned, from the date of the loan to the date for which interest is covered by the first payment. The new loan interest charged to the buyer is often computed by the lender. If not, the interest is computed by: (1) multiplying the



face amount of the loan by the interest rate; (2) dividing that amount by the number of days in the year of closing (usually 365 unless the lender specifies otherwise) to get the daily rate (three decimal places), and (3) multiplying the actual number of days from the date of the loan to the date for which interest is covered by the first payment, usually the end of the current month. The amount of interest charged is debited to the buyer and credited to the broker, unless the lender has deducted the amount from the gross loan amount on the new loan statement. New loan settlements also differ from assumptions in that there may not be equal debit and credit for each line when the lender closes the new loan and pays certain amounts from the gross loan proceeds to protect its security interest as a first lien, and then remits the net loan proceeds to the closing entity (or broker) for final settlement with a particular buyer and seller. In this case, the net loan proceeds will be debited to the broker on the worksheet, and the gross loan amount will be credited to the buyer; the remaining single entry items per new loan statement will then be made to the appropriate party on the worksheet. In the case of a new loan, the broker or closer will normally pay the bills remaining after the lender has withheld funds for payment of items to insure it is the first lien-holder on that property. The broker must verify that enough money has been collected to pay all the closing bills and any amount due the seller (or buyer) by the following reconciliation process: the total lender debits must equal total lender credits. The exception to the preceding paragraphs in this section occurs when the broker closes an “owner-carry loan”, or when a new loan is closed on behalf of the lender and the broker makes all payments on behalf of the parties to the sale. In this case, there will be equal debits and credits on each line of the worksheet. The total amount of the loan will be credited to the buyer and debited to the seller (for an owner-carry) or the broker, with remaining debit/credit entries for each line will be debited or credited to each party per the contract or the lenders new loan statement. After the broker has completed the entries for the new loan, the remaining closing entries will be made with the debits equaling the credits for each line. Utilities. Water, sewer, electricity charges may be paid in advance or in arrears and are prorated between the parties. The approved contract form provides proration to the date of closing, but this may be amended to the date of possession. Security deposits are not prorated but may be transferred to the new owner (with a separate written notice to the tenant - see Rule E-1 and the Commission Position Statement) for continuing leases on the settlement statements. The sellers broker should remind the seller to apply for refund on any utility or gas equipment deposit refundable from the service provider after closing.



PART II CLOSING EXAMPLES

A SIMPLE REAL ESTATE TRANSACTION The closing of the following real estate transaction illustrates the broker collecting and disbursing all the money involved in the closing through the sales escrow account. This situation is usually true only when a new loan is made to the purchaser by a private lender. In practice this case is referred to as an "in-house" closing. If the purchaser's loan were made by a commercial lending institution, the lending institution would insist on making some of the disbursements to insure a superior lien on the property. A commercial loan closed by a title company is illustrated later in this chapter. The following paragraphs describe the computation of the charges and credits to each party for this basic transaction, and the worksheet result is shown several pages following. This transaction is then illustrated as a closing by a title company on a new commercial loan, and then as an assumption of the seller's existing loan.

Facts. On April 22nd, you secure a written offer from Harold R. and A. Jean Blue with a deposit of $5,000. The buyers agree to purchase at the listed price of $203,750 if the sellers would accept a subordinate or second note and trust deed in the amount of $8,000.

The sellers accepted the offer and authorize you to procure a title policy commitment. The sellers moved to another state two years prior to this closing. You deliver the title commitment to the buyers and to the lender for examination by their respective attorneys. The buyers' loan application was approved in the amount of $190,750 at 7½% interest per year amortized monthly over a period of 30 years. The first payment on the new loan is due on July 1st, the first day of the first complete month after the loan closing date.

Both buyers and sellers authorize you to collect all funds and to make all disbursements. The closing is held on May 10th.

From the contract between the parties and from other sources, you gather all information necessary for final settlement. The following an explanation of how each item is charged and adjusted on the worksheet. Each numbered item is identically numbered on the worksheet. Worksheet items not pertinent to this transaction are omitted. 1. Selling Price - $203,750. Credit seller and Debit buyer. 2. Deposit - $5,000. Credit buyer and Debit broker. Note that each debit to the broker is money that the broker has collected or will collect. A broker credit is money the broker has paid or will pay out of the escrow account. 3. Trust Deed payable to the private lender to secure the note -




$190,750.Credit Buyer (money the buyer does not have to bring to closing, but will be applied to the purchase price. 4. Second Trust Deed payable to John R. and Mary L. Gray (sellers) to secure the second promissory note - $8,000. Credit Buyer the same as the first trust deed and Debit Seller who will receive the $8,000.00 in the form of future payments made on the note by the purchaser. 5. Existing Trust Deed payoff to the Acme Loan Co. - $46,450. Credit Broker since the broker will write the payoff check. Debit Seller because it is the seller's obligation. In order to determine the amount of the payoff, you requested a payoff statement from the Acme Loan Co. This statement shows the net balance after adjustments of interest, penalty and credits the seller may have in the way of tax or insurance reserves. 7. Title Insurance Premium - $525.00. The seller has agreed by contract to give evidence of merchantable title, therefore Debit Seller and Credit Broker who will write the check to the title insurance company. Mortgagee's title insurance premium - $50.00. The private lender has requested this insurance. Debit Buyer and Credit Broker. 10. & 38. Title Examination by the Buyer's attorney - $75.00. Title examination by the lender's attorney - $75.00. Debit both of these amounts to the buyer and Credit Broker who is making all payments to both attorneys. 11. Recording Warranty Deed - $6.00 ($5.00 plus $1.00 surcharge). The buyer is the primary beneficiary of recording the warranty deed since it will make the transfer into the buyer’s name a matter of public record. Debit Buyer and Credit Broker, who will pay the county Clerk and Recorder's fees. 12. & 14. Recording: 2 New Trust Deeds - $5.00 per page x 4 pages = $20.00 to record each deed of trust. Both are the obligation of the buyer. Debit Buyer, Credit Broker. 13. Recording: Release of Existing Trust Deed - $16.00. This releases the original Acme Loan Co. lien, which the seller wants recorded to prove it was cleared. Debit Seller and Credit Broker. 15. Documentary Fee - $20.38. State law (C.R.S. 39-13-102) requires that a documentary fee be paid by the person recording an instrument of conveyance. This fee is paid to the Clerk and Recorder and is in the amount of one cent for each one hundred dollars of consideration paid for the property (exclusive of any loan). If the total consideration is $500 or less there is no fee. Debit Buyer, Credit Broker. 16. Certificate of Taxes Due - $15.00. This certificate from the county



treasurer's office is the buyer's insurance that the county may not later lay claim for any taxes other than as stated on the certificate. (Any loss resulting from an error in a tax certificate shall be paid by the county that such treasurer represents.) Debit Buyer and Credit Broker. In this example, in the absence of contract provision to the contrary, the person who benefits pays for the document. However, the Department of Housing and Urban Development (HUD) requires this to be a seller charge on government insured loans (FHA). The broker licensing examination will specify the party to be charged. 17. Taxes for Preceding Year: $2,051.30 was paid for the year preceding closing (by the seller) and annotated as such in the left hand column, but are not entered in the settlement worksheet debit/credit columns. If not paid, they would be Debit Seller, and in this case, Credit Broker, who would pay them to protect the private lender's security interest in the new loan. In the case of a new commercial loan, the lender would deduct any unpaid prior taxes from the loan and pay them for the same reason. If the seller's loan is assumed and has a tax reserve, then the prior tax amount would be transferred to the buyer as the lender will later pay these taxes. 18. Taxes for Current Year: $724.98. This is a prorated amount based on last year's taxes ($2,051.30) per election in the contract All Commission-approved sales contract forms state that taxes shall be prorated to (but not including) the closing date. The seller owned the property from Jan. 1 through May 9. May 10th is the first day of the buyer's ownership. Therefore, Debit Seller and Credit Buyer 129 days taxes at $5.620000 per day. This is an adjustment between the parties and not a payment that the broker must make, as the current year's taxes are not due until next January 1. Prorating is based on the actual number of days in the year, assumed here to be 365-days. Taxes may also be expressed as a mill rate per $1,000 of assessed valuation. If the assumed assessed tax valuation is 12.86% of the actual value of $203,750, or $26,202.25 and an assumed mill levy is 78.28717 mills, the current taxes are computed as [($203,750 X 12.86% divided by 1,000) X 78.28717] or $2,051.30. 19. Tax Reserve - $854.65. The private lender will collect its loan in monthly installments. With each installment the lender will also collect one month's taxes and hold it in reserve so that sufficient funds are on hand to pay the yearly taxes when due. This will require a five month tax reserve at $170.93 per month be collected at closing because the first loan installment is not due until July 1st. Debit Buyer and Credit Broker. The purpose of the tax reserve is different from the proration of taxes; these amounts have no relationship with each other. The basis for this charge is the lender's own loan requirement and state law, C.R.S. 39-1-119. This law provides that any amount held on May 20 in excess of 3/12 of the taxes paid that year must be refunded to the borrower on or before May 30 of the year in which the taxes were paid; the payments to a reserve escrow account must be adjusted



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annually upon reasonable belief of substantial improvements to the property or upon official notification of an increase in the actual amount of taxes levied; and, that failure to make a refund is subject to interest and penalty. (See 20. for information on obtaining the text of printed state statutes). 20. Special Taxes - $4,075.00. A Colorado closing entity must withhold the lesser of 2% of the sales price OR the entire net sales proceeds amount in any transaction in which the Seller is or is going to be a non-resident person or corporate entity after closings. This withholding is against any future income tax liability and must be remitted to the Colorado Department of Revenue within 30 days alter closing. Withholding is not required for sales in the amount of $100,000 or less. Debit Seller and Credit Broker (who will file the form(s) (DR 1079 or 1083) for payment of the tax.) Further instructions and forms may be obtained by calling (303) 232-2446. The text of the basic law is printed in Chapter 12 of this manual, C.R.S. 39-22-604.5, or by statute number at the following website: http://165.212.243.216/stat99. Colorado tax forms and instructions are found at: http://www.state.co.us/gov dir/revenue. 23. Premium for New Insurance - $675.00. The lender requires that a one-year hazard insurance policy be purchased, and requires the buyer to pay. Debit Buyer, Credit Broker. 24. Hazard Insurance Reserve - $112.50. Lender requires that a two-month reserve be maintained in escrow. Debit Buyer and Credit Broker. 27. Loan Origination Fee - $1,907.50. This is the lender's fee for making the loan. Debit Buyer and Credit Broker. 29. Interest on New Loan - $862.29. Since the buyer's first loan installment will not be due until the 1st of July (which will include interest in arrears for the month of June), and the loan is made on the 10th of May, the lender requires that the interest for May 10 through May 31 (22 days) be paid at closing. Debit Buyer Credit Broker. On this example and the Colorado part of the license exam, interest on the new loan is computed by using actual days in the year and in each monthly period.

$190,750 X 7.5% / 365 DAYS = $39.195205 per day. The interest on the new loan is $39.195205 X 22 days = $862.30.

In actual practice this charge would most likely be computed by the lender and by using a different method. It should be noted that the method for calculating the interest on a new loan is different from that used to prorate interest on a loan to be assumed. See the loan assumption case later in this chapter for computation of assumption interest. 30. Survey and/or Credit Report - $115.00. Both the buyer and "lender" desired a survey of the property which cost $65.00. The credit report cost $50.00. This combined amount is Debit Buyer and Credit Broker.



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32. Water - $55.09. The seller paid a $96.40 water bill in advance on April 1st for three months (91 actual days). The seller will have used 39 days of the 91-day period and the buyer will have the water use pre-paid for 52 days. Therefore the Debit Buyer and Credit Seller $55.09 ($96.40 -. 91 days X 52 remaining days) Broker writes no check here, it is merely an adjustment between the parties. 37. Broker's Fee - $11,400.00. Debit Seller, Credit Broker. 39. Document preparation and Closing Fee - $100.00. The closing instructions and sales contract specify the amount and who will be charged for allowable closing costs. In this case, the parties agree to split the charge equally. Debit Buyer and Seller each $50.00, and Credit Broker the full $100.

Sub-Totals. The totals of each column of debits and credits are made for a better understanding by the parties in determining the balances or differences between the debits and credits of each party.

Balance due to Seller - $132,564.11. This amount is the difference between the total of the seller's credits and debits. This amount is also recorded as a credit to the broker since the broker will disburse all money. This is the amount seller will actually receive in cash for their home. Seller will actually receive an $8,000 note and other benefits, but the $132,564.11 is the amount that they will actually receive in "good funds" at closing. There are instances in which the seller must actually pay cash in order to accomplish the sale and closing but these instances are the exception.

Balance due from Buyer - $4,188.43. This amount is the difference between the total of the buyer's credits and the buyer's debits. This is the amount of cash that the buyer must bring to accomplish the purchase at the time of final settlement. This amount is also recorded as a Debit to the broker since the broker will collect this money.

Totals. The total of the debits and credits, as they pertain to each party must equal each other after entering the amount due to or from the proper party.

Final Statements of Settlement. The following worksheet will provide you with the itemized dollar amounts to transfer to the final statements of settlement (Commission Approved Form SS61-05-04). However, in the event that the closing is held in a financial institution pursuant to a loan statement (and this would be the more usual practice), the lender and closing entity would collect and disburse many of the costs on the broker's behalf. The amounts collected or disbursed by the lender and closing entity may appear in the "Broker's Column," by industry custom; it should be clear from the real estate sales contract and/or closing instructions that the broker never actually held or disbursed these funds. The tables on the pages following the settlement sheet illustrate how the lender, closer and/or broker would account for funds pertaining to a new commercial loan and final settlement payouts per Commission Rules E-4 and 5.



CLOSING EXAMPLE ONE - A SIMPLE REAL ESTATE TRANSACTION

SIMPLE R/E TRANSACTION SELLER BUYER BROKER (Disbursement)

Description DEBIT CREDIT DEBIT CREDIT DEBIT (In) CREDIT (Out)

1 Selling Price $203,750.00 $203,750.00

2 Deposit paid to Mile High $5,000.00 $5,000.003 Trust Deed Payable to Lendr $190,750.00 $190,750.00

4 Trust Deed - Payable to Slr $8,000.00 $8,000.00

5 Trust Deed Payoff to Acme $46,450.00 $46,450.00

6 Title Ins. Prem.-Mortgagee $525.00 $50.00 $575.00

10 Title Exam by Buyer's Atty $75.00 $75.00

11 Recording: Warranty Deed $6.00 $6.00

12 Recording: 1st Deed of Trust $20.00 $20.00

13 Recording: Release-Acme $16.00 $16.00

14 Recording: 2nd DOT (to slr) $20.00 $20.00

15 Documentary Fee $20.38 $20.38

16 Cert. Of Taxes Due $15.00 $15.00

17 Taxes Prior Yr-Pd $2,051.30

18 Taxes for Current Year $724.98 $724.98

129 days x $5.620 per day

19 Tax Reserve - 5 months $854.65 $854.65

20 Special Taxes - 2% state $4,075.00 $4,075.00

23 Premium for New Hazard Ins $675.00 $675.00

24 Hazard Ins. Reserve - 2 mo. $112.50 $112.50

27 Loan Service Fee (Buyer) $1,907.50 $1,907.50

29 Interest on New Loan $862.30 $862.30

22 days x $39.195205 / day

30 Survey/Credit Report $115.00 $115.00

$65.00 + $50.00

32 Water/Sewer $55.09 $55.09

52 days x $1.059341 / day

37 Broker's Commission $11,400.00 $11,400.00

38 Title Exam by Lender's Atty $75.00 $75.00

39 Closing Document Prep. ______$50.00 ___________ _____$50.00 ___________ ___________ ____$100.00

SUBTOTALS $71,240.98 $203,805.09 $208,663.42 $204,474.98 $195,750.00 $67,374.33

DUE TO/FROM SELLER $132,564.11 $132,564.11

DUE TO/FROM BUYER ____________ ________________________ $4,188.44 $4.188.44 ___________

TOTALS $203,805.09 $203,805.09 $208,663.42 $208,663.42 $199,938.44 $199,938.44









FINAL SETTLEMENT THROUGH A LENDING INSTITUTION The Lender's Loan Statement. The worksheet shown on the previous page indicates that all payouts were made by the broker. In practice this may not always be true. When a new loan is secured, the lending institution may make some of the payouts in order to protect its interest as the holder of the first lien recorded on the property in the event of the borrower's default. The worksheet illustrating this case is found after the following information, and computation of the individual worksheet line items is previously described. The lending institution in this case will provide a loan statement showing the amount of the loan and the payouts it has made to close the loan. These payouts are deducted from the amount of the loan and the balance is called the "net loan proceeds." The loan company's check will be drawn in this amount and made payable to the purchaser who will then endorse it at closing to the closing entity. New Loan Statement Form. The various charges that a lending institution will make to protect their interest will vary from lender to lender. A loan statement from the lending institution using the data from the prior sample problem would probably appear similar to that which follows (bold amounts relate to corresponding entries on the worksheet following: Sample Lender's New Loan Statement Face amount of loan to Buyer: $190,750.00 Amounts charged by Lender to make the loan: Pay-off on existing note $ 46,450.00 Loan Origination Fee Charge @ 1% 1,907.50 Title Exam by Loan Company 75.00 Mortgagee's Title Insurance 50.00 Recording Fees Warranty Deed 6.00 Trust Deed (1st) 20.00 Release - Acme Loan Co. 16.00 Documentary Fee 20.38 Survey 65.00 Credit Report 50.00 Tax Reserve 854.65 Premium for New Hazard Insurance 675.00 Hazard Insurance Reserve 112.50 Interest on Loan May 10 - 31 862.30 Subtotal charges made by Lender: $ 51,164.33 Net Loan Proceeds $139,585.67



The loan statement above in no way relieves the broker of the responsibility to prepare and provide a closing statement for the buyer and seller. The loan company has made these payouts by deducting them from the amount of the loan regardless of whether such payouts are chargeable to the buyer or seller. Loan companies may also vary as to which of the costs they wish to collect and pay. The items deducted and paid for by the lending institution, are appropriately debited or credited by the broker as was one on the worksheet previous. Lenders are not concerned about which party pays a particular item, (unless the loan is governed by VA, FHA or other regulation.) The broker is required by Rule E-5(g) to reconcile the net loan proceeds shown on the loan statement (previous page), with the final payment due from the buyer and the final payment due the seller as (“Broker/Closer Column" on the worksheet following), or the on the new loan worksheet as below. This reconciliation may be done by the broker or closing entity on a computer or in any equivalent form:

Received Paid-Out *Net Loan Proceeds (Closing Entity) $139,585.67 Earnest Money Deposit (Broker Escrow) 5,000.00 Total Money Due from Buyer (Closing Entity) 4,188.44 Other payouts made by broker (Closing Entity): Title Insurance Premium 525.00 Purchaser's attorney 75.00 Broker's Fee 11,400.00 Recording Trust Deed (Second) 20.00 Tax Certificate 15.00 2% Colorado Withholding 4,075.00 Closing, document preparation 100.00 Total Amount Due Seller (Closing Entity) 132,564.11 Totals $148,774.11 $148,774.11 When the reconciliation above is made on the standard worksheet for settlement (SS61-1-71), the theory is the same. All debits and credits in the "Broker" column are understood by contract and closing instructions to have not been actually received by the broker, but are a listing of all the money actually collected or disbursed by the lender and/or closing entity in settlement of the transaction. Commission Rule E-5(g) requires the broker to maintain a copy of the reconciliation statement (or an equivalent form) in the transaction file and to make it available for audit by a representative of the Commission. Statements of Settlement (SS 60-7-71) given to the seller and buyer are more complete and informative than the worksheets illustrated in this chapter. Dates of



adjustments, names of payees of notes, etc., are shown on the final statement of settlement. Each statement must be prepared in conformance with Commission Rules E-4 and 5:

E-4. A real estate broker shall immediately deliver a duplicate of the original of any instrument (except deeds, notes and trust deeds or mortgages, prepared by and for the benefit of third party lenders) to all parties executing the same when such instrument has been prepared by the broker or the broker's employed licensee or closing entity and relates to the employment or engagement of the broker or pertains to the consummation of the leasing, purchase, sale or exchange of real property in which the broker may participate as a broker. For purposes of this rule, duplicate shall mean photocopy, carbon copy, facsimile, or electronic or electronic signature as defined in 24-71-101(1) C.R.S. Such broker shall retain a copy of the duplicate instruments for future use or inspection by an authorized representative of the Real Estate Commission. If a broker or the broker's agent prepares a mortgage or trust deed for the benefit of a buyer or seller, an unsigned duplicate of such security instrument, together with a copy of the note, unsigned or prominently marked “copy,” shall be furnished to the purchaser; copies shall also be retained in such broker's office for further use or inspection by an authorized representative of the Real Estate Commission. Cooperating brokers, including brokers acting as agents for buyers in a specific real estate transaction, shall have the same requirements for retention of copies as stated above, except that a cooperating broker who is not a party to the listing contract need not retain a copy of the listing contract or the seller's settlement statement. Pursuant to Rule E-3, a broker is not required to obtain and retain copies of existing public records, title commitments, loan applications, lender required disclosures or related affirmations from independent third party closing entities after the settlement date. (Changes effective March 1, 2000) E-5. Pursuant to 12-61-113 (1)(h), at time of closing, the individual licensee who has established a brokerage relationship with the buyer or seller either personally or on behalf of an employing broker, shall be responsible for the proper closing of the transaction and shall provide, sign and be responsible for an accurate, complete and detailed closing statement as it applies to the party with whom the brokerage relationship has been established. If signed by an employed licensee, closing statements shall be delivered to the employing broker immediately following closing. Nothing in this rule shall relieve an employing broker of the responsibility for providing an accurate, complete and detailed closing statement pursuant to 12-61-113(1)(h) and for fulfilling supervisory responsibilities pursuant to 12-61-113(1)(o) and 118 C.R.S. (a) Subject to rule E-4, an employing or independent broker with whom a brokerage relationship has been established, either personally or through an employed licensee, shall retain a copy of all closings, statements approved by the respective buyers or sellers for future use or for inspection by an authorized representative of the Real Estate Commission….



(d) If closing documents and statements are prepared by, and the closing is conducted by, an employing broker's company such broker is primarily responsible for the accuracy and completeness of the settlement statements and documents. (e) If a licensee with whom a brokerage relationship has been established is unable to attend a closing or review closing documents, another licensee may agree or be designated by an employing broker to review and sign a closing statement an will assume joint responsibility with the absent licensee for its accuracy, completeness and delivery. (f) A broker may transfer funds pertinent to a real estate transaction from a trust or escrow account to a lawyer or a closing entity acting on behalf of the broker at or before closing or final settlement. However, absent written specific instructions from the parties authorizing such a transfer, the broker will not be relieved of responsibilities in regard thereto. The settlement statements prepared by the lawyer or closing entity shall bear the names of the licensee who signs the statement and the employing broker if applicable. (g) If the real estate transaction involves a new loan made by the purchaser from a lending institution which deducts costs before disbursing the loan proceeds prior to final settlement, the loan proceeds must be reconciled with money due to or paid by the buyer and money due the seller after final settlement. A copy of this reconciliation must be kept in the broker's files and available for audit by a representative of the Commission. Signing the Statement of Settlement. On the settlement date all parties, including the broker, buyer and lender, must furnish good funds for amounts due. No disbursements may be made until all funds are available for immediate withdrawal as "good funds" in accordance with C.R.S. 38-35-125. The broker(s) attending the closing must sign, and secure the signed approval and acceptance of the buyer and the seller, on a copy of their respective statements for their own protection and for future inspection by the Real Estate Commission. The broker no longer needs original signatures on the copies retained in the office transaction file per C.R.S. 24-7 Broker Closing Records. The broker should retain copies of the pertinent documents listed under "The Office Transaction File/Retention of Records", given in the Escrow Accounts and Record Keeping course. Escrow Tax Reserve Account Refunds: Colorado law (C.R.S. 39-1-119) provides that refunds must be made from the tax escrow account held by the lender on May 30th of each year if on May 20th the balance exceeds three-twelfths of the taxes levied for the previous year. Internal Revenue Service Reporting -- Real Estate Sales: Generally, a



transaction that consists in whole or in part of a sale or exchange for money, indebtedness, property, or services, or any present of future ownership interest must be reported to the IRS on Form 1099-S: (1) Improved or unimproved land, including air space; (2) Inherently permanent structures, including any residential, commercial, or industrial building; (3) A condominium unit and its appurtenant fixtures and common elements, including land; (4) Stock in a cooperative housing corporation. An involuntary conversion under threat or imminence of seizure, requisition, or condemnation is generally reportable. A sale or exchange includes any transaction properly treated as a sale or exchange for Federal income tax purposes, even if the transaction is not currently taxable. However, there are several general exceptions for required 1099-S reporting. These are: (1) the sale or exchange of a principal residence, including stock ownership in a cooperative housing corporation, for $250,000 or less ($500,000 or less for married persons) and the person responsible for closing the transaction receives an acceptable “Written Assurance Certification” in the form prescribed by Rev. Proc. 98-20, 1998-7 I.R.B.32; (2) Any transaction in which the transferor is a corporation or considered to be under Regulation Section 1.6045-4(d)(2), a governmental unit, international organization, or exempt volume transferors; (3) Bequests, gifts, and financings or refinancing not related to the acquisition of real estate; (4) Full or partial satisfaction of a debt secured by the property, including foreclosure or transfer in lieu of foreclosure or abandonment; (5) A de minimis transfer, for which consideration is “$1.00 plus other valuable consideration,” or where it can be determined with certainty that the total money, services, and property received or to be received is less than $600; (6) Transactions involving interests in agricultural crops, subsurface, surface minerals, water, ores, other natural deposits, and timber (excluding timber royalties), whether or not severed from the land, when the transaction excludes the sale or exchange of real estate. Further information, instructions and forms should be obtained from professional legal counsel. I.R.S. materials may be obtained from: http://www.irs.ustreas.gov/prod/cover.html. Certain Cash Transactions: In general, each person engaged in a trade or business who, in the course of that trade or business receives more than $10,000 in “cash” in one transaction or two or more related transactions within 12 months, must file Form 8300 and give a copy to each party named in the form. Voluntary filings may be made for suspicious transactions of similar or lesser amounts. The report must be retained for five years after the date filed, and fines and penalties apply for failing to file required information. This report is not required if cash was received by a financial institution required to file a Form 8362 (Currency Transaction Report), by a casino reporting on Form 4789, by an agent who receives the cash from a principal and uses the cash within 15 days in a second transaction that is reportable on Form 8300 or 4789, in a transaction occurring entirely outside the U.S. except for its territories or possessions, or in a transaction not in the course of that person s trade or business.



http://www.irs.ustreas.gov/prod/cover.html

"Cash" means: U.S. and foreign currency, a cashier's check, money order, bank draft, or travelers check having a face amount of $10,000 or less that is received in a “designated reporting transaction.” Cash excludes a personal check drawn on the payer’s own account regardless of the amount. A “designated reporting transaction” means a retail sale (whether or not for resale) or the receipt of funds by a broker or other intermediary in connection with any sale made to ultimate consumers, any sale of consumer durable goods (tangible personal property with a price of $10,000 or more and a useful life of one year), a collectible item, or travel and entertainment that pertains to a single trip or event where the cost including related charges exceeds $10,000. “Cash” is not received in a designated reporting transaction if it constitutes the proceeds of a bank loan or is received as a payment on certain promissory notes, installment contracts, or from a down payment plan described in IRS Publication 1544. Download specific forms and instructions from the IRS website identified above. Federal Tax Liens and Payoffs. You may request a "Lien Payoff Request Form" and published information on lien release by FAX from the IRS Lien Processing Unit (303-446-1423). The IRS requests that persons using these forms reproduce additional copies for internal distribution.



FINAL SETTLEMENT WHEN A LOAN IS ASSUMED Introduction. The real estate transaction illustrated in prior sections involved a new loan which the purchaser secured. Now with the same data, the next case shows the purchaser assuming the seller’s first loan balance of $190,750.00, with no secondary financing or seller carry-back. As before, the sellers are considered non-residents after the closing. The worksheet for this assumption follows the facts below. The Assumption Statement. In various circumstances, a purchaser, with consent of the seller and lender, may assume and pay seller’s existing loan. Agreement to assume and pay the existing loan should be written in the buy/sell contract and the deed. The assumption statement prepared by the lending institution holding the existing trust deed or mortgage will contain the following information from which the closing entity may prepare a closing statement. All of this information will be as of a certain date, in this case, a closing on May 10. 1. The loan balance and term. The loan balance on May 1, is $190,750.00, due in 30 years. 2. The rate of interest, amount paid or the amount of interest earned but not yet due. It is assumed that the interest rate is 7.5%, paid in arrears. The next payment is due on May 1, and will have been made by the buyer prior to closing. The assumption statement would also show the amount of the any delinquent payments. 4. The tax reserve escrowed for the benefit of the mortgagor, which is assumed to be the same as in the prior examples in this chapter. 5. The insurance reserve escrowed for the benefit of the mortgagor, which is assumed to be the same as in the prior examples in this chapter. 6. The face amount, date, term and premium of the existing homeowners insurance policy, and whether or not paid. For this example, a new policy is obtained by the buyer in the amount of $675. 7. The loan transfer fee, $1,907.50, and a statement of what evidence the lender requires before transferring the loan, e.g., a copy of the contract, or a copy of the deed or abstracting to date after the conveyance. 8. New owner's monthly payment, including principal, interest, taxes and hazard insurance. This worksheet will use the same data from the prior examples in this chapter.



EXPLANATION OF OTHER CHARGES AND ADJUSTMENTS FOR A LOAN ASSUMPTION No real estate transaction will contain every type of charge or adjustment. All closings are similar, but each is different. The following will explain some of the more common types of charges and adjustments that a broker will encounter in practice. It should be remembered that although this entire chapter on closings ascribes obligations to the buyer or seller, any of these obligations may be reversed or changed by contract, unless prohibited by statute or government regulation. The numbering below conforms to that found on approved worksheets and statements of settlement. The completed worksheet is found following these facts. 6. Interest on Loan Assumed. When a sale is made “subject to” an existing loan, which is to be assumed by the buyer, and when interest is charged in arrears, as in this example, then any earned interest on the loan from the due date of the last payment to date of settlement should be a seller debit and buyer credit. If the trust deed were to state, however, that the monthly payment reflects interest paid one month in advance, interest should be prorated to the date of closing as a debit to the buyer and a credit to the seller. Computation of a daily interest rate for a monthly amortized loan with a current unpaid principal balance of $190,750 at 7.5 percent interest paid in arrears, closing on May 10 is as follows: $190,750 X 7.5% = $1,192.187500 per month. 12 months $1,192.187500 = $ 38.457661 per day. 31 days in May $38.457661 X 9 days (May 1-9) used by seller = $346.12 debit seller/credit buyer. The buyer can now make the June I payment, which will include interest for the entire month of May without penalty, having been "reimbursed" at closing for the 9 days for which the seller was responsible. The above daily rate is based on the actual number of calendar days in the month of closing, based on the outstanding principal balance after the last payment Note that this differs from the calculation for interest on the new loan shown in the first problem, Item 29. The per diem figure for that particular loan was derived



by dividing the annual interest by the actual number of days in the year. (On the state exam, it may appear either way.) In practice, the per diem rate is usually provided to the closer by the institutional lender. 8. Abstracting. In the previous example, a title insurance policy was provided by the seller and the purchaser obtained a mortgagee’s title insurance policy for the lender. In some rural areas, an abstract may be used as evidence of merchantable title. Unless the contract provides otherwise, the cost of the abstract before closing is a debit to the seller and a broker credit. Usually the abstract was furnished to the seller when he/she bought the property and the charge to the seller is only for continuing the abstract entries to date and certifying their accuracy. The lender usually will insist that further abstracting be done after the conveyance so that the purchaser's deed and the trust deeds will appear and be certified. Abstracting which occurs after the sale is debited to the purchaser (with the exception of expenses paid by the seller to deliver merchantable title at the closing) as the current owner of the property. Credit broker if paid by the closing entity, or on a new loan, the lender may pay it and deduct it from the amount of the loan. If so, it will appear on the lender's loan statement and may be transferred to the buyer's settlement sheet. 18. The Commission-approved contracts now provide for choice as to how the amount for general (property) taxes is to be prorated, and how it will be determined. (Forms approved between October 1975 and May 1989 based property tax prorations on the most recent mill levy and assessment. Forms approved between January 1994 and August 31, 1999 provided for tax prorations based on taxes for the calendar year immediately preceding closing). 19 & 24. Tax and Insurance Reserve Accounts. On home loans, most lending institutions today require that a sum equal to at least one month's taxes and insurance is to be paid with each monthly installment. This is to be placed in the mortgagor's trust account to insure that money will be available for payment of taxes and insurance when due. In a transaction where the existing loan is being assumed and there is a tax or insurance trust account, this amount is credited to the seller and debited to the buyer. All similar escrow reserve accounts are "sold" or charged to the purchaser at the closing. 20. Special Taxes. Special assessments, such as street paving, storm sewer, etc., if the were installed at the time of sale, even though not yet assessed, are generally paid by the seller under the terms of the approved contract forms, and are never prorated. The amount of such taxes may be obtained from the county treasurer's office if the improvements are already assessed. The reason for debiting the seller is that the buyer has contracted for clear title other than named exceptions. Special taxes are often amortized and paid in installments with the continuing ad valorem taxes, and therefore it is not unusual for the buyer to agree by contract to assume the balance of taxes due for special improvements. If the special assessments are assumed, only a memo notation should be made




of the amount assumed in the description column on this line, and no entry in either the debit or credit column. On a new loan, the lender may require that special taxes be paid by the seller at time of closing. See the first worksheet for settlement, Item 20, and Chapter 12 for information on the 2% income tax withholding on certain Colorado real estate sales. Note that the Colorado withholding should be 2% of the sales price or seller’s net proceeds – whichever is less. The reason it is “whichever is less” is because the seller may not have enough proceeds to satisfy that 2% requirement. That is the case here. Two percent would have been ($203,750 x .02 =) $4,075. However, after all the debits and credits (before the withholding tax is figured) the seller was only left with $976.14 proceeds. Since to charge seller $4,075 for the withholding would mean that seller would have to come to closing with over $3,000, the state will just take the balance of $976.14 (leaving the seller with nothing!) The state will come back later and charge the seller the remainder on the seller’s income taxes. 21. Personal Property Taxes. Personal property taxes will not be involved unless the property was used for business purposes or income producing purposes. If such personal property is included in the sale, these taxes are prorated as ad valorem property tax would be prorated. When title passes, the tax responsibility also passes from seller to buyer. Personal property tax situations are more frequently encountered in business opportunity transactions. Some counties will demand advance payment of these taxes for the current year and they will be prorated to date of closing. 25. FHA Mortgage Insurance Premium (MIP). This is the premium paid by the borrower to the lender to FHA to insure the lender against loss in the event the borrower defaults on the loan. In 1991, the Cranston-Gonzalez Act modified the premium collection system by requiring a monthly risk-based premium in addition to the up-front MIP. The risk- based premium is paid in arrears for a specified number of years based on the "loan-to-value" ratio. The closing entity should prorate both of these items unless the contract states otherwise. Debit seller and credit buyer for the monthly risk- based premium used. The calculation of the MIP refund for certain FHA mortgages being paid off, assumed or refinanced will require obtaining the original up-front MIP paid at the time of loan origination. This information may be found in a settlement statement, the original lender's loan documents or from the mortgagee servicing the loan. The broker must then determine the time period during which the insurance was in force. This period begins one month prior to the due date of the first payment on the loan and terminates at the end of the month in which the loan is paid off, refinanced, or assumed. Next, the broker would select the appropriate "refund factor" from the current FHA mortgage insurance refund table and multiply the




Bruce

Stamp


factor times the up-front MIP amount. The result is available for refund. Note that effective January 1, 2001, the rules for up-front FHA mortgage insurance premium refunds have changed. The Real Estate Commission recommends careful research on the broker's part at the time of listing FHA-insured property to obtain all data necessary to correctly prorate the MIP and to advise the buyer of the approximate amount of cash needed at closing. The broker may request further information on this subject and related matters from the U.S. Department of Housing and Urban Development, Rocky Mountain Office, Attn.: Administrative Services, 633 17th Street, Denver, CO 80202-3607 (Fax 303-672-5061). 26. FHA Mortgage Insurance Reserve. This item is involved when an FHA loan made prior to September 1, 1983 is being assumed. The reserve amount currently held by the lender is a debit to the buyer and a credit to the seller. On FHA loans made on or after September 1, 1983 this item is not involved as the entire mortgage insurance premium was paid at inception of the loan. 28. Loan Discount Fee. Although not used in this sample closing, discount points are charges made by a lender to increase the yield (over and above the interest received) on a loan. This fee is payable by anyone (but would normally be the buyer as a condition of loan approval.) This premium is expressed as a percentage of the total loan, e.g., 1% of $190,750. 31. Appraisal. The appraisal fee is charged to the party who agrees to pay it. In some instances the seller will ask you to order an appraisal before the property is sold to determine the fair market value and/or to receive a firm loan commitment. If such is the case, the broker should ascertain in advance and enter into a mutual agreement as to who shall pay the appraisal fee. If the broker has paid the appraisal fee and expects reimbursement from either buyer or seller, such provisions should be included in section 6 of the approved sales contract. 33. Rental Income. Adjustment should be made for any rent paid to the seller by a tenant in advance, and a prorated share for the rental period credited to the buyer and debited to the seller. Delinquent rents should not e prorated. 35. Loan Transfer Fee. This is a charge by the lender for changing the loan records from seller to buyer. Unless otherwise agreed between buyer and seller, this would be a debit buyer and credit broker. 36. Loan Payment Due. Any loan payment due or delinquent should be charged to the seller. This could change the interest and reserve account picture. In this case, the buyer will pay this amount outside of closing.



Many other complications may arise in the closing of a real estate transaction. Not all variations can be foreseen. When all parties are present at a closing, new contracts may evolve, there may be a necessity for escrow agreements, rental agreements may be necessary if occupancy is not given at the time of transfer of title.



PART III - CLOSING PROBLEMS CONTRACT / CLOSING PROBLEM #1-Assumption with 2nd carried back by seller

The contract you are reviewing is between Johnie Swan and Mabel Swan as sellers, and Robert R. Hopper and his wife Ruth C. Hopper as buyers. The property concerned is 5643 Marble Street, Denver, Colorado 80208. The legal description is Lot 8, Block 13, Summers subdivision, 2nd filing, City and County of Denver, State of Colorado. The sales price is $106,000.00. The purchasers have paid the amount of $5,000.00 down as earnest money. Today’s date is July 5th, and the contract states the date for delivery of the deed is to be July 15th of the current year. Among the documents you have is an assumption statement from the Friendly Mortgage Company that states the balance of the loan to be assumed is $54,184.25 after the July lst payment. The June payment was made by the sellers on time. The assumption statement contains the following figures:

Principal balance due $54,184.25 Monthly payments $ 675.00 Interest rate is 9% and is paid in arrears Insurance reserve $ 110.00 Assumption fee $ 50.00

Also, you have a tax certificate from the Treasurers office that states that last year’s taxes were $1,260.00 and they have been paid. The parties have agreed that the taxes for the current year will be pro-rated on that basis.

Also, you have learned that the owners title insurance premium will be $850.00, and the lenders title insurance policy is $150 each for the Assumption loan and the Seller Carry-Back loan. After contacting the buyers’ insurance agent, he agrees to furnish you forms to assign the sellers’ policy to the buyers so a new policy is not necessary. The policy is a one-year policy costing $196.00 a year and was issued February 1st of the current year. The water department has sent you a bill showing that the water was paid from May 1st to July 31st for $36.00. Other costs that you must deal with are the following recording fees:

Warranty Deed $ 5.00 2nd Deed of Trust $ 10.00 Tax Certificate $ 20.00 Documentary fee $ 10.60

The purchasers, according to the contract are paying for the property by assuming the present loan, giving back a 2nd Deed of Trust in the amount of $20,000.00 and paying cash for the balance. The 2nd will be amortized over a 10 year period at 10% interest. The Note will contain a Right to Cure clause and the 2nd Deed of Trust will have a creditworthiness clause. It will be a “balloon note”, where the monthly payments are $200 (and at maturity, the unpaid balance will be due), so you do not need to amortize the interest or figure out the payment.

Your mission is to draw up the Closing Statement, then the Promissory Note and Deed of Trust (both of which require using the Real Estate Commission Rule-F forms). Incidentally, both the listing contract and the contract of sale show that Listing Broker is to receive a 3.2% commission, and Buyer’s (Transaction) Broker receives 2.8%.





SELLER: SwansBUYER: Hoppers

CLOSING PROBLEM #1Contract Problem(Swan to Hopper)

5643 Marble St.CLOSING DATE: 7/15/201x

SELLER BUYER BROKER (Disbursemt) Item Description DEBIT CREDIT DEBIT CREDIT DEBIT (In) CREDIT (Out)

1 Selling Price . .2 Deposit . .3 Trust Deed - Assumption . . 4 Trust Deed - Seller carry-back . .5 6 Interest on Loan Assumed . . 7 Title Insurance Premiums . . .

11 Recording: Warranty Deed . .12 Trust Deed (2nd) . .15 Documentary Fee . .16 Cert. Of Taxes Due . .

17 Taxes - Preceding Yr - PAID18 Taxes for Current Year . .

(Total $1,260) $3.452 x 195 d

23 Hazard Ins Prem - Assumed . . 24 Hazard Ins Rsrv - Assumed . .

32 Water/Sewer . .

35 Loan Transfer Fee . .37 Broker fee-Awesome Rlty . .37 Broker fee-Douglas Rlty . ___________ ___________ ___________ ___________ .

SUBTOTALS . . . . . .DUE TO/FROM SELLER . .DUE TO/FROM BUYER ____________ ________________________. . ___________

TOTALS . . . . . .



NTD 82-10-06. (UCCC - NO DEFAULT RATE) PROMISSORY NOTE Page 1 of 2

The printed portions of this form, except differentiated additions, have been approved by the Colorado Real Estate Commission. 1 (NTD82-10-06) (Mandatory 1-07) 2 3 IF THIS FORM IS USED IN A CONSUMER CREDIT TRANSACTION, CONSULT LEGAL COUNSEL. 4 THIS IS A LEGAL INSTRUMENT. IF NOT UNDERSTOOD, LEGAL, TAX OR OTHER COUNSEL SHOULD BE CONSULTED 5 BEFORE SIGNING. 6

7 PROMISSORY NOTE 8

(UCCC - NO DEFAULT RATE) 9 10

U.S. $ ______________ _________________________, Colorado 11 12

Date: ____________________________ 13 14 15 1. FOR VALUE RECEIVED, the undersigned (Borrower) promise(s) to pay _______________________________________ 16 (Note Holder) or order, the principal sum of __________________________________________________________ Dollars, 17 with interest on the unpaid principal balance from ______________________, until paid, at the rate of ________ percent per 18 annum. Principal and interest shall be payable at _________________________________________________, or such other 19 place as Note Holder may designate, in _______ payments of ____________________________________________ Dollars 20 (U.S. $ _____________), due on the ____ day of each __________, beginning _______________________. Such payments 21 shall continue until the entire indebtedness evidenced by this Note is fully paid; provided, however, if not sooner paid, the 22 entire principal amount outstanding and accrued interest thereon, shall be due and payable on _______________________. 23

24 25 26 27

2. Borrower shall pay to Note Holder a late charge of ____ % of any payment not received by Note Holder within _____ 28 days after the payment is due. 29 30 3. Payments received for application to this Note shall be applied first to the payment of late charges, if any, second to the 31 payment of accrued interest specified above, and the balance applied in reduction of the principal amount hereof. 32 33 4. If any payment required by this Note is not paid when due, the entire principal amount outstanding and accrued interest 34 thereon shall become due and payable at the option of Note Holder (Acceleration) twenty days after notice of Acceleration has 35 been given. This time period shall run concurrently with the right to cure, if any, allowed by the Uniform Consumer Credit 36 Code. Such notice of Acceleration shall specify the amount of the nonpayment plus any unpaid late charges and other costs, 37 expenses and fees due under this Note. Until the expiration of said twenty-day period, Borrower may cure all defaults 38 consisting of a failure to make required payments by tendering the amounts of all unpaid sums due at the time of tender, 39 without Acceleration, as specified by Note Holder in such notice. Cure restores Borrower to Borrower’s rights under this Note 40 as though defaults had not occurred. Any defaults under this Note occurring within twelve months after Note Holder has once 41 given a notice of Acceleration, entitles Borrower to no right to cure, except as otherwise provided by law. Note Holder shall be 42 entitled to collect all reasonable costs and expense of collection and/or suit, including, but not limited to reasonable attorneys’ 43 fees. 44 45 5. Borrower may prepay the principal amount outstanding under this Note, in whole or in part, at any time without penalty. 46 Any partial prepayment shall be applied against the principal amount outstanding and shall not postpone the due date of any 47 subsequent payments or change the amount of such payments. 48 49 6. Borrower and all other makers, sureties, guarantors, and endorsers hereby waive presentment, notice of dishonor and 50 protest, and they hereby agree to any extensions of time of payment and partial payments before, at, or after maturity. This 51 Note shall be the joint and several obligation of Borrower and all other makers, sureties, guarantors and endorsers, and their 52 successors and assigns. 53 54 7. Any notice to Borrower provided for in this Note shall be in writing and shall be given and be effective upon (a) delivery to 55 Borrower or (b) by mailing such notice by first class U. S. mail, addressed to Borrower at Borrower’s address stated below, or 56 to such other address as Borrower may designate by notice to Note Holder. Any notice to Note Holder shall be in writing and 57 shall be given and be effective upon (a) delivery to Note Holder or (b) by mailing such notice by first class U.S. mail to Note 58




Holder at the address stated in the first paragraph of this Note, or to such other address as Note Holder may designate by notice 59 to Borrower. 60

61 8. The indebtedness evidenced by this Note is secured by a Deed of Trust dated _______________________________, and 62 until released said Deed of Trust contains additional rights of Note Holder. Such rights may cause Acceleration of the 63 indebtedness evidenced by this Note. Reference is made to said Deed of Trust for such additional terms. Said Deed of Trust 64 grants rights in the following legally described property located in the __________ County of ________________________, 65 State of Colorado: 66 67 68 69 known as No. ____________________________________________________________ (Property Address). 70

Street Address City State Zip 71 72 73

(CAUTION: SIGN ORIGINAL NOTE ONLY/RETAIN COPY) 74 75

IF BORROWER IS NATURAL PERSON(S): 76 77 ___________________________________ ___________________________________________________ 78 79 ___________________________________ doing business as ____________________________________ 80 81 IF BORROWER IS CORPORATION: 82 83 ATTEST: ___________________________________________________ 84 Name of Corporation 85 86 __________________________________ By _________________________________________________ 87 Secretary President 88 89 (SEAL) 90 91 IF BORROWER IS PARTNERSHIP: ____________________________________________________ 92 Name of Partnership 93 94 95 By_________________________________________________ 96 General Partner 97 98 Borrower's address: __________________________________________________________________________________ 99

100 __________________________________________________________________________________ 101

102 103 KEEP THIS NOTE IN A SAFE PLACE. THE ORIGINAL OF THIS NOTE MUST BE EXHIBITED TO THE 104 PUBLIC TRUSTEE IN ORDER TO RELEASE A DEED OF TRUST SECURING THIS NOTE. 105



TD72-8-10. DEED OF TRUST (Due on Transfer – Strict) Page 1 of 5

The printed portions of this form, except differentiated additions, have been approved by the Colorado Real Estate Commission. 1 (TD72-8-10) (Mandatory 1-11) 2

3 IF THIS FORM IS USED IN A CONSUMER CREDIT TRANSACTION, CONSULT LEGAL COUNSEL. 4

THIS IS A LEGAL INSTRUMENT. IF NOT UNDERSTOOD, LEGAL, TAX OR OTHER COUNSEL SHOULD BE CONSULTED 5 BEFORE SIGNING. 6 7

DEED OF TRUST 8 (Due on Transfer – Strict) 9

10 THIS DEED OF TRUST is made this day of , 20 , between 11 (Borrower), whose address is ; 12 and the Public Trustee of the County in which the Property (see § 1) is situated (Trustee); for the benefit of 13 (Lender), whose address is 14 . 15 16 Borrower and Lender covenant and agree as follows: 17 1. Property in Trust. Borrower, in consideration of the indebtedness herein recited and the trust herein created, hereby 18 grants and conveys to Trustee in trust, with power of sale, the following legally described property located in the 19 County of , State of Colorado: 20 21 22 23 known as No. (Property Address), 24 Street Address City State Zip 25 together with all its appurtenances (Property). 26 2. Note: Other Obligations Secured. This Deed of Trust is given to secure to Lender: 27 2.1. the repayment of the indebtedness evidenced by Borrower’s note (Note) dated in the 28 principal sum of Dollars (U.S. $ ), 29 with interest on the unpaid principal balance from until paid, at the rate of percent per 30 annum, with principal and interest payable at 31 or such other place as Lender may designate, in payments of 32 Dollars (U.S. $ ), due on the day of each beginning ; such 33 payments to continue until the entire indebtedness evidenced by said Note is fully paid; however, if not sooner paid, the entire 34 principal amount outstanding and accrued interest thereon shall be due and payable on ; and 35 Borrower is to pay to Lender a late charge of % of any payment not received by Lender within days after payment 36 is due; and Borrower has the right to prepay the principal amount outstanding under said Note, in whole or in part, at any time without 37 penalty except ; 38 2.2. the payment of all other sums, with interest thereon at % per annum, disbursed by Lender in accordance 39 with this Deed of Trust to protect the security of this Deed of Trust; and 40 2.3. the performance of the covenants and agreements of Borrower herein contained. 41 3. Title. Borrower covenants that Borrower owns and has the right to grant and convey the Property, and warrants title to 42 the same, subject to general real estate taxes for the current year, easements of record or in existence, and recorded declarations, 43 restrictions, reservations and covenants, if any, as of this date; and subject to . 44 4. Payment of Principal and Interest. Borrower shall promptly pay when due the principal of and interest on the 45 indebtedness evidenced by the Note, and late charges as provided in the Note and shall perform all of Borrower’s other covenants 46 contained in the Note. 47 5. Application of Payments. All payments received by Lender under the terms hereof shall be applied by Lender first in 48 payment of amounts due pursuant to § 23 (Escrow Funds for Taxes and Insurance), then to amounts disbursed by Lender pursuant 49 to § 9 (Protection of Lender’s Security), and the balance in accordance with the terms and conditions of the Note. 50 6. Prior Mortgages and Deeds of Trust; Charges; Liens. Borrower shall perform all of Borrower’s obligations under 51 any prior deed of trust and any other prior liens. Borrower shall pay all taxes, assessments and other charges, fines and impositions 52 attributable to the Property which may have or attain a priority over this Deed of Trust, and leasehold payments or ground rents, if 53 any, in the manner set out in § 23 (Escrow Funds for Taxes and Insurance) or, if not required to be paid in such manner, by 54 Borrower making payment when due, directly to the payee thereof. Despite the foregoing, Borrower shall not be required to make 55 payments otherwise required by this section if Borrower, after notice to Lender, shall in good faith contest such obligation by, or 56 defend enforcement of such obligation in, legal proceedings which operate to prevent the enforcement of the obligation or 57




forfeiture of the Property or any part thereof, only upon Borrower making all such contested payments and other payments as 58 ordered by the court to the registry of the court in which such proceedings are filed. 59 7. Property Insurance. Borrower shall keep the improvements now existing or hereafter erected on the Property insured 60 against loss by fire or hazards included within the term “extended coverage” in an amount at least equal to the lesser of (a) the 61 insurable value of the Property or (b) an amount sufficient to pay the sums secured by this Deed of Trust as well as any prior 62 encumbrances on the Property. All of the foregoing shall be known as “Property Insurance.” 63 The insurance carrier providing the insurance shall be qualified to write Property Insurance in Colorado and shall be chosen 64 by Borrower subject to Lender’s right to reject the chosen carrier for reasonable cause. All insurance policies and renewals thereof 65 shall include a standard mortgage clause in favor of Lender, and shall provide that the insurance carrier shall notify Lender at least 66 ten (10) days before cancellation, termination or any material change of coverage. Insurance policies shall be furnished to Lender 67 at or before closing. Lender shall have the right to hold the policies and renewals thereof. 68 In the event of loss, Borrower shall give prompt notice to the insurance carrier and Lender. Lender may make proof of loss if 69 not made promptly by Borrower. 70 Insurance proceeds shall be applied to restoration or repair of the Property damaged, provided said restoration or repair is 71 economically feasible and the security of this Deed of Trust is not thereby impaired. If such restoration or repair is not 72 economically feasible or if the security of this Deed of Trust would be impaired, the insurance proceeds shall be applied to the 73 sums secured by this Deed of Trust, with the excess, if any, paid to Borrower. If the Property is abandoned by Borrower, or if 74 Borrower fails to respond to Lender within 30 days from the date notice is given in accordance with § 16 (Notice) by Lender to 75 Borrower that the insurance carrier offers to settle a claim for insurance benefits, Lender is authorized to collect and apply the 76 insurance proceeds, at Lender’s option, either to restoration or repair of the Property or to the sums secured by this Deed of Trust. 77 Any such application of proceeds to principal shall not extend or postpone the due date of the installments referred to in §§ 4 78 (Payment of Principal and Interest) and 23 (Escrow Funds for Taxes and Insurance) or change the amount of such installments. 79 Notwithstanding anything herein to the contrary, if under § 18 (Acceleration; Foreclosure; Other Remedies) the Property is 80 acquired by Lender, all right, title and interest of Borrower in and to any insurance policies and in and to the proceeds thereof 81 resulting from damage to the Property prior to the sale or acquisition shall pass to Lender to the extent of the sums secured by this 82 Deed of Trust immediately prior to such sale or acquisition. 83 All of the rights of Borrower and Lender hereunder with respect to insurance carriers, insurance policies and insurance proceeds 84 are subject to the rights of any holder of a prior deed of trust with respect to said insurance carriers, policies and proceeds. 85 8. Preservation and Maintenance of Property. Borrower shall keep the Property in good repair and shall not commit 86 waste or permit impairment or deterioration of the Property and shall comply with the provisions of any lease if this Deed of Trust 87 is on a leasehold. Borrower shall perform all of Borrower’s obligations under any declarations, covenants, by-laws, rules, or other 88 documents governing the use, ownership or occupancy of the Property. 89 9. Protection of Lender’s Security. Except when Borrower has exercised Borrower’s rights under § 6 above, if 90 Borrower fails to perform the covenants and agreements contained in this Deed of Trust, or if a default occurs in a prior lien, or if 91 any action or proceeding is commenced which materially affects Lender’s interest in the Property, then Lender, at Lender’s option, 92 with notice to Borrower if required by law, may make such appearances, disburse such sums and take such action as is necessary 93 to protect Lender’s interest, including, but not limited to: 94 9.1. any general or special taxes or ditch or water assessments levied or accruing against the Property; 95 9.2. the premiums on any insurance necessary to protect any improvements comprising a part of the Property; 96 9.3. sums due on any prior lien or encumbrance on the Property; 97 9.4. if the Property is a leasehold or is subject to a lease, all sums due under such lease; 98 9.5. the reasonable costs and expenses of defending, protecting, and maintaining the Property and Lender’s interest in 99 the Property, including repair and maintenance costs and expenses, costs and expenses of protecting and securing the Property, 100 receiver’s fees and expenses, inspection fees, appraisal fees, court costs, attorney fees and costs, and fees and costs of an attorney 101 in the employment of Lender or holder of the certificate of purchase; 102 9.6. all other costs and expenses allowable by the evidence of debt or this Deed of Trust; and 103 9.7. such other costs and expenses which may be authorized by a court of competent jurisdiction. 104 Borrower hereby assigns to Lender any right Borrower may have by reason of any prior encumbrance on the Property or by 105 law or otherwise to cure any default under said prior encumbrance. 106 Any amounts disbursed by Lender pursuant to this § 9, with interest thereon, shall become additional indebtedness of Borrower 107 secured by this Deed of Trust. Such amounts shall be payable upon notice from Lender to Borrower requesting payment thereof, and 108 Lender may bring suit to collect any amounts so disbursed plus interest specified in § 2.2 (Note: Other Obligations Secured). Nothing 109 contained in this § 9 shall require Lender to incur any expense or take any action hereunder. 110 10. Inspection. Lender may make or cause to be made reasonable entries upon and inspection of the Property, provided 111 that Lender shall give Borrower notice prior to any such inspection specifying reasonable cause therefore related to Lender’s 112 interest in the Property. 113 11. Condemnation. The proceeds of any award or claim for damages, direct or consequential, in connection with any 114 condemnation or other taking of the Property, or part thereof, or for conveyance in lieu of condemnation, are hereby assigned and 115




shall be paid to Lender as herein provided. However, all of the rights of Borrower and Lender hereunder with respect to such 116 proceeds are subject to the rights of any holder of a prior deed of trust. 117 In the event of a total taking of the Property, the proceeds shall be applied to the sums secured by this Deed of Trust, with the 118 excess, if any, paid to Borrower. In the event of a partial taking of the Property, the proceeds remaining after taking out any part of 119 the award due any prior lien holder (net award) shall be divided between Lender and Borrower, in the same ratio as the amount of 120 the sums secured by this Deed of Trust immediately prior to the date of taking bears to Borrower’s equity in the Property 121 immediately prior to the date of taking. Borrower’s equity in the Property means the fair market value of the Property less the 122 amount of sums secured by both this Deed of Trust and all prior liens (except taxes) that are to receive any of the award, all at the 123 value immediately prior to the date of taking. 124 If the Property is abandoned by Borrower or if, after notice by Lender to Borrower that the condemnor offers to make an 125 award or settle a claim for damages, Borrower fails to respond to Lender within 30 days after the date such notice is given, Lender 126 is authorized to collect and apply the proceeds, at Lender’s option, either to restoration or repair of the Property or to the sums 127 secured by this Deed of Trust. 128 Any such application of proceeds to principal shall not extend or postpone the due date of the installments referred to in §§ 4 129 (Payment of Principal and Interest) and 23 (Escrow Funds for Taxes and Insurance) nor change the amount of such installments. 130 12. Borrower not Released. Extension of the time for payment or modification of amortization of the sums secured by this 131 Deed of Trust granted by Lender to any successor in interest of Borrower shall not operate to release, in any manner, the liability of 132 the original Borrower, nor Borrower’s successors in interest, from the original terms of this Deed of Trust. Lender shall not be 133 required to commence proceedings against such successor or refuse to extend time for payment or otherwise modify amortization of 134 the sums secured by this Deed of Trust by reason of any demand made by the original Borrower nor Borrower’s successors in interest. 135 13. Forbearance by Lender Not a Waiver. Any forbearance by Lender in exercising any right or remedy hereunder, or 136 otherwise afforded by law, shall not be a waiver or preclude the exercise of any such right or remedy. 137 14. Remedies Cumulative. Each remedy provided in the Note and this Deed of Trust is distinct from and cumulative to all 138 other rights or remedies under the Note and this Deed of Trust or afforded by law or equity, and may be exercised concurrently, 139 independently or successively. 140 15. Successors and Assigns Bound; Joint and Several Liability; Captions. The covenants and agreements herein 141 contained shall bind, and the rights hereunder shall inure to, the respective successors and assigns of Lender and Borrower, subject 142 to the provisions of § 24 (Transfer of the Property; Assumption). All covenants and agreements of Borrower shall be joint and 143 several. The captions and headings of the sections in this Deed of Trust are for convenience only and are not to be used to interpret 144 or define the provisions hereof. 145 16. Notice. Except for any notice required by law to be given in another manner, (a) any notice to Borrower provided for 146 in this Deed of Trust shall be in writing and shall be given and be effective upon (1) delivery to Borrower or (2) mailing such 147 notice by first class U.S. mail, addressed to Borrower at Borrower’s address stated herein or at such other address as Borrower may 148 designate by notice to Lender as provided herein, and (b) any notice to Lender shall be in writing and shall be given and be 149 effective upon (1) delivery to Lender or (2) mailing such notice by first class U.S. mail, to Lender’s address stated herein or to 150 such other address as Lender may designate by notice to Borrower as provided herein. Any notice provided for in this Deed of 151 Trust shall be deemed to have been given to Borrower or Lender when given in any manner designated herein. 152 17. Governing Law; Severability. The Note and this Deed of Trust shall be governed by the law of Colorado. In the 153 event that any provision or clause of this Deed of Trust or the Note conflicts with the law, such conflict shall not affect other 154 provisions of this Deed of Trust or the Note which can be given effect without the conflicting provision, and to this end the 155 provisions of the Deed of Trust and Note are declared to be severable. 156 18. Acceleration; Foreclosure; Other Remedies. Except as provided in § 24 (Transfer of the Property; Assumption), 157 upon Borrower’s breach of any covenant or agreement of Borrower in this Deed of Trust, or upon any default in a prior lien upon 158 the Property, (unless Borrower has exercised Borrower’s rights under § 6 above), at Lender’s option, all of the sums secured by 159 this Deed of Trust shall be immediately due and payable (Acceleration). To exercise this option, Lender may invoke the power of 160 sale and any other remedies permitted by law. Lender shall be entitled to collect all reasonable costs and expenses incurred in 161 pursuing the remedies provided in this Deed of Trust, including, but not limited to, reasonable attorney’s fees. 162 If Lender invokes the power of sale, Lender shall give written notice to Trustee of such election. Trustee shall give such notice 163 to Borrower of Borrower’s rights as is provided by law. Trustee shall record a copy of such notice and shall cause publication of 164 the legal notice as required by law in a legal newspaper of general circulation in each county in which the Property is situated, and 165 shall mail copies of such notice of sale to Borrower and other persons as prescribed by law. After the lapse of such time as may be 166 required by law, Trustee, without demand on Borrower, shall sell the Property at public auction to the highest bidder for cash at the 167 time and place (which may be on the Property or any part thereof as permitted by law) in one or more parcels as Trustee may think 168 best and in such order as Trustee may determine. Lender or Lender’s designee may purchase the Property at any sale. It shall not 169 be obligatory upon the purchaser at any such sale to see to the application of the purchase money. 170 Trustee shall apply the proceeds of the sale in the following order: (a) to all reasonable costs and expenses of the sale, 171 including, but not limited to, reasonable Trustee’s and attorney’s fees and costs of title evidence; (b) to all sums secured by this 172 Deed of Trust; and (c) the excess, if any, to the person or persons legally entitled thereto. 173




19. Borrower’s Right to Cure Default. Whenever foreclosure is commenced for nonpayment of any sums due hereunder, 174 the owners of the Property or parties liable hereon shall be entitled to cure said defaults by paying all delinquent principal and 175 interest payments due as of the date of cure, costs, expenses, late charges, attorney’s fees and other fees all in the manner provided 176 by law. Upon such payment, this Deed of Trust and the obligations secured hereby shall remain in full force and effect as though 177 no Acceleration had occurred, and the foreclosure proceedings shall be discontinued. 178 20. Assignment of Rents; Appointment of Receiver; Lender in Possession. As additional security hereunder, Borrower 179 hereby assigns to Lender the rents of the Property; however, Borrower shall, prior to Acceleration under § 18 (Acceleration; 180 Foreclosure; Other Remedies) or abandonment of the Property, have the right to collect and retain such rents as they become due 181 and payable. 182 Lender or the holder of the Trustee’s certificate of purchase shall be entitled to a receiver for the Property after Acceleration 183 under § 18 (Acceleration; Foreclosure; Other Remedies), and shall also be so entitled during the time covered by foreclosure 184 proceedings and the period of redemption, if any; and shall be entitled thereto as a matter of right without regard to the solvency or 185 insolvency of Borrower or of the then owner of the Property, and without regard to the value thereof. Such receiver may be appointed 186 by any Court of competent jurisdiction upon ex parte application and without notice; notice being hereby expressly waived. 187 Upon Acceleration under § 18 (Acceleration; Foreclosure; Other Remedies) or abandonment of the Property, Lender, in 188 person, by agent or by judicially-appointed receiver, shall be entitled to enter upon, take possession of and manage the Property 189 and to collect the rents of the Property including those past due. All rents collected by Lender or the receiver shall be applied, first 190 to payment of the costs of preservation and management of the Property, second to payments due upon prior liens, and then to the 191 sums secured by this Deed of Trust. Lender and the receiver shall be liable to account only for those rents actually received. 192 21. Release. Upon payment of all sums secured by this Deed of Trust, Lender shall cause Trustee to release this Deed of 193 Trust and shall produce for Trustee the Note. Borrower shall pay all costs of recordation and shall pay the statutory Trustee’s fees. 194 If Lender shall not produce the Note as aforesaid, then Lender, upon notice in accordance with § 16 (Notice) from Borrower to 195 Lender, shall obtain, at Lender’s expense, and file any lost instrument bond required by Trustee or pay the cost thereof to effect the 196 release of this Deed of Trust. 197 22. Waiver of Exemptions. Borrower hereby waives all right of homestead and any other exemption in the Property under 198 state or federal law presently existing or hereafter enacted. 199 23. Escrow Funds for Taxes and Insurance. This § 23 is not applicable if Funds, as defined below, are being paid pursuant 200 to a prior encumbrance. Subject to applicable law, Borrower shall pay to Lender, on each day installments of principal and interest are 201 payable under the Note, until the Note is paid in full, a sum (herein referred to as “Funds”) equal to of the 202 yearly taxes and assessments which may attain priority over this Deed of Trust, plus of yearly premium installments for 203 Property Insurance, all as reasonably estimated initially and from time to time by Lender on the basis of assessments and bills and 204 reasonable estimates thereof, taking into account any excess Funds not used or shortages. 205 The principal of the Funds shall be held in a separate account by Lender in trust for the benefit of Borrower and deposited in 206 an institution, the deposits or accounts of which are insured or guaranteed by a federal or state agency. Lender shall apply the 207 Funds to pay said taxes, assessments and insurance premiums. Lender may not charge for so holding and applying the Funds, 208 analyzing said account or verifying and compiling said assessments and bills. Lender shall not be required to pay Borrower any 209 interest or earnings on the Funds. Lender shall give to Borrower, without charge, an annual accounting of the Funds showing 210 credits and debits to the Funds and the purpose for which each debit to the Funds was made. The Funds are pledged as additional 211 security for the sums secured by this Deed of Trust. 212 If the amount of the Funds held by Lender shall not be sufficient to pay taxes, assessments and insurance premiums as they 213 fall due, Borrower shall pay to Lender any amount necessary to make up the deficiency within 30 days from the date notice is 214 given in accordance with § 16 (Notice) by Lender to Borrower requesting payment thereof. Provided however, if the loan secured 215 by this Deed of Trust is subject to RESPA or other laws regulating Escrow Accounts, such deficiency, surplus or any other 216 required adjustment shall be paid, credited or adjusted in compliance with such applicable laws. 217 Upon payment in full of all sums secured by this Deed of Trust, Lender shall simultaneously refund to Borrower any Funds held 218 by Lender. If under § 18 (Acceleration; Foreclosure; Other Remedies) the Property is sold or the Property is otherwise acquired by 219 Lender, Lender shall apply, no later than immediately prior to the sale of the Property or its acquisition by Lender, whichever occurs 220 first, any Funds held by Lender at the time of application as a credit against the sums secured by this Deed of Trust. 221 24. Transfer of the Property; Assumption. The following events shall be referred to herein as a “Transfer”: (i) a transfer 222 or conveyance of title (or any portion thereof, legal or equitable) of the Property (or any part thereof or interest therein); (ii) the 223 execution of a contract or agreement creating a right to title (or any portion thereof, legal or equitable) in the Property (or any part 224 thereof or interest therein); (iii) or an agreement granting a possessory right in the Property (or any portion thereof), in excess of 3 225 years; (iv) a sale or transfer of, or the execution of a contract or agreement creating a right to acquire or receive, more than fifty 226 percent (50%) of the controlling interest or more than fifty percent (50%) of the beneficial interest in Borrower and (v) the 227 reorganization, liquidation or dissolution of Borrower. Not to be included as a Transfer are (x) the creation of a lien or 228 encumbrance subordinate to this Deed of Trust; (y) the creation of a purchase money security interest for household appliances; or 229 (z) a transfer by devise, descent or by operation of the law upon the death of a joint tenant. At the election of Lender, in the event 230 of each and every Transfer: 231 24.1. All sums secured by this Deed of Trust shall become immediately due and payable (Acceleration). 232




24.2. If a Transfer occurs and should Lender not exercise Lender’s option pursuant to this § 24 to Accelerate, 233 Transferee shall be deemed to have assumed all of the obligations of Borrower under this Deed of Trust including all sums secured 234 hereby whether or not the instrument evidencing such conveyance, contract or grant expressly so provides. This covenant shall run 235 with the Property and remain in full force and effect until said sums are paid in full. Lender may without notice to Borrower deal 236 with Transferee in the same manner as with Borrower with reference to said sums including the payment or credit to Transferee of 237 undisbursed reserve Funds on payment in full of said sums, without in any way altering or discharging Borrower’s liability 238 hereunder for the obligations hereby secured. 239 24.3. Should Lender not elect to Accelerate upon the occurrence of such Transfer then, subject to § 24.2 above, the 240 mere fact of a lapse of time or the acceptance of payment subsequent to any of such events, whether or not Lender had actual or 241 constructive notice of such Transfer, shall not be deemed a waiver of Lender’s right to make such election nor shall Lender be 242 estopped therefrom by virtue thereof. The issuance on behalf of Lender of a routine statement showing the status of the loan, 243 whether or not Lender had actual or constructive notice of such Transfer, shall not be a waiver or estoppel of Lender’s said rights. 244 25. Borrower’s Copy. Borrower acknowledges receipt of a copy of the Note and this Deed of Trust. 245 246

EXECUTED BY BORROWER. 247

IF BORROWER IS NATURAL PERSON(s): doing business as IF BORROWER IS CORPORATION: ATTEST: Name of Corporation By Secretary President

(SEAL)

IF BORROWER IS PARTNERSHIP: Name of Partnership By A General Partner IF BORROWER IS LIMITED LIABILITY COMPANY: Name of Limited Liability Company By Its Authorized Representative

Title of Authorized Representative

STATE OF COLORADO COUNTY OF

The foregoing instrument was acknowledged before me this day of , 20 , by * . Witness my hand and official seal. My commission expires: Notary Public

*If a natural person or persons, insert the name(s) of such person(s). If a corporation, insert, for example, “John Doe as President and Jane Doe as 248 Secretary of Doe & Co., a Colorado corporation.” If a partnership, insert, for example, “Sam Smith as general partner in and for Smith & Smith, 249 a general partnership.” A Statement of Authority may be required if borrower is a limited liability company or other entity (§ 38-30-172, C.R.S.) 250



SELLER: SwansBUYER: Hoppers

CLOSING PROBLEM #1Contract Problem(Swan to Hopper)

5643 Marble St.CLOSING DATE: 7/15/201x

SELLER BUYER BROKER (Disbursemt) Item Description DEBIT CREDIT DEBIT CREDIT DEBIT (In) CREDIT (Out)

1 Selling Price 106,000.00 106,000.002 Deposit 5,000.00 5,000.003 Trust Deed - Assumption 54,184.25 54,184.25 4 Trust Deed - Seller carry-back 20,000.00 20,000.005 6 Interest on Loan Assumed 183.53 183.53 7 Title Insurance Premiums 850.00 300.00 1,150.00

11 Recording: Warranty Deed 5.00 5.0012 Trust Deed (2nd) 10.00 10.0015 Documentary Fee 10.60 10.6016 Cert. Of Taxes Due 20.00 20.00

17 Taxes - Preceding Yr - PAID18 Taxes for Current Year 673.14 673.14

(Total $1,260) $3.452 x 195 d

23 Hazard Ins Prem - Assumed 107.93 107.93 24 Hazard Ins Rsrv - Assumed 110.00 110.00

32 Water/Sewer 6.65 6.65

35 Loan Transfer Fee 50.00 50.0037 Broker fee-Awesome Rlty 3,392.00 3,392.0037 Broker fee-Douglas Rlty 2,968.00 ___________ ___________ ___________ ___________ 2,968.00

SUBTOTALS 82,250.92 106,224.58 106,620.18 80,040.92 5,000.00 7,605.60DUE TO/FROM SELLER 23,973.66 23,973.66DUE TO/FROM BUYER ____________ ________________________ 26,579.26 26,579.26 ___________

TOTALS 106,224.58 106,224.58 106,620.18 106,620.18 31,579.26 31,579.26











The printed portions of this form, except differentiated additions, have been approved by the Colorado Real Estate Commission. 1(NTD82-10-06) (Mandatory 1-07) 2

3IF THIS FORM IS USED IN A CONSUMER CREDIT TRANSACTION, CONSULT LEGAL COUNSEL.4THIS IS A LEGAL INSTRUMENT. IF NOT UNDERSTOOD, LEGAL, TAX OR OTHER COUNSEL SHOULD BE CONSULTED 5BEFORE SIGNING.6

7PROMISSORY NOTE8

(UCCC - NO DEFAULT RATE)910

U.S. $ ______________ _________________________, Colorado1112

Date: ____________________________131415

1. FOR VALUE RECEIVED, the undersigned (Borrower) promise(s) to pay _______________________________________ 16(Note Holder) or order, the principal sum of __________________________________________________________ Dollars, 17with interest on the unpaid principal balance from ______________________, until paid, at the rate of ________ percent per 18annum. Principal and interest shall be payable at _________________________________________________, or such other 19place as Note Holder may designate, in _______ payments of ____________________________________________ Dollars 20(U.S. $ _____________), due on the ____ day of each __________, beginning _______________________. Such payments 21shall continue until the entire indebtedness evidenced by this Note is fully paid; provided, however, if not sooner paid, the 22entire principal amount outstanding and accrued interest thereon, shall be due and payable on _______________________.23

24252627

2. Borrower shall pay to Note Holder a late charge of ____ % of any payment not received by Note Holder within _____ 28days after the payment is due. 29

303. Payments received for application to this Note shall be applied first to the payment of late charges, if any, second to the 31payment of accrued interest specified above, and the balance applied in reduction of the principal amount hereof.32

334. If any payment required by this Note is not paid when due, the entire principal amount outstanding and accrued interest 34thereon shall become due and payable at the option of Note Holder (Acceleration) twenty days after notice of Acceleration has 35been given. This time period shall run concurrently with the right to cure, if any, allowed by the Uniform Consumer Credit 36Code. Such notice of Acceleration shall specify the amount of the nonpayment plus any unpaid late charges and other costs, 37expenses and fees due under this Note. Until the expiration of said twenty-day period, Borrower may cure all defaults 38consisting of a failure to make required payments by tendering the amounts of all unpaid sums due at the time of tender, 39without Acceleration, as specified by Note Holder in such notice. Cure restores Borrower to Borrower’s rights under this Note 40as though defaults had not occurred. Any defaults under this Note occurring within twelve months after Note Holder has once 41given a notice of Acceleration, entitles Borrower to no right to cure, except as otherwise provided by law. Note Holder shall be 42entitled to collect all reasonable costs and expense of collection and/or suit, including, but not limited to reasonable attorneys’ 43fees. 44

455. Borrower may prepay the principal amount outstanding under this Note, in whole or in part, at any time without penalty. 46Any partial prepayment shall be applied against the principal amount outstanding and shall not postpone the due date of any 47subsequent payments or change the amount of such payments. 48

496. Borrower and all other makers, sureties, guarantors, and endorsers hereby waive presentment, notice of dishonor and 50protest, and they hereby agree to any extensions of time of payment and partial payments before, at, or after maturity. This 51Note shall be the joint and several obligation of Borrower and all other makers, sureties, guarantors and endorsers, and their 52successors and assigns. 53

547. Any notice to Borrower provided for in this Note shall be in writing and shall be given and be effective upon (a) delivery to 55Borrower or (b) by mailing such notice by first class U. S. mail, addressed to Borrower at Borrower’s address stated below, or 56to such other address as Borrower may designate by notice to Note Holder. Any notice to Note Holder shall be in writing and 57shall be given and be effective upon (a) delivery to Note Holder or (b) by mailing such notice by first class U.S. mail to Note 58

20,000.00 Denver

July 15, 201x

Johnie Swan and Mable SwanTwenty Thousand and NO/00 -----------------------------------------------------------------

July 15, 201x -10-1223 Vermont St. Denver CO 80210

120 Two Hundred and NO/00 ---------------------------------------------200.00 15th month August 15, 201x

July 15, 202x

10 5






Holder at the address stated in the first paragraph of this Note, or to such other address as Note Holder may designate by notice 59to Borrower. 60

618. The indebtedness evidenced by this Note is secured by a Deed of Trust dated _______________________________, and 62until released said Deed of Trust contains additional rights of Note Holder. Such rights may cause Acceleration of the 63indebtedness evidenced by this Note. Reference is made to said Deed of Trust for such additional terms. Said Deed of Trust 64grants rights in the following legally described property located in the __________ County of ________________________, 65State of Colorado:66

676869

known as No. ____________________________________________________________ (Property Address). 70Street Address City State Zip71

7273

(CAUTION: SIGN ORIGINAL NOTE ONLY/RETAIN COPY)7475

IF BORROWER IS NATURAL PERSON(S):7677

___________________________________ ___________________________________________________7879

___________________________________ doing business as ____________________________________8081

IF BORROWER IS CORPORATION:8283

ATTEST: ___________________________________________________84Name of Corporation85

86__________________________________ By _________________________________________________87Secretary President88

89(SEAL)90

91IF BORROWER IS PARTNERSHIP: ____________________________________________________92

Name of Partnership939495

By_________________________________________________96 General Partner97

98Borrower's address: __________________________________________________________________________________99

100__________________________________________________________________________________101

102103

KEEP THIS NOTE IN A SAFE PLACE. THE ORIGINAL OF THIS NOTE MUST BE EXHIBITED TO THE 104PUBLIC TRUSTEE IN ORDER TO RELEASE A DEED OF TRUST SECURING THIS NOTE.105

July 15, 201x

City and Denver

Lot 8, Block 13, Summers Subdivision, 2nd Filing, County of Denver, State of Colorado

5643 Marble St. Denver CO 80208

Robert R. Hopper

Ruth C. Hopper

Clear Form EmailForm









15th July 1x Robert R. Hopperand Ruth C. Hopper 5643 Marble St., Denver CO 80208

Johnie Swan and Mable Swan

1223 Vermont St., Denver CO 80210

Denver

5643 Marble St. Denver CO 80208

July 15, 201x

Twenty Thousand and NO/00 -------------------------------------------------------------------------------------- 20,000.00

July 15,201x 10

1223 Vermont St., Denver CO 80210

120 Two Hundred and NO/00 --------------------------------------------------------------

200.00 15th month August 15, 201x

July 15, 202x10 5

None ----------------------------------------------------------10

None

Lot 8, Block 13, Summers Subdivision, 2nd Filing



www.macrealestate.com/COLORADOQ&A.htm#22.06.09



n/a

n/a







(SEAL)






City and Denver

15th July , by * . Witness my hand and official seal. My commission expires: Notary Public 248 *If a natural person or persons, insert the name(s) of such person(s). If a corporation, insert, for example, “John Doe as President and Jane Doe as 249 Secretary of Doe & Co., a Colorado corporation.” If a partnership, insert, for example, “Sam Smith as general partner in and for Smith & Smith, 250 a general partnership.” A Statement of Authority may be required if borrower is a limited liability company or other entity (§ 38-30-172, C.R.S.) City and Denver 15th July 1x

Robert R. Hopper and Ruth C. Hopper

9 January 201x



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CLOSING PROBLEM #2 - New Loan (Including Settlement Statements and other “real-life” closing documents to use as examples.)

STEP 1. Review Contract and amendments. Compare to title commitment. STEP 2. Fill out 6-column worksheet STEP 3. Read Commitment (Schedule B-1) for requirements (i.e., payoffs) STEP 4. Read loan closing instructions; Determine type of loan for closing fee and VA or FHA allowable charges; Also, review any additional endorsement charges, changes in proposed insured clause and loan amount; Finally, look for any special instructions such as Quit Claim Deed or Power of Attorney docs. STEP 5. Fill in 6-column worksheet. Suggested order: 1. Sales Price 2. Payoff(s) – Payee(s) and amount(s) 3. Earnest Money Deposit 4. Taxes (Preceding amt. Due, and current year’s proration) 5. Water/Sewer (Amt. Due, and current month’s proration) 6. Homeowners Association dues 7. Commissions 8. Closing fees (both Real Estate and Loan closing fees) 9. Title Commitment charges a. Owner’s premium (charge to seller) b. Lender’s premium (charge to buyer) c. Lender endorsements (charge to buyer) 10. Recording fees a. Record Warranty Deed (charge to buyer) b. Record Trust Deed (charge to buyer) c. Documentary Fee (charge to buyer) d. Misc. (i.e., POA or Quit Claim Deed) 11. Misc. sales fees 12. Loan figures 13. Total each column and balance FIGURES FOR WORKSHEET Problem #2 – “Romeo Sellers to Juliet Byers”

(Note: This is not a “Contract Problem” as in Chapter 21. The contract provided here is only an example. Some provisions are omitted so you can focus on the closing figures.)

- Taxes Paid for last year’s taxes - $1,041.56 - Record a 1-page Warranty Deed - $5.00 - Record a 5-page Trust Deed - $25.00 - Release of Trust Deed - $13.00 - Documentary Fee – 1 cent per $100 of Sales Price - Broker Commissions – 2.8% each to Awesome Realty and Douglas Realty - Closing fee to Title Company - $120 total (split evenly between the parties) NOTE: The loan company will “net out” all their fees (i.e., Origination fee, Tax and Insurance escrows, etc.,) from the amount they send to the title company. Therefore, the “IN”-column (buyer Credit) will be less by the total of those fees.



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CBS1-6-15. CONTRACT TO BUY AND SELL REAL ESTATE (RESIDENTIAL) Page 1 of 17

The printed portions of this form, except differentiated additions, have been approved by the Colorado Real Estate Commission. 1

(CBS1-6-15) (Mandatory 1-16) 2

THIS FORM HAS IMPORTANT LEGAL CONSEQUENCES AND THE PARTIES SHOULD CONSULT LEGAL AND TAX OR 3

OTHER COUNSEL BEFORE SIGNING. 4

5

CONTRACT TO BUY AND SELL REAL ESTATE 6

(RESIDENTIAL) 7

8

Date: 9

AGREEMENT 10

1. AGREEMENT. Buyer agrees to buy and Seller agrees to sell, the Property described below on the terms and conditions set 11

forth in this contract (Contract). 12

2. PARTIES AND PROPERTY. 13

2.1. Buyer. Buyer, , 14

will take title to the Property described below as Joint Tenants Tenants In Common Other . 15

2.2. No Assignability. This Contract Is Not assignable by Buyer unless otherwise specified in Additional Provisions. 16

17

2.3. Seller. Seller, , is 18

the current owner of the Property described below. 19

2.4. Property. The Property is the following legally described real estate in the County of , Colorado: 20

21

22

23

24

25

known as No. , 26

Street Address City State Zip 27

together with the interests, easements, rights, benefits, improvements and attached fixtures appurtenant thereto, and all interest of 28

Seller in vacated streets and alleys adjacent thereto, except as herein excluded (Property). 29

30

2.5. Inclusions. The Purchase Price includes the following items (Inclusions): 31

2.5.1. Inclusions - Attached. The following items are included unless excluded under Exclusions: lighting, 32

heating, plumbing, ventilating and air conditioning units, TV antennas, inside telephone, network and coaxial (cable) wiring and 33

connecting blocks/jacks, plants, mirrors, floor coverings, intercom systems, built-in kitchen appliances, sprinkler systems and 34

controls, built-in vacuum systems (including accessories), garage door openers (including _______ remote controls). If checked, 35

the following are owned by the Seller and included (leased items should be listed under Due Diligence Documents): None 36

Solar Panels Water Softeners Security Systems Satellite Systems (including satellite dishes). If any additional 37

items are attached to the Property after the date of this Contract, such additional items are also included in the Purchase Price. 38

2.5.2. Inclusions – Not Attached. If on the Property, whether attached or not, on the date of this Contract, the 39

following items are included unless excluded under Exclusions: storm windows, storm doors, window and porch shades, awnings, 40

blinds, screens, window coverings and treatments, curtain rods, drapery rods, fireplace inserts, fireplace screens, fireplace grates, 41

heating stoves, storage sheds, carbon monoxide alarms, smoke/fire detectors and all keys. 42

2.5.3. Personal Property - Conveyance. Any personal property must be conveyed at Closing by Seller free and 43

clear of all taxes (except personal property taxes for the year of Closing), liens and encumbrances, except . 44

Conveyance of all personal property will be by bill of sale or other applicable legal instrument. 45

2.5.4. Other Inclusions. The following items, whether fixtures or personal property, are also included in the 46

Purchase Price: 47

48

49

50

51

52

2.5.5. Parking and Storage Facilities. Use Only Ownership of the following parking facilities: 53

2/19/201x

Juliet Byers

Tenants in Severalty

Romeo Sellers

Denver

n/a

n/a

Lots 1, 2, and the North 1/2 of Lot 3, Block 28, Richard Sub., 3rd Fil.

1234 Midsummer St. Denver CO 80200

✔

n/a



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Not for Use Before 1-1-16

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; and Use Only Ownership of the following storage facilities: . 54

2.6. Exclusions. The following items are excluded (Exclusions): 55

56

57

58

2.7. Water Rights, Well Rights, Water and Sewer Taps. 59

2.7.1. Deeded Water Rights. The following legally described water rights: 60

61

62

63

Any deeded water rights will be conveyed by a good and sufficient deed at Closing. 64

2.7.2. Other Rights Relating to Water. The following rights relating to water not included in §§ 2.7.1, 2.7.3, 65

2.7.4 and 2.7.5, will be transferred to Buyer at Closing: 66

67

68

69

2.7.3. Well Rights. Seller agrees to supply required information to Buyer about the well. Buyer understands that 70

if the well to be transferred is a “Small Capacity Well” or a “Domestic Exempt Water Well,” used for ordinary household 71

purposes, Buyer must, prior to or at Closing, complete a Change in Ownership form for the well. If an existing well has not been 72

registered with the Colorado Division of Water Resources in the Department of Natural Resources (Division), Buyer must 73

complete a registration of existing well form for the well and pay the cost of registration. If no person will be providing a closing 74

service in connection with the transaction, Buyer must file the form with the Division within sixty days after Closing. The Well 75

Permit # is . 76

2.7.4. Water Stock Certificates. The water stock certificates to be transferred at Closing are as follows: 77

78

79

80

2.7.5. Conveyance. If Buyer is to receive any rights to water pursuant to § 2.7.2 (Other Rights Relating to Water), 81

§ 2.7.3 (Well Rights), or § 2.7.4 (Water Stock Certificates), Seller agrees to convey such rights to Buyer by executing the 82

applicable legal instrument at Closing. 83

3. DATES AND DEADLINES. 84

Item No. Reference Event Date or Deadline

1 § 4.3 Alternative Earnest Money Deadline

Title

2 § 8.1 Record Title Deadline

3 § 8.2 Record Title Objection Deadline

4 § 8.3 Off-Record Title Deadline

5 § 8.3 Off-Record Title Objection Deadline

6 § 8.4 Title Resolution Deadline

7 § 8.6 Right of First Refusal Deadline

Owners’ Association

8 § 7.3 Association Documents Deadline

9 § 7.4 Association Documents Objection Deadline

Seller’s Property Disclosure

10 § 10.1 Seller’s Property Disclosure Deadline

Loan and Credit

11 § 5.1 Loan Application Deadline

12 § 5.2 Loan Objection Deadline

13 § 5.3 Buyer’s Credit Information Deadline

14 § 5.3 Disapproval of Buyer’s Credit Information Deadline

15 § 5.4 Existing Loan Documents Deadline

16 § 5.4 Existing Loan Documents Objection Deadline

17 § 5.4 Loan Transfer Approval Deadline

18 § 4.7 Seller or Private Financing Deadline

n/an/a

3/29/201x

3/15/201x

4/15/201x

5/01/201x

3/31/201x

3/15/201x

3/31/201x

4/15/201x

n/a




Appraisal

19 § 6.2 Appraisal Deadline

20 § 6.2 Appraisal Objection Deadline

21 § 6.2 Appraisal Resolution Deadline

Survey

22 § 9.1 New ILC or New Survey Deadline

23 § 9.3 New ILC or New Survey Objection Deadline

24 § 9.4 New ILC or New Survey Resolution Deadline

Inspection and Due Diligence

25 § 10.3 Inspection Objection Deadline

26 § 10.3 Inspection Resolution Deadline

27 § 10.5 Property Insurance Objection Deadline

28 § 10.6 Due Diligence Documents Delivery Deadline

29 § 10.6 Due Diligence Documents Objection Deadline

30 § 10.6 Due Diligence Documents Resolution Deadline

31 § 10.7 Conditional Sale Deadline

Closing and Possession

32 § 12.3 Closing Date

33 § 17 Possession Date

34 § 17 Possession Time

35 § 28 Acceptance Deadline Date

36 § 28 Acceptance Deadline Time

Note: If FHA or VA loan boxes are checked in § 4.5.3 (Loan Limitations), the Appraisal deadlines do Not apply to FHA insured 85

or VA guaranteed loans. 86

3.1. Applicability of Terms. Any box checked in this Contract means the corresponding provision applies. Any box, 87

blank or line in this Contract left blank or completed with the abbreviation “N/A”, or the word “Deleted” means such provision, 88

including any deadline, is not applicable and the corresponding provision of this Contract to which reference is made is deleted. If 89

no box is checked in a provision that contains a selection of “None”, such provision means that “None” applies. 90

The abbreviation “MEC” (mutual execution of this Contract) means the date upon which both parties have signed this Contract. 91

92

4. PURCHASE PRICE AND TERMS. 93

4.1. Price and Terms. The Purchase Price set forth below is payable in U.S. Dollars by Buyer as follows: 94

Item No. Reference Item Amount Amount

1 § 4.1 Purchase Price $

2 § 4.3 Earnest Money $

3 § 4.5 New Loan $

4 § 4.6 Assumption Balance $

5 § 4.7 Private Financing $

6 § 4.7 Seller Financing $

7

8

9 § 4.4 Cash at Closing $

10 TOTAL $ $

4.2. Seller Concession. At Closing, Seller will credit to Buyer $______________ (Seller Concession). The Seller 95

Concession may be used for any Buyer fee, cost, charge or expenditure to the extent the amount is allowed by the Buyer’s lender 96

and is included in the Closing Statement or Closing Disclosure, at Closing. Examples of allowable items to be paid for by the 97

Seller Concession include, but are not limited to: Buyer’s closing costs, loan discount points, loan origination fees, prepaid items 98

and any other fee, cost, charge, expense or expenditure. Seller Concession is in addition to any sum Seller has agreed to pay or 99

credit Buyer elsewhere in this Contract. 100

4.3. Earnest Money. The Earnest Money set forth in this section, in the form of a ______________________, will be 101

payable to and held by ________________________________________ (Earnest Money Holder), in its trust account, on behalf of 102

both Seller and Buyer. The Earnest Money deposit must be tendered, by Buyer, with this Contract unless the parties mutually 103

agree to an Alternative Earnest Money Deadline for its payment. The parties authorize delivery of the Earnest Money deposit to 104

3/15/201x

4/14/201x

4/30/201x

5/15/201x

5/15/201x

5:00 pm

3/2/201x

6:00 pm

126,600.00

119,700.00

2,000.00

4,300.00

126,600.00 126,600.00

n/a

cash

Seller's Agent




the company conducting the Closing (Closing Company), if any, at or before Closing. In the event Earnest Money Holder has 105

agreed to have interest on Earnest Money deposits transferred to a fund established for the purpose of providing affordable housing 106

to Colorado residents, Seller and Buyer acknowledge and agree that any interest accruing on the Earnest Money deposited with the 107

Earnest Money Holder in this transaction will be transferred to such fund. 108

4.3.1. Alternative Earnest Money Deadline. The deadline for delivering the Earnest Money, if other than at the 109

time of tender of this Contract, is as set forth as the Alternative Earnest Money Deadline. 110

4.3.2. Return of Earnest Money. If Buyer has a Right to Terminate and timely terminates, Buyer is entitled to 111

the return of Earnest Money as provided in this Contract. If this Contract is terminated as set forth in § 25 and, except as provided 112

in § 24, if the Earnest Money has not already been returned following receipt of a Notice to Terminate, Seller agrees to execute 113

and return to Buyer or Broker working with Buyer, written mutual instructions (e.g., Earnest Money Release form), within three 114

days of Seller’s receipt of such form. 115

4.4. Form of Funds; Time of Payment; Available Funds. 116

4.4.1. Good Funds. All amounts payable by the parties at Closing, including any loan proceeds, Cash at Closing 117

and closing costs, must be in funds that comply with all applicable Colorado laws, including electronic transfer funds, certified 118

check, savings and loan teller’s check and cashier’s check (Good Funds). 119

4.4.2. Time of Payment; Available Funds. All funds, including the Purchase Price to be paid by Buyer, must be 120

paid before or at Closing or as otherwise agreed in writing between the parties to allow disbursement by Closing Company at 121

Closing OR SUCH NONPAYING PARTY WILL BE IN DEFAULT. Buyer represents that Buyer, as of the date of this 122

Contract, Does Does Not have funds that are immediately verifiable and available in an amount not less than the amount 123

stated as Cash at Closing in § 4.1. 124

4.5. New Loan. 125

4.5.1. Buyer to Pay Loan Costs. Buyer, except as provided in § 4.2, if applicable, must timely pay Buyer’s loan 126

costs, loan discount points, prepaid items and loan origination fees, as required by lender. 127

4.5.2. Buyer May Select Financing. Buyer may pay in cash or select financing appropriate and acceptable to 128

Buyer, including a different loan than initially sought, except as restricted in § 4.5.3 or § 30 (Additional Provisions). 129

4.5.3. Loan Limitations. Buyer may purchase the Property using any of the following types of loans: 130

Conventional FHA VA Bond Other . 131

4.5.4. Good Faith Estimate – Monthly Payment and Loan Costs. Buyer is advised to review the terms, conditions 132

and costs of Buyer’s New Loan carefully. If Buyer is applying for a residential loan, the lender generally must provide Buyer with 133

a good faith estimate of Buyer’s closing costs within three days after Buyer completes a loan application. Buyer also should obtain 134

an estimate of the amount of Buyer’s monthly mortgage payment. 135

4.6. Assumption. Buyer agrees to assume and pay an existing loan in the approximate amount of the Assumption 136

Balance set forth in § 4.1, presently payable at $______________ per ________________ including principal and interest 137

presently at the rate of ________% per annum, and also including escrow for the following as indicated: Real Estate Taxes 138

Property Insurance Premium Mortgage Insurance Premium and . 139

Buyer agrees to pay a loan transfer fee not to exceed $_____________. At the time of assumption, the new interest rate will 140

not exceed ________% per annum and the new payment will not exceed $_____________ per ________________ principal and 141

interest, plus escrow, if any. If the actual principal balance of the existing loan at Closing is less than the Assumption Balance, 142

which causes the amount of cash required from Buyer at Closing to be increased by more than $_____________, then Buyer has 143

the Right to Terminate under § 25.1, on or before Closing Date, based on the reduced amount of the actual principal balance. 144

Seller Will Will Not be released from liability on said loan. If applicable, compliance with the requirements for 145

release from liability will be evidenced by delivery on or before Loan Transfer Approval Deadline at Closing of an 146

appropriate letter of commitment from lender. Any cost payable for release of liability will be paid by 147

in an amount not to exceed $_____________. 148

4.7. Seller or Private Financing. 149

WARNING: Unless the transaction is exempt, federal and state laws impose licensing, other requirements and restrictions on 150

sellers and private financiers. Contract provisions on financing and financing documents, unless exempt, should be prepared by a 151

licensed Colorado attorney or licensed mortgage loan originator. Brokers should not prepare or advise the parties on the specifics 152

of financing, including whether or not a party is exempt from the law. 153

4.7.1. Seller Financing. If Buyer is to pay all or any portion of the Purchase Price with Seller financing, 154

Buyer Seller will deliver the proposed Seller financing documents to the other party on or before _________ days before 155

Seller or Private Financing Deadline. 156

4.7.1.1. Seller May Terminate. If Seller is to provide Seller financing, this Contract is conditional upon 157

Seller determining whether such financing is satisfactory to the Seller, including its payments, interest rate, terms, conditions, cost 158

and compliance with the law. Seller has the Right to Terminate under § 25.1, on or before Seller or Private Financing Deadline, 159

if such Seller financing is not satisfactory to the Seller, in Seller’s sole subjective discretion. 160

4.7.2. Buyer May Terminate. If Buyer is to pay all or any portion of the Purchase Price with Seller or private 161

financing, this Contract is conditional upon Buyer determining whether such financing is satisfactory to the Buyer, including its 162

availability, payments, interest rate, terms, conditions and cost. Buyer has the Right to Terminate under § 25.1, on or before Seller 163

✔

✔ ✔ ✔ ✔



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or Private Financing Deadline, if such Seller or private financing is not satisfactory to Buyer, in Buyer’s sole subjective 164

discretion. 165

TRANSACTION PROVISIONS 166

5. FINANCING CONDITIONS AND OBLIGATIONS. 167

5.1. Loan Application. If Buyer is to pay all or part of the Purchase Price by obtaining one or more new loans (New 168

Loan), or if an existing loan is not to be released at Closing, Buyer, if required by such lender, must make an application verifiable 169

by such lender, on or before Loan Application Deadline and exercise reasonable efforts to obtain such loan or approval. 170

5.2. Loan Objection. If Buyer is to pay all or part of the Purchase Price with a New Loan, this Contract is conditional 171

upon Buyer determining, in Buyer’s sole subjective discretion, whether the New Loan is satisfactory to Buyer, including its 172

availability, payments, interest rate, terms, conditions, and cost of such New Loan. This condition is for the sole benefit of Buyer. 173

Buyer has the Right to Terminate under § 25.1, on or before Loan Objection Deadline, if the New Loan is not satisfactory to 174

Buyer, in Buyer’s sole subjective discretion. IF SELLER IS NOT IN DEFAULT AND DOES NOT TIMELY RECEIVE 175

BUYER’S WRITTEN NOTICE TO TERMINATE, BUYER’S EARNEST MONEY WILL BE NONREFUNDABLE, except 176

as otherwise provided in this Contract (e.g., Appraisal, Title, Survey). 177

5.3. Credit Information. If an existing loan is not to be released at Closing, this Contract is conditional (for the sole 178

benefit of Seller) upon Seller’s approval of Buyer’s financial ability and creditworthiness, which approval will be at Seller’s sole 179

subjective discretion. Accordingly: (1) Buyer must supply to Seller by Buyer’s Credit Information Deadline, at Buyer’s 180

expense, information and documents (including a current credit report) concerning Buyer’s financial, employment and credit 181

condition; (2) Buyer consents that Seller may verify Buyer’s financial ability and creditworthiness; and (3) any such information 182

and documents received by Seller must be held by Seller in confidence, and not released to others except to protect Seller’s interest 183

in this transaction. If the Cash at Closing is less than as set forth in § 4.1 of this Contract, Seller has the Right to Terminate under 184

§ 25.1, on or before Closing. If Seller disapproves of Buyer’s financial ability or creditworthiness, in Seller’s sole subjective 185

discretion, Seller has the Right to Terminate under § 25.1, on or before Disapproval of Buyer’s Credit Information Deadline. 186

5.4. Existing Loan Review. If an existing loan is not to be released at Closing, Seller must deliver copies of the loan 187

documents (including note, deed of trust, and any modifications) to Buyer by Existing Loan Documents Deadline. For the sole 188

benefit of Buyer, this Contract is conditional upon Buyer’s review and approval of the provisions of such loan documents. Buyer 189

has the Right to Terminate under § 25.1, on or before Existing Loan Documents Objection Deadline, based on any 190

unsatisfactory provision of such loan documents, in Buyer’s sole subjective discretion. If the lender’s approval of a transfer of the 191

Property is required, this Contract is conditional upon Buyer’s obtaining such approval without change in the terms of such loan, 192

except as set forth in § 4.6. If lender’s approval is not obtained by Loan Transfer Approval Deadline, this Contract will 193

terminate on such deadline. Seller has the Right to Terminate under § 25.1, on or before Closing, in Seller’s sole subjective 194

discretion, if Seller is to be released from liability under such existing loan and Buyer does not obtain such compliance as set forth 195

in § 4.6. 196

6. APPRAISAL PROVISIONS. 197

6.1. Appraisal Definition. An “Appraisal” is an opinion of value prepared by a licensed or certified appraiser, engaged 198

on behalf of Buyer or Buyer’s lender, to determine the Property’s market value (Appraised Value). The Appraisal may also set 199

forth certain lender requirements, replacements, removals or repairs necessary on or to the Property as a condition for the Property 200

to be valued at the Appraised Value. 201

6.2. Appraisal Condition. The applicable appraisal provision set forth below applies to the respective loan type set forth 202

in § 4.5.3, or if a cash transaction (i.e. no financing), § 6.2.1 applies. 203

6.2.1. Conventional/Other. Buyer has the right to obtain an Appraisal. If the Appraised Value is less than the 204

Purchase Price, or if the Appraisal is not received by Buyer on or before Appraisal Deadline Buyer may, on or before Appraisal 205

Objection Deadline, notwithstanding § 8.3 or § 13: 206

6.2.1.1. Notice to Terminate. Notify Seller in writing that this Contract is terminated; or 207

6.2.1.2. Appraisal Objection. Deliver to Seller a written objection accompanied by either a copy of the 208

Appraisal or written notice from lender that confirms the Appraisal Value is less than the Purchase Price. 209

6.2.1.3. Appraisal Resolution. If an Appraisal Objection is received by Seller, on or before Appraisal 210

Objection Deadline, and if Buyer and Seller have not agreed in writing to a settlement thereof on or before Appraisal Resolution 211

Deadline (§ 3), this Contract will terminate on the Appraisal Resolution Deadline, unless Seller receives Buyer’s written 212

withdrawal of the Appraisal Objection before such termination, i.e., on or before expiration of Appraisal Resolution Deadline. 213

6.2.2. FHA. It is expressly agreed that, notwithstanding any other provisions of this Contract, the purchaser 214

(Buyer) shall not be obligated to complete the purchase of the Property described herein or to incur any penalty by forfeiture of 215

Earnest Money deposits or otherwise unless the purchaser (Buyer) has been given, in accordance with HUD/FHA or VA 216

requirements, a written statement issued by the Federal Housing Commissioner, Department of Veterans Affairs, or a Direct 217

Endorsement lender, setting forth the appraised value of the Property of not less than $______________. The purchaser (Buyer) 218

shall have the privilege and option of proceeding with the consummation of this Contract without regard to the amount of the 219

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appraised valuation. The appraised valuation is arrived at to determine the maximum mortgage the Department of Housing and 220

Urban Development will insure. HUD does not warrant the value nor the condition of the Property. The purchaser (Buyer) should 221

satisfy himself/herself that the price and condition of the Property are acceptable. 222

6.2.3. VA. It is expressly agreed that, notwithstanding any other provisions of this Contract, the purchaser (Buyer) 223

shall not incur any penalty by forfeiture of Earnest Money or otherwise or be obligated to complete the purchase of the Property 224

described herein, if the Contract Purchase Price or cost exceeds the reasonable value of the Property established by the Department 225

of Veterans Affairs. The purchaser (Buyer) shall, however, have the privilege and option of proceeding with the consummation of 226

this Contract without regard to the amount of the reasonable value established by the Department of Veterans Affairs. 227

6.3. Lender Property Requirements. If the lender imposes any requirements, replacements, removals or repairs, 228

including any specified in the Appraisal (Lender Requirements) to be made to the Property (e.g., roof repair, repainting), beyond 229

those matters already agreed to by Seller in this Contract, Seller has the Right to Terminate under § 25.1, (notwithstanding § 10 of 230

this Contract), on or before three days following Seller’s receipt of the Lender Requirements, in Seller’s sole subjective discretion. 231

Seller’s Right to Terminate in this § 6.3 does not apply if, on or before any termination by Seller pursuant to this § 6.3: (1) the 232

parties enter into a written agreement regarding the Lender Requirements; or (2) the Lender Requirements have been completed; or 233

(3) the satisfaction of the Lender Requirements is waived in writing by Buyer. 234

6.4. Cost of Appraisal. Cost of the Appraisal to be obtained after the date of this Contract must be timely paid by 235

Buyer Seller. The cost of the Appraisal may include any and all fees paid to the appraiser, appraisal management company, 236

lender's agent or all three. 237

238

7. OWNERS’ ASSOCIATION. This Section is applicable if the Property is located within a Common Interest 239

Community and subject to such declaration. 240

7.1. Common Interest Community Disclosure. THE PROPERTY IS LOCATED WITHIN A COMMON 241

INTEREST COMMUNITY AND IS SUBJECT TO THE DECLARATION FOR THE COMMUNITY. THE OWNER OF 242

THE PROPERTY WILL BE REQUIRED TO BE A MEMBER OF THE OWNERS’ ASSOCIATION FOR THE 243

COMMUNITY AND WILL BE SUBJECT TO THE BYLAWS AND RULES AND REGULATIONS OF THE 244

ASSOCIATION. THE DECLARATION, BYLAWS, AND RULES AND REGULATIONS WILL IMPOSE FINANCIAL 245

OBLIGATIONS UPON THE OWNER OF THE PROPERTY, INCLUDING AN OBLIGATION TO PAY 246

ASSESSMENTS OF THE ASSOCIATION. IF THE OWNER DOES NOT PAY THESE ASSESSMENTS, THE 247

ASSOCIATION COULD PLACE A LIEN ON THE PROPERTY AND POSSIBLY SELL IT TO PAY THE DEBT. THE 248

DECLARATION, BYLAWS, AND RULES AND REGULATIONS OF THE COMMUNITY MAY PROHIBIT THE 249

OWNER FROM MAKING CHANGES TO THE PROPERTY WITHOUT AN ARCHITECTURAL REVIEW BY THE 250

ASSOCIATION (OR A COMMITTEE OF THE ASSOCIATION) AND THE APPROVAL OF THE ASSOCIATION. 251

PURCHASERS OF PROPERTY WITHIN THE COMMON INTEREST COMMUNITY SHOULD INVESTIGATE THE 252

FINANCIAL OBLIGATIONS OF MEMBERS OF THE ASSOCIATION. PURCHASERS SHOULD CAREFULLY 253

READ THE DECLARATION FOR THE COMMUNITY AND THE BYLAWS AND RULES AND REGULATIONS OF 254

THE ASSOCIATION. 255

7.2. Owners’ Association Documents. Owners’ Association Documents (Association Documents) consist of the 256

following: 257

7.2.1. All Owners’ Association declarations, articles of incorporation, bylaws, articles of organization, operating 258

agreements, rules and regulations, party wall agreements; 259

7.2.2. Minutes of most recent annual owners’ meeting; 260

7.2.3. Minutes of any directors’ or managers’ meetings during the six-month period immediately preceding the 261

date of this Contract. If none of the preceding minutes exist, then the most recent minutes, if any (§§ 7.2.1, 7.2.2 and 7.2.3, 262

collectively, Governing Documents); and 263

7.2.4. The most recent financial documents which consist of: (1) annual and most recent balance sheet, (2) annual 264

and most recent income and expenditures statement, (3) annual budget, (4) reserve study, and (5) notice of unpaid assessments, if 265

any (collectively, Financial Documents). 266

7.3. Association Documents to Buyer. 267

7.3.1. Seller to Provide Association Documents. Seller is obligated to provide to Buyer the Association 268

Documents, at Seller’s expense, on or before Association Documents Deadline. Seller authorizes the Association to provide the 269

Association Documents to Buyer, at Seller’s expense. Seller’s obligation to provide the Association Documents is fulfilled upon 270

Buyer’s receipt of the Association Documents, regardless of who provides such documents. 271

7.4. Conditional on Buyer’s Review. Buyer has the right to review the Association Documents. Buyer has the Right to 272

Terminate under § 25.1, on or before Association Documents Objection Deadline, based on any unsatisfactory provision in any 273

of the Association Documents, in Buyer’s sole subjective discretion. Should Buyer receive the Association Documents after 274

Association Documents Deadline, Buyer, at Buyer’s option, has the Right to Terminate under § 25.1 by Buyer’s Notice to 275

Terminate received by Seller on or before ten days after Buyer’s receipt of the Association Documents. If Buyer does not receive 276

the Association Documents, or if Buyer’s Notice to Terminate would otherwise be required to be received by Seller after Closing 277

Date, Buyer’s Notice to Terminate must be received by Seller on or before Closing. If Seller does not receive Buyer’s Notice to 278

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Terminate within such time, Buyer accepts the provisions of the Association Documents as satisfactory, and Buyer waives any 279

Right to Terminate under this provision, notwithstanding the provisions of § 8.6 (Right of First Refusal or Contract Approval). 280

8. TITLE INSURANCE, RECORD TITLE AND OFF-RECORD TITLE. 281

8.1. Evidence of Record Title. 282

8.1.1. Seller Selects Title Insurance Company. If this box is checked, Seller will select the title insurance 283

company to furnish the owner’s title insurance policy at Seller’s expense. On or before Record Title Deadline, Seller must furnish 284

to Buyer, a current commitment for an owner’s title insurance policy (Title Commitment), in an amount equal to the Purchase 285

Price, or if this box is checked, an Abstract of Title certified to a current date. Seller will cause the title insurance policy to be 286

issued and delivered to Buyer as soon as practicable at or after Closing. 287

8.1.2. Buyer Selects Title Insurance Company. If this box is checked, Buyer will select the title insurance 288

company to furnish the owner’s title insurance policy at Buyer’s expense. On or before Record Title Deadline, Buyer must 289

furnish to Seller, a current commitment for owner’s title insurance policy (Title Commitment), in an amount equal to the Purchase 290

Price. 291

If neither box in § 8.1.1 or § 8.1.2 is checked, § 8.1.1 applies. 292

8.1.3. Owner's Extended Coverage (OEC). The Title Commitment Will Will Not contain Owner’s 293

Extended Coverage (OEC). If the Title Commitment is to contain OEC, it will commit to delete or insure over the standard 294

exceptions which relate to: (1) parties in possession, (2) unrecorded easements, (3) survey matters, (4) unrecorded mechanics’ 295

liens, (5) gap period (period between the effective date and time of commitment to the date and time the deed is recorded), and (6) 296

unpaid taxes, assessments and unredeemed tax sales prior to the year of Closing. Any additional premium expense to obtain OEC 297

will be paid by Buyer Seller One-Half by Buyer and One-Half by Seller Other__________________________. 298

Regardless of whether the Contract requires OEC, the Title Insurance Commitment may not provide OEC or delete or insure over 299

any or all of the standard exceptions for OEC. The Title Insurance Company may require a New Survey or New ILC, defined 300

below, among other requirements for OEC. If the Title Insurance Commitment is not satisfactory to Buyer, Buyer has a right to 301

object under § 8.4 (Right to Object to Title, Resolution). 302

8.1.4. Title Documents. Title Documents consist of the following: (1) copies of any plats, declarations, 303

covenants, conditions and restrictions burdening the Property, and (2) copies of any other documents (or, if illegible, summaries of 304

such documents) listed in the schedule of exceptions (Exceptions) in the Title Commitment furnished to Buyer (collectively, Title 305

Documents). 306

8.1.5. Copies of Title Documents. Buyer must receive, on or before Record Title Deadline, copies of all Title 307

Documents. This requirement pertains only to documents as shown of record in the office of the clerk and recorder in the county 308

where the Property is located. The cost of furnishing copies of the documents required in this Section will be at the expense of the 309

party or parties obligated to pay for the owner’s title insurance policy. 310

8.1.6. Existing Abstracts of Title. Seller must deliver to Buyer copies of any abstracts of title covering all or any 311

portion of the Property (Abstract of Title) in Seller’s possession on or before Record Title Deadline. 312

8.2. Record Title. Buyer has the right to review and object to the Abstract of Title or Title Commitment and any of the 313

Title Documents as set forth in § 8.4 (Right to Object to Title, Resolution) on or before Record Title Objection Deadline. 314

Buyer’s objection may be based on any unsatisfactory form or content of Title Commitment or Abstract of Title, notwithstanding 315

§ 13, or any other unsatisfactory title condition, in Buyer’s sole subjective discretion. If the Abstract of Title, Title Commitment or 316

Title Documents are not received by Buyer on or before the Record Title Deadline, or if there is an endorsement to the Title 317

Commitment that adds a new Exception to title, a copy of the new Exception to title and the modified Title Commitment will be 318

delivered to Buyer. Buyer has until the earlier of Closing or ten days after receipt of such documents by Buyer to review and object 319

to: (1) any required Title Document not timely received by Buyer, (2) any change to the Abstract of Title, Title Commitment or 320

Title Documents, or (3) any endorsement to the Title Commitment. If Seller receives Buyer’s Notice to Terminate or Notice of 321

Title Objection, pursuant to this § 8.2 (Record Title), any title objection by Buyer is governed by the provisions set forth in § 8.4 322

(Right to Object to Title, Resolution). If Seller has fulfilled all Seller's obligations, if any, to deliver to Buyer all documents 323

required by § 8.1 (Evidence of Record Title) and Seller does not receive Buyer’s Notice to Terminate or Notice of Title Objection 324

by the applicable deadline specified above, Buyer accepts the condition of title as disclosed by the Abstract of Title, Title 325

Commitment and Title Documents as satisfactory. 326

8.3. Off-Record Title. Seller must deliver to Buyer, on or before Off-Record Title Deadline, true copies of all existing 327

surveys in Seller’s possession pertaining to the Property and must disclose to Buyer all easements, liens (including, without 328

limitation, governmental improvements approved, but not yet installed) or other title matters (including, without limitation, rights 329

of first refusal and options) not shown by public records, of which Seller has actual knowledge (Off-Record Matters). Buyer has 330

the right to inspect the Property to investigate if any third party has any right in the Property not shown by public records (e.g., 331

unrecorded easement, boundary line discrepancy or water rights). Buyer’s Notice to Terminate or Notice of Title Objection of any 332

unsatisfactory condition (whether disclosed by Seller or revealed by such inspection, notwithstanding § 8.2 and § 13), in Buyer’s 333

sole subjective discretion, must be received by Seller on or before Off-Record Title Objection Deadline. If an Off-Record Matter 334

is received by Buyer after the Off-Record Title Deadline, Buyer has until the earlier of Closing or ten days after receipt by Buyer 335

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to review and object to such Off-Record Matter. If Seller receives Buyer’s Notice to Terminate or Notice of Title Objection 336

pursuant to this § 8.3 (Off-Record Title), any title objection by Buyer and this Contract are governed by the provisions set forth in 337

§ 8.4 (Right to Object to Title, Resolution). If Seller does not receive Buyer’s Notice to Terminate or Notice of Title Objection by 338

the applicable deadline specified above, Buyer accepts title subject to such rights, if any, of third parties of which Buyer has actual 339

knowledge. 340

8.4. Right to Object to Title, Resolution. Buyer’s right to object to any title matters includes, but is not limited to those 341

matters set forth in §§ 8.2 (Record Title), 8.3 (Off-Record Title) and 13 (Transfer of Title), in Buyer’s sole subjective discretion. If 342

Buyer objects to any title matter, on or before the applicable deadline, Buyer has the following options: 343

8.4.1. Title Objection, Resolution. If Seller receives Buyer’s written notice objecting to any title matter (Notice 344

of Title Objection) on or before the applicable deadline, and if Buyer and Seller have not agreed to a written settlement thereof on 345

or before Title Resolution Deadline, this Contract will terminate on the expiration of Title Resolution Deadline, unless Seller 346

receives Buyer’s written withdrawal of Buyer’s Notice of Title Objection (i.e., Buyer’s written notice to waive objection to such 347

items and waives the Right to Terminate for that reason), on or before expiration of Title Resolution Deadline. If either the 348

Record Title Deadline or the Off-Record Title Deadline, or both, are extended to the earlier of Closing or ten days after receipt of 349

the applicable documents by Buyer, pursuant to § 8.2 (Record Title) or § 8.3 (Off-Record Title), the Title Resolution Deadline also 350

will be automatically extended to the earlier of Closing or fifteen days after Buyer's receipt of the applicable documents; or 351

8.4.2. Title Objection, Right to Terminate. Buyer may exercise the Right to Terminate under § 25.1, on or 352

before the applicable deadline, based on any unsatisfactory title matter, in Buyer’s sole subjective discretion. 353

8.5. Special Taxing Districts. SPECIAL TAXING DISTRICTS MAY BE SUBJECT TO GENERAL OBLIGATION 354

INDEBTEDNESS THAT IS PAID BY REVENUES PRODUCED FROM ANNUAL TAX LEVIES ON THE TAXABLE 355

PROPERTY WITHIN SUCH DISTRICTS. PROPERTY OWNERS IN SUCH DISTRICTS MAY BE PLACED AT RISK 356

FOR INCREASED MILL LEVIES AND TAX TO SUPPORT THE SERVICING OF SUCH DEBT WHERE 357

CIRCUMSTANCES ARISE RESULTING IN THE INABILITY OF SUCH A DISTRICT TO DISCHARGE SUCH 358

INDEBTEDNESS WITHOUT SUCH AN INCREASE IN MILL LEVIES. BUYERS SHOULD INVESTIGATE THE 359

SPECIAL TAXING DISTRICTS IN WHICH THE PROPERTY IS LOCATED BY CONTACTING THE COUNTY 360

TREASURER, BY REVIEWING THE CERTIFICATE OF TAXES DUE FOR THE PROPERTY, AND BY OBTAINING 361

FURTHER INFORMATION FROM THE BOARD OF COUNTY COMMISSIONERS, THE COUNTY CLERK AND 362

RECORDER, OR THE COUNTY ASSESSOR. 363

Buyer has the Right to Terminate under § 25.1, on or before Off-Record Title Objection Deadline, based on any 364

unsatisfactory effect of the Property being located within a special taxing district, in Buyer’s sole subjective discretion. 365

8.6. Right of First Refusal or Contract Approval. If there is a right of first refusal on the Property or a right to approve 366

this Contract, Seller must promptly submit this Contract according to the terms and conditions of such right. If the holder of the 367

right of first refusal exercises such right or the holder of a right to approve disapproves this Contract, this Contract will terminate. 368

If the right of first refusal is waived explicitly or expires, or the Contract is approved, this Contract will remain in full force and 369

effect. Seller must promptly notify Buyer in writing of the foregoing. If expiration or waiver of the right of first refusal or approval 370

of this Contract has not occurred on or before Right of First Refusal Deadline, this Contract will then terminate. 371

8.7. Title Advisory. The Title Documents affect the title, ownership and use of the Property and should be reviewed 372

carefully. Additionally, other matters not reflected in the Title Documents may affect the title, ownership and use of the Property, 373

including, without limitation, boundary lines and encroachments, set-back requirements, area, zoning, building code violations, 374

unrecorded easements and claims of easements, leases and other unrecorded agreements, water on or under the Property, and 375

various laws and governmental regulations concerning land use, development and environmental matters. 376

8.7.1. OIL, GAS, WATER AND MINERAL DISCLOSURE. THE SURFACE ESTATE OF THE 377

PROPERTY MAY BE OWNED SEPARATELY FROM THE UNDERLYING MINERAL ESTATE, AND TRANSFER 378

OF THE SURFACE ESTATE MAY NOT NECESSARILY INCLUDE TRANSFER OF THE MINERAL ESTATE OR 379

WATER RIGHTS. THIRD PARTIES MAY OWN OR LEASE INTERESTS IN OIL, GAS, OTHER MINERALS, 380

GEOTHERMAL ENERGY OR WATER ON OR UNDER THE SURFACE OF THE PROPERTY, WHICH INTERESTS 381

MAY GIVE THEM RIGHTS TO ENTER AND USE THE SURFACE OF THE PROPERTY TO ACCESS THE 382

MINERAL ESTATE, OIL, GAS OR WATER. 383

8.7.2. SURFACE USE AGREEMENT. THE USE OF THE SURFACE ESTATE OF THE PROPERTY TO 384

ACCESS THE OIL, GAS OR MINERALS MAY BE GOVERNED BY A SURFACE USE AGREEMENT, A 385

MEMORANDUM OR OTHER NOTICE OF WHICH MAY BE RECORDED WITH THE COUNTY CLERK AND 386

RECORDER. 387

8.7.3. OIL AND GAS ACTIVITY. OIL AND GAS ACTIVITY THAT MAY OCCUR ON OR ADJACENT 388

TO THE PROPERTY MAY INCLUDE, BUT IS NOT LIMITED TO, SURVEYING, DRILLING, WELL COMPLETION 389

OPERATIONS, STORAGE, OIL AND GAS, OR PRODUCTION FACILITIES, PRODUCING WELLS, REWORKING 390

OF CURRENT WELLS, AND GAS GATHERING AND PROCESSING FACILITIES. 391

8.7.4. ADDITIONAL INFORMATION. BUYER IS ENCOURAGED TO SEEK ADDITIONAL 392

INFORMATION REGARDING OIL AND GAS ACTIVITY ON OR ADJACENT TO THE PROPERTY, INCLUDING 393




DRILLING PERMIT APPLICATIONS. THIS INFORMATION MAY BE AVAILABLE FROM THE COLORADO OIL 394

AND GAS CONSERVATION COMMISSION. 395

8.7.5. Title Insurance Exclusions. Matters set forth in this Section, and others, may be excepted, excluded from, 396

or not covered by the owner’s title insurance policy. 397

8.8. Consult an Attorney. Buyer is advised to timely consult legal counsel with respect to all such matters as there are 398

strict time limits provided in this Contract (e.g., Record Title Objection Deadline and Off-Record Title Objection Deadline). 399

9. NEW ILC, NEW SURVEY. 400

9.1. New ILC or New Survey. If the box is checked, a New Improvement Location Certificate (New ILC) 401

New Survey in the form of ___________________________________________ is required and the following will apply: 402

9.1.1. Ordering of New ILC or New Survey. Seller Buyer will order the New ILC or New Survey. The 403

New ILC or New Survey may also be a previous ILC or survey that is in the above-required form, certified and updated as of a 404

date after the date of this Contract. 405

9.1.2. Payment for New ILC or New Survey. The cost of the New ILC or New Survey will be paid, on or 406

before Closing, by: Seller Buyer or: 407

408

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9.1.3. Delivery of New ILC or New Survey. Buyer, Seller, the issuer of the Title Commitment (or the provider 411

of the opinion of title if an Abstract of Title), and _____________________ will receive a New ILC or New Survey on or before 412

New ILC or New Survey Deadline. 413

9.1.4. Certification of New ILC or New Survey. The New ILC or New Survey will be certified by the surveyor 414

to all those who are to receive the New ILC or New Survey. 415

9.2. Buyer’s Right to Waive or Change New ILC or New Survey Selection. Buyer may select a New ILC or New 416

Survey different than initially specified in this Contract if there is no additional cost to Seller or change to the New ILC or New 417

Survey Objection Deadline. Buyer may, in Buyer’s sole subjective discretion, waive a New ILC or New Survey if done prior to 418

Seller incurring any cost for the same. 419

9.3. New ILC or New Survey Objection. Buyer has the right to review and object to the New ILC or New Survey. If 420

the New ILC or New Survey is not timely received by Buyer or is unsatisfactory to Buyer, in Buyer’s sole subjective discretion, 421

Buyer may, on or before New ILC or New Survey Objection Deadline, notwithstanding § 8.3 or § 13: 422

9.3.1. Notice to Terminate. Notify Seller in writing that this Contract is terminated; or 423

9.3.2. New ILC or New Survey Objection. Deliver to Seller a written description of any matter that was to be 424

shown or is shown in the New ILC or New Survey that is unsatisfactory and that Buyer requires Seller to correct. 425

9.3.3. New ILC or New Survey Resolution. If a New ILC or New Survey Objection is received by Seller, on 426

or before New ILC or New Survey Objection Deadline, and if Buyer and Seller have not agreed in writing to a settlement 427

thereof on or before New ILC or New Survey Resolution Deadline, this Contract will terminate on expiration of the New ILC 428

or New Survey Resolution Deadline, unless Seller receives Buyer’s written withdrawal of the New ILC or New Survey 429

Objection before such termination, i.e., on or before expiration of New ILC or New Survey Resolution Deadline. 430

DISCLOSURE, INSPECTION AND DUE DILIGENCE 431

10. PROPERTY DISCLOSURE, INSPECTION, INDEMNITY, INSURABILITY, DUE DILIGENCE, BUYER 432

DISCLOSURE AND SOURCE OF WATER. 433

10.1. Seller’s Property Disclosure. On or before Seller’s Property Disclosure Deadline, Seller agrees to deliver to 434

Buyer the most current version of the applicable Colorado Real Estate Commission’s Seller’s Property Disclosure form completed 435

by Seller to Seller’s actual knowledge, current as of the date of this Contract. 436

10.2. Disclosure of Latent Defects; Present Condition. Seller must disclose to Buyer any latent defects actually known 437

by Seller. Seller agrees that disclosure of latent defects will be in writing. Except as otherwise provided in this Contract, Buyer 438

acknowledges that Seller is conveying the Property to Buyer in an “As Is” condition, “Where Is” and “With All Faults.” 439

10.3. Inspection. Unless otherwise provided in this Contract, Buyer, acting in good faith, has the right to have inspections 440

(by one or more third parties, personally or both) of the Property and Inclusions (Inspection), at Buyer’s expense. If (1) the 441

physical condition of the Property, including, but not limited to, the roof, walls, structural integrity of the Property, the electrical, 442

plumbing, HVAC and other mechanical systems of the Property, (2) the physical condition of the Inclusions, (3) service to the 443

Property (including utilities and communication services), systems and components of the Property (e.g., heating and plumbing), 444

(4) any proposed or existing transportation project, road, street or highway, or (5) any other activity, odor or noise (whether on or 445

off the Property) and its effect or expected effect on the Property or its occupants is unsatisfactory, in Buyer’s sole subjective 446

discretion, Buyer may, on or before Inspection Objection Deadline: 447




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10.3.2. Inspection Objection. Deliver to Seller a written description of any unsatisfactory physical condition that 449

Buyer requires Seller to correct. 450

10.3.3. Inspection Resolution. If an Inspection Objection is received by Seller, on or before Inspection Objection 451

Deadline, and if Buyer and Seller have not agreed in writing to a settlement thereof on or before Inspection Resolution Deadline, 452

this Contract will terminate on Inspection Resolution Deadline unless Seller receives Buyer’s written withdrawal of the 453

Inspection Objection before such termination, i.e., on or before expiration of Inspection Resolution Deadline. 454

10.4. Damage, Liens and Indemnity. Buyer, except as otherwise provided in this Contract or other written agreement 455

between the parties, is responsible for payment for all inspections, tests, surveys, engineering reports, or other reports performed at 456

Buyer’s request (Work) and must pay for any damage that occurs to the Property and Inclusions as a result of such Work. Buyer 457

must not permit claims or liens of any kind against the Property for Work performed on the Property. Buyer agrees to indemnify, 458

protect and hold Seller harmless from and against any liability, damage, cost or expense incurred by Seller and caused by any such 459

Work, claim, or lien. This indemnity includes Seller’s right to recover all costs and expenses incurred by Seller to defend against 460

any such liability, damage, cost or expense, or to enforce this section, including Seller’s reasonable attorney fees, legal fees and 461

expenses. The provisions of this section survive the termination of this Contract. This § 10.4 does not apply to items performed 462

pursuant to an Inspection Resolution. 463

10.5. Insurability. Buyer has the right to review and object to the availability, terms and conditions of and premium for 464

property insurance (Property Insurance). Buyer has the Right to Terminate under § 25.1, on or before Property Insurance 465

Objection Deadline, based on any unsatisfactory provision of the Property Insurance, in Buyer’s sole subjective discretion. 466

10.6. Due Diligence. 467

10.6.1. Due Diligence Documents. If the respective box is checked, Seller agrees to deliver copies of the following 468

documents and information pertaining to the Property (Due Diligence Documents) to Buyer on or before Due Diligence 469

Documents Delivery Deadline: 470

10.6.1.1. All current leases, including any amendments or other occupancy agreements, pertaining to the 471

Property. Those leases or other occupancy agreements pertaining to the Property that survive Closing are as follows (Leases): 472

473

474

10.6.1.2. Other documents and information: 475

476

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478

479

10.6.2. Due Diligence Documents Review and Objection. Buyer has the right to review and object to Due 480

Diligence Documents. If the Due Diligence Documents are not supplied to Buyer or are unsatisfactory in Buyer’s sole subjective 481

discretion, Buyer may, on or before Due Diligence Documents Objection Deadline: 482


10.6.2.2. Due Diligence Documents Objection. Deliver to Seller a written description of any 484

unsatisfactory Due Diligence Documents that Buyer requires Seller to correct. 485

10.6.3. Due Diligence Documents Resolution. If a Due Diligence Documents Objection is received by Seller, on 486

or before Due Diligence Documents Objection Deadline, and if Buyer and Seller have not agreed in writing to a settlement 487

thereof on or before Due Diligence Documents Resolution Deadline, this Contract will terminate on Due Diligence Documents 488

Resolution Deadline unless Seller receives Buyer’s written withdrawal of the Due Diligence Documents Objection before such 489

termination, i.e., on or before expiration of Due Diligence Documents Resolution Deadline. 490

10.7. Conditional Upon Sale of Property. This Contract is conditional upon the sale and closing of that certain property 491

owned by Buyer and commonly known as ___________________________________________. Buyer has the Right to Terminate 492

under § 25.1 effective upon Seller's receipt of Buyer’s Notice to Terminate on or before Conditional Sale Deadline if such 493

property is not sold and closed by such deadline. This § 10.7 is for the sole benefit of Buyer. If Seller does not receive Buyer’s 494

Notice to Terminate on or before Conditional Sale Deadline, Buyer waives any Right to Terminate under this provision. 495

10.8. Source of Potable Water (Residential Land and Residential Improvements Only). Buyer Does Does Not 496

acknowledge receipt of a copy of Seller’s Property Disclosure or Source of Water Addendum disclosing the source of potable water 497

for the Property. There is No Well. Buyer Does Does Not acknowledge receipt of a copy of the current well permit. 498

Note to Buyer: SOME WATER PROVIDERS RELY, TO VARYING DEGREES, ON NONRENEWABLE GROUND 499

WATER. YOU MAY WISH TO CONTACT YOUR PROVIDER (OR INVESTIGATE THE DESCRIBED SOURCE) TO 500

DETERMINE THE LONG-TERM SUFFICIENCY OF THE PROVIDER’S WATER SUPPLIES. 501

10.9. Carbon Monoxide Alarms. Note: If the improvements on the Property have a fuel-fired heater or appliance, a 502

fireplace, or an attached garage and include one or more rooms lawfully used for sleeping purposes (Bedroom), the parties 503

acknowledge that Colorado law requires that Seller assure the Property has an operational carbon monoxide alarm installed within 504

fifteen feet of the entrance to each Bedroom or in a location as required by the applicable building code. 505

10.10. Lead-Based Paint. Unless exempt, if the improvements on the Property include one or more residential dwellings 506

for which a building permit was issued prior to January 1, 1978, this Contract is void unless (1) a completed Lead-Based Paint 507

N/A

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Disclosure (Sales) form is signed by Seller, the required real estate licensees and Buyer, and (2) Seller receives the completed and 508

fully executed form prior to the time when this Contract is signed by all parties. Buyer acknowledges timely receipt of a completed 509

Lead-Based Paint Disclosure (Sales) form signed by Seller and the real estate licensees. 510

10.11. Methamphetamine Disclosure. If Seller knows that methamphetamine was ever manufactured, processed, cooked, 511

disposed of, used or stored at the Property, Seller is required to disclose such fact. No disclosure is required if the Property was 512

remediated in accordance with state standards and other requirements are fulfilled pursuant to § 25-18.5-102, C.R.S. Buyer further 513

acknowledges that Buyer has the right to engage a certified hygienist or industrial hygienist to test whether the Property has ever 514

been used as a methamphetamine laboratory. Buyer has the Right to Terminate under § 25.1, upon Seller’s receipt of Buyer’s 515

written Notice to Terminate, notwithstanding any other provision of this Contract, based on Buyer’s test results that indicate the 516

Property has been contaminated with methamphetamine, but has not been remediated to meet the standards established by rules of 517

the State Board of Health promulgated pursuant to § 25-18.5-102, C.R.S. Buyer must promptly give written notice to Seller of the 518

results of the test. 519

11. TENANT ESTOPPEL STATEMENTS. [Intentionally Deleted] 520

CLOSING PROVISIONS 521

12. CLOSING DOCUMENTS, INSTRUCTIONS AND CLOSING. 522

12.1. Closing Documents and Closing Information. Seller and Buyer will cooperate with the Closing Company to 523

enable the Closing Company to prepare and deliver documents required for Closing to Buyer and Seller and their designees. If 524

Buyer is obtaining a new loan to purchase the Property, Buyer acknowledges Buyer’s lender is required to provide the Closing 525

Company, in a timely manner, all required loan documents and financial information concerning Buyer’s new loan. Buyer and 526

Seller will furnish any additional information and documents required by Closing Company that will be necessary to complete this 527

transaction. Buyer and Seller will sign and complete all customary or reasonably required documents at or before Closing. 528

12.2. Closing Instructions. Colorado Real Estate Commission’s Closing Instructions Are Are Not executed with 529

this Contract. 530

12.3. Closing. Delivery of deed from Seller to Buyer will be at closing (Closing). Closing will be on the date specified as 531

the Closing Date or by mutual agreement at an earlier date. The hour and place of Closing will be as designated by 532

________________________________________. 533

12.4. Disclosure of Settlement Costs. Buyer and Seller acknowledge that costs, quality, and extent of service vary 534

between different settlement service providers (e.g., attorneys, lenders, inspectors and title companies). 535

13. TRANSFER OF TITLE. Subject to tender of payment at Closing as required herein and compliance by Buyer with the 536

other terms and provisions hereof, Seller must execute and deliver a good and sufficient ______________________________ deed 537

to Buyer, at Closing, conveying the Property free and clear of all taxes except the general taxes for the year of Closing. Except as 538

provided herein, title will be conveyed free and clear of all liens, including any governmental liens for special improvements 539

installed as of the date of Buyer’s signature hereon, whether assessed or not. Title will be conveyed subject to: 540

13.1. Those specific Exceptions described by reference to recorded documents as reflected in the Title Documents 541

accepted by Buyer in accordance with Record Title, 542

13.2. Distribution utility easements (including cable TV), 543

13.3. Those specifically described rights of third parties not shown by the public records of which Buyer has actual 544

knowledge and which were accepted by Buyer in accordance with Off-Record Title and New ILC or New Survey, 545

13.4. Inclusion of the Property within any special taxing district, and 546

13.5. Any special assessment if the improvements were not installed as of the date of Buyer’s signature hereon, whether 547

assessed prior to or after Closing, and 548

13.6. Other _______________________________________. 549

14. PAYMENT OF ENCUMBRANCES. Any encumbrance required to be paid will be paid at or before Closing from the 550

proceeds of this transaction or from any other source. 551

15. CLOSING COSTS, CLOSING FEE, ASSOCIATION FEES AND TAXES. 552

15.1. Closing Costs. Buyer and Seller must pay, in Good Funds, their respective closing costs and all other items required 553

to be paid at Closing, except as otherwise provided herein. 554

15.2. Closing Services Fee. The fee for real estate closing services must be paid at Closing by Buyer Seller 555

One-Half by Buyer and One-Half by Seller Other _______________________________________. 556

15.3. Status Letter and Record Change Fees. Any fees incident to the issuance of Association’s statement of 557

assessments (Status Letter) must be paid by None Buyer Seller One-Half by Buyer and One-Half by Seller. 558

Any record change fee assessed by the Association including, but not limited to, ownership record transfer fees regardless of name 559

Seller

General Warranty

n/a

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or title of such fee (Association’s Record Change Fee) must be paid by None Buyer Seller One-Half by Buyer 560

and One-Half by Seller. 561

15.4. Local Transfer Tax. The Local Transfer Tax of ________% of the Purchase Price must be paid at Closing by 562

None Buyer Seller One-Half by Buyer and One-Half by Seller. 563

15.5. Private Transfer Fee. Private transfer fees and other fees due to a transfer of the Property, payable at Closing, such 564

as community association fees, developer fees and foundation fees, must be paid at Closing by None Buyer Seller 565

One-Half by Buyer and One-Half by Seller. The Private Transfer fee, whether one or more, is for the following association(s): 566

in the total amount of % of the Purchase Price or $_________________. 567

15.6. Water Transfer Fees. The Water Transfer Fees can change. The fees, as of the date of this Contract, do not exceed 568

$____________ for: 569

Water Stock/Certificates Water District 570

Augmentation Membership Small Domestic Water Company __________ 571

and must be paid at Closing by None Buyer Seller One-Half by Buyer and One-Half by Seller 572

15.7. Sales and Use Tax. Any sales and use tax that may accrue because of this transaction must be paid when due by 573


16. PRORATIONS. The following will be prorated to the Closing Date, except as otherwise provided: 575

16.1. Taxes. Personal property taxes, if any, special taxing district assessments, if any, and general real estate taxes for the 576

year of Closing, based on Taxes for the Calendar Year Immediately Preceding Closing Most Recent Mill Levy and 577

Most Recent Assessed Valuation, adjusted by any applicable qualifying seniors property tax exemption, qualifying disabled 578

veteran exemption or Other . 579

16.2. Rents. Rents based on Rents Actually Received Accrued. At Closing, Seller will transfer or credit to 580

Buyer the security deposits for all Leases assigned, or any remainder after lawful deductions, and notify all tenants in writing of 581

such transfer and of the transferee’s name and address. Seller must assign to Buyer all Leases in effect at Closing and Buyer must 582

assume Seller’s obligations under such Leases. 583

16.3. Association Assessments. Current regular Association assessments and dues (Association Assessments) paid in 584

advance will be credited to Seller at Closing. Cash reserves held out of the regular Association Assessments for deferred 585

maintenance by the Association will not be credited to Seller except as may be otherwise provided by the Governing Documents. 586

Buyer acknowledges that Buyer may be obligated to pay the Association, at Closing, an amount for reserves or working capital. 587

Any special assessment assessed prior to Closing Date by the Association will be the obligation of Buyer Seller. Except 588

however, any special assessment by the Association for improvements that have been installed as of the date of Buyer’s signature 589

hereon, whether assessed prior to or after Closing, will be the obligation of Seller. Seller represents that the Association 590

Assessments are currently payable at approximately $______________ per ______________ and that there are no unpaid regular 591

or special assessments against the Property except the current regular assessments and ______________________________. Such 592

assessments are subject to change as provided in the Governing Documents. Seller agrees to promptly request the Association to 593

deliver to Buyer before Closing Date a current Status Letter. 594

16.4. Other Prorations. Water and sewer charges, propane, interest on continuing loan, and _______________________. 595

16.5. Final Settlement. Unless otherwise agreed in writing, these prorations are final. 596

17. POSSESSION. Possession of the Property will be delivered to Buyer on Possession Date at Possession Time, subject to 597

the Leases as set forth in § 10.6.1.1. 598

599

If Seller, after Closing, fails to deliver possession as specified, Seller will be subject to eviction and will be additionally liable 600

to Buyer for payment of $______________ per day (or any part of a day notwithstanding § 18.1) from Possession Date and 601

Possession Time until possession is delivered. 602

Buyer represents that Buyer will occupy the Property as Buyer’s principal residence unless the following box is checked, 603

then Buyer Does Not represent that Buyer will occupy the Property as Buyer’s principal residence. 604

If the box is checked, Buyer and Seller agree to execute a Post-Closing Occupancy Agreement. 605

GENERAL PROVISIONS 606

18. DAY; COMPUTATION OF PERIOD OF DAYS, DEADLINE. 607

18.1. Day. As used in this Contract, the term “day” means the entire day ending at 11:59 p.m., United States Mountain 608

Time (Standard or Daylight Savings as applicable). 609

18.2. Computation of Period of Days, Deadline. In computing a period of days, when the ending date is not specified, 610

the first day is excluded and the last day is included (e.g., three days after MEC). If any deadline falls on a Saturday, Sunday or 611

federal or Colorado state holiday (Holiday), such deadline Will Will Not be extended to the next day that is not a 612

Saturday, Sunday or Holiday. Should neither box be checked, the deadline will not be extended. 613

50.00

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Bruce

Rectangle

Bruce

Line

Bruce

Line


19. CAUSES OF LOSS, INSURANCE; DAMAGE TO INCLUSIONS AND SERVICES; CONDEMNATION; AND 614

WALK-THROUGH. Except as otherwise provided in this Contract, the Property, Inclusions or both will be delivered in the 615

condition existing as of the date of this Contract, ordinary wear and tear excepted. 616

19.1. Causes of Loss, Insurance. In the event the Property or Inclusions are damaged by fire, other perils or causes of 617

loss prior to Closing in an amount of not more than ten percent of the total Purchase Price (Property Damage), and if the repair of 618

the damage will be paid by insurance (other than the deductible to be paid by Seller), then Seller, upon receipt of the insurance 619

proceeds, will use Seller’s reasonable efforts to repair the Property before Closing Date. Buyer has the Right to Terminate under 620

§ 25.1, on or before Closing Date if the Property is not repaired before Closing Date or if the damage exceeds such sum. Should 621

Buyer elect to carry out this Contract despite such Property Damage, Buyer is entitled to a credit at Closing for all insurance 622

proceeds that were received by Seller (but not the Association, if any) resulting from damage to the Property and Inclusions, plus 623

the amount of any deductible provided for in the insurance policy. This credit may not exceed the Purchase Price. In the event 624

Seller has not received the insurance proceeds prior to Closing, the parties may agree to extend the Closing Date to have the 625

Property repaired prior to Closing or, at the option of Buyer, (1) Seller must assign to Buyer the right to the proceeds at Closing, if 626

acceptable to Seller’s insurance company and Buyer’s lender; or (2) the parties may enter into a written agreement prepared by the 627

parties or their attorney requiring the Seller to escrow at Closing from Seller’s sale proceeds the amount Seller has received and 628

will receive due to such damage, not exceeding the total Purchase Price, plus the amount of any deductible that applies to the 629

insurance claim. 630

19.2. Damage, Inclusions and Services. Should any Inclusion or service (including utilities and communication 631

services), system, component or fixture of the Property (collectively Service) (e.g., heating or plumbing), fail or be damaged 632

between the date of this Contract and Closing or possession, whichever is earlier, then Seller is liable for the repair or replacement 633

of such Inclusion or Service with a unit of similar size, age and quality, or an equivalent credit, but only to the extent that the 634

maintenance or replacement of such Inclusion or Service is not the responsibility of the Association, if any, less any insurance 635

proceeds received by Buyer covering such repair or replacement. If the failed or damaged Inclusion or Service is not repaired or 636

replaced on or before Closing or possession, whichever is earlier, Buyer has the Right to Terminate under § 25.1, on or before 637

Closing Date, or, at the option of Buyer, Buyer is entitled to a credit at Closing for the repair or replacement of such Inclusion or 638

Service. Such credit must not exceed the Purchase Price. If Buyer receives such a credit, Seller's right for any claim against the 639

Association, if any, will survive Closing. Seller and Buyer are aware of the existence of pre-owned home warranty programs that 640

may be purchased and may cover the repair or replacement of such Inclusions. 641

19.3. Condemnation. In the event Seller receives actual notice prior to Closing that a pending condemnation action may 642

result in a taking of all or part of the Property or Inclusions, Seller must promptly notify Buyer, in writing, of such condemnation 643

action. Buyer has the Right to Terminate under § 25.1, on or before Closing Date, based on such condemnation action, in Buyer’s 644

sole subjective discretion. Should Buyer elect to consummate this Contract despite such diminution of value to the Property and 645

Inclusions, Buyer is entitled to a credit at Closing for all condemnation proceeds awarded to Seller for the diminution in the value 646

of the Property or Inclusions but such credit will not include relocation benefits or expenses, or exceed the Purchase Price. 647

19.4. Walk-Through and Verification of Condition. Buyer, upon reasonable notice, has the right to walk through the 648

Property prior to Closing to verify that the physical condition of the Property and Inclusions complies with this Contract. 649

20. RECOMMENDATION OF LEGAL AND TAX COUNSEL. By signing this Contract, Buyer and Seller acknowledge 650

that the respective broker has advised that this Contract has important legal consequences and has recommended the examination 651

of title and consultation with legal and tax or other counsel before signing this Contract. 652

21. TIME OF ESSENCE, DEFAULT AND REMEDIES. Time is of the essence for all dates and deadlines in this Contract. 653

This means that all dates and deadlines are strict and absolute. If any payment due, including Earnest Money, is not paid, honored 654

or tendered when due, or if any obligation is not performed timely as provided in this Contract or waived, the non-defaulting 655

party has the following remedies: 656

21.1. If Buyer is in Default: 657

21.1.1. Specific Performance. Seller may elect to cancel this Contract and all Earnest Money (whether or not paid 658

by Buyer) will be paid to Seller and retained by Seller. It is agreed that the Earnest Money is not a penalty, and the Parties agree 659

the amount is fair and reasonable. Seller may recover such additional damages as may be proper. Alternatively, Seller may elect 660

to treat this Contract as being in full force and effect and Seller has the right to specific performance or damages, or both. 661

21.1.2. Liquidated Damages, Applicable. This § 21.1.2 applies unless the box in § 21.1.1. is checked. Seller 662

may cancel this Contract. All Earnest Money (whether or not paid by Buyer) will be paid to Seller, and retained by Seller. It is 663

agreed that the Earnest Money specified in § 4.1 is LIQUIDATED DAMAGES, and not a penalty, which amount the parties agree 664

is fair and reasonable and (except as provided in §§ 10.4, 22, 23 and 24), said payment of Earnest Money is SELLER’S ONLY 665

REMEDY for Buyer’s failure to perform the obligations of this Contract. Seller expressly waives the remedies of specific 666

performance and additional damages. 667

21.2. If Seller is in Default: Buyer may elect to treat this Contract as canceled, in which case all Earnest Money received 668

hereunder will be returned and Buyer may recover such damages as may be proper. Alternatively, Buyer may elect to treat this 669

Contract as being in full force and effect and Buyer has the right to specific performance or damages, or both. 670




22. LEGAL FEES, COST AND EXPENSES. Anything to the contrary herein notwithstanding, in the event of any arbitration 671

or litigation relating to this Contract, prior to or after Closing Date, the arbitrator or court must award to the prevailing party all 672

reasonable costs and expenses, including attorney fees, legal fees and expenses. 673

23. MEDIATION. If a dispute arises relating to this Contract, (whether prior to or after Closing) and is not resolved, the parties 674

must first proceed, in good faith, to mediation. Mediation is a process in which the parties meet with an impartial person who helps 675

to resolve the dispute informally and confidentially. Mediators cannot impose binding decisions. Before any mediated settlement is 676

binding, the parties to the dispute must agree to the settlement, in writing. The parties will jointly appoint an acceptable mediator 677

and will share equally in the cost of such mediation. The obligation to mediate, unless otherwise agreed, will terminate if the entire 678

dispute is not resolved within thirty days of the date written notice requesting mediation is delivered by one party to the other at 679

that party’s last known address (physical or electronic as provided in § 27). Nothing in this Section prohibits either party from 680

filing a lawsuit and recording a lis pendens affecting the Property, before or after the date of written notice requesting mediation. 681

This section will not alter any date in this Contract, unless otherwise agreed. 682

24. EARNEST MONEY DISPUTE. Except as otherwise provided herein, Earnest Money Holder must release the Earnest 683

Money following receipt of written mutual instructions, signed by both Buyer and Seller. In the event of any controversy regarding 684

the Earnest Money, Earnest Money Holder is not required to release the Earnest Money. Earnest Money Holder, in its sole 685

subjective discretion, has several options: (1) wait for any proceeding between Buyer and Seller; (2) interplead all parties and 686

deposit Earnest Money into a court of competent jurisdiction, (Earnest Money Holder is entitled to recover court costs and 687

reasonable attorney and legal fees incurred with such action); or (3) provide notice to Buyer and Seller that unless Earnest Money 688

Holder receives a copy of the Summons and Complaint or Claim (between Buyer and Seller) containing the case number of the 689

lawsuit (Lawsuit) within one hundred twenty days of Earnest Money Holder’s notice to the parties, Earnest Money Holder is 690

authorized to return the Earnest Money to Buyer. In the event Earnest Money Holder does receive a copy of the Lawsuit, and has 691

not interpled the monies at the time of any Order, Earnest Money Holder must disburse the Earnest Money pursuant to the Order 692

of the Court. The parties reaffirm the obligation of Mediation. This Section will survive cancellation or termination of this 693

Contract. 694

25. TERMINATION. 695

25.1. Right to Terminate. If a party has a right to terminate, as provided in this Contract (Right to Terminate), the 696

termination is effective upon the other party’s receipt of a written notice to terminate (Notice to Terminate), provided such written 697

notice was received on or before the applicable deadline specified in this Contract. If the Notice to Terminate is not received on or 698

before the specified deadline, the party with the Right to Terminate accepts the specified matter, document or condition as 699

satisfactory and waives the Right to Terminate under such provision. 700

25.2. Effect of Termination. In the event this Contract is terminated, all Earnest Money received hereunder will be 701

returned and the parties are relieved of all obligations hereunder, subject to §§ 10.4, 22, 23 and 24. 702

26. ENTIRE AGREEMENT, MODIFICATION, SURVIVAL; SUCCESSORS. This Contract, its exhibits and specified 703

addenda, constitute the entire agreement between the parties relating to the subject hereof, and any prior agreements pertaining 704

thereto, whether oral or written, have been merged and integrated into this Contract. No subsequent modification of any of the 705

terms of this Contract is valid, binding upon the parties, or enforceable unless made in writing and signed by the parties. Any right 706

or obligation in this Contract that, by its terms, exists or is intended to be performed after termination or Closing survives the 707

same. Any successor to a Party receives the predecessor’s benefits and obligations of this Contract. 708

27. NOTICE, DELIVERY, AND CHOICE OF LAW. 709

27.1. Physical Delivery and Notice. Any document, or notice to Buyer or Seller must be in writing, except as provided in 710

§ 27.2, and is effective when physically received by such party, any individual named in this Contract to receive documents or 711

notices for such party, the Broker, or Brokerage Firm of Broker working with such party (except any notice or delivery after 712

Closing must be received by the party, not Broker or Brokerage Firm). 713

27.2. Electronic Notice. As an alternative to physical delivery, any notice, may be delivered in electronic form to Buyer 714

or Seller, any individual named in this Contract to receive documents or notices for such party, the Broker or Brokerage Firm of 715

Broker working with such party (except any notice or delivery after Closing must be received by the party; not Broker or 716

Brokerage Firm) at the electronic address of the recipient by facsimile, email or ______________________________________. 717

27.3. Electronic Delivery. Electronic Delivery of documents and notice may be delivered by: (1) email at the email 718

address of the recipient, (2) a link or access to a website or server provided the recipient receives the information necessary to 719

access the documents, or (3) facsimile at the Fax No. of the recipient. 720

27.4. Choice of Law. This Contract and all disputes arising hereunder are governed by and construed in accordance with 721

the laws of the State of Colorado that would be applicable to Colorado residents who sign a contract in Colorado for real property 722

located in Colorado. 723




28. NOTICE OF ACCEPTANCE, COUNTERPARTS. This proposal will expire unless accepted in writing, by Buyer and 724

Seller, as evidenced by their signatures below, and the offering party receives notice of such acceptance pursuant to § 27 on or 725

before Acceptance Deadline Date and Acceptance Deadline Time. If accepted, this document will become a contract between 726

Seller and Buyer. A copy of this Contract may be executed by each party, separately, and when each party has executed a copy 727

thereof, such copies taken together are deemed to be a full and complete contract between the parties. 728

29. GOOD FAITH. Buyer and Seller acknowledge that each party has an obligation to act in good faith including, but not 729

limited to, exercising the rights and obligations set forth in the provisions of Financing Conditions and Obligations, Title 730

Insurance, Record Title and Off-Record Title, New ILC, New Survey and Property Disclosure, Inspection, Indemnity, 731

Insurability, Due Diligence, Buyer Disclosure and Source of Water. 732

ADDITIONAL PROVISIONS AND ATTACHMENTS 733

30. ADDITIONAL PROVISIONS. (The following additional provisions have not been approved by the Colorado Real Estate 734

Commission.) 735

736

737

738

739

740

741

742

743

31. ATTACHMENTS. 744

31.1. The following attachments are a part of this Contract: 745

746

31.1.1. Post-Closing Occupancy Agreement. If the Post-Closing Occupancy Agreement box is checked in § 17 the Post-747

Closing Occupancy Agreement is attached. 748

749

750

751

31.2. The following disclosure forms are attached but are not a part of this Contract: 752

753

754

755

756

SIGNATURES 757

758

Buyer’s Name: Buyer’s Name:

Buyer’s Signature Date Buyer’s Signature Date

Address: Address:

Phone No.: Phone No.:

Fax No.: Fax No.:

Email Address: Email Address:

[NOTE: If this offer is being countered or rejected, do not sign this document. Refer to § 32] 759

Seller’s Name: Seller’s Name:

Juliet Byers

1560 Broadway

303-555-1103

720-555-1103

[email protected]

Romeo Sellers

None

None

None



Bruce

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Bruce

Pencil


Seller’s Signature Date Seller’s Signature Date

Address: Address:


Fax No.: Fax No.:


760

32. COUNTER; REJECTION. This offer is Countered Rejected. 761

Initials only of party (Buyer or Seller) who countered or rejected offer 762

END OF CONTRACT TO BUY AND SELL REAL ESTATE 763

33. BROKER’S ACKNOWLEDGMENTS AND COMPENSATION DISCLOSURE.

(To be completed by Broker working with Buyer)

Broker Does Does Not acknowledge receipt of Earnest Money deposit and, while not a party to the Contract, agrees to

cooperate upon request with any mediation concluded under § 23. Broker agrees that if Brokerage Firm is the Earnest Money

Holder and, except as provided in § 24, if the Earnest Money has not already been returned following receipt of a Notice to

Terminate or other written notice of termination, Earnest Money Holder will release the Earnest Money as directed by the written

mutual instructions. Such release of Earnest Money will be made within five days of Earnest Money Holder’s receipt of the

executed written mutual instructions, provided the Earnest Money check has cleared.

Broker is working with Buyer as a Buyer’s Agent Seller’s Agent Transaction-Broker in this transaction.

This is a Change of Status.

Brokerage Firm’s compensation or commission is to be paid by Listing Brokerage Firm Buyer Other .

Brokerage Firm’s Name:

Broker’s Name:

Broker’s Signature Date

Address:

Phone No.:

Fax No.:

Email Address:


(To be completed by Broker working with Seller)







Broker is working with Seller as a Seller’s Agent Buyer’s Agent Transaction-Broker in this transaction.


Brokerage Firm’s compensation or commission is to be paid by Seller Buyer Other .

1234 Midsummer St., Denver, CO 80200

303-555-0916

720-555-0016

[email protected]

Awesome Realty, Inc

Sally B. Roker

Denver, CO 80200

303-555-1212

720-555-1212

[email protected]

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1313 Mockingbird Ln., Ste. 13

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Bruce

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Bruce

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Bruce

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Bruce

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Broker’s Name:


Address:

Phone No.:

Fax No.:

Email Address:

764

Douglas Real Estate

Saul Issay Gent

2305 Isabel Blvd.

Arvada, CO 80003

303-555-0203

720-555-0203

[email protected]



Bruce

Pencil

Bruce

Pencil

SELLER: ROMEO SELLERSBUYER: JULIET BYERS

CLOSING PROBLEM #2- SALE WITH NEW LOAN -

ADDRESS: 1234 MIDSUMMER ST.NEW LENDER: DIRECTORS MTG.

SELLER BUYER BROKER (Disbursement)Description DEBIT CREDIT DEBIT CREDIT DEBIT (In) CREDIT (Out)

1 Selling Price2 Deposit 3 New Loan - Directors Mtg.5 Payoff - Countrywide7 Title Insurance - Owner's8 Title Insurance - Lender's9 Endorsements-8.1&100

11 Recording: Warranty Deed12 Trust Deed (New Ln)13 Release (Paid off Ln)15 Documentary Fee16 Cert. Of Taxes Due17 Taxes for Preceding Year18 Taxes for Current Year19 Tax Reserve20 Tax Service Fee24 Hazard Ins. Reserve

2 months @ $43.3326 Mtg. Ins. Reserve

2 months @ $72.8228 Interest on New Loan

5/15 - 6/1 @ $30.74531 Appraisal Fee32 Credit Report33 Loan Charge - Wire Fee34 Loan Charge - Flood Cert.36 Broker's Fee-Awesome Rlty36 Broker's Fee-Douglas Rlty38 Closing Fee ____________ ______________________________________________ ___________

SUBTOTALS ____________ ___________ ___________ ___________ __________ ___________DUE TO/FROM SELLER ____________ ___________ ___________ ___________ __________ ___________DUE TO/FROM BUYER ____________ ___________________________________ __________ ___________

TOTALS



SELLER: ROMEO SELLERSBUYER: JULIET BYERS

CLOSING PROBLEM #2- SALE WITH NEW LOAN -

ANSWER KEY

ADDRESS: 1234 MIDSUMMER ST.NEW LENDER: DIRECTORS MTG.


1 Selling Price 126,000 126,0002 Deposit 2,000 2,0003 New Loan - Directors Mtg. 119,700.00 $118,061.785 Payoff - Countrywide 82,841.17 82,841.177 Title Insurance - Owner's 425.00 $425.008 Title Insurance - Lender's $75.00 75.009 Endorsements-8.1&100 $50.00 $50.00

11 Recording: Warranty Deed $5.00 $5.0012 Trust Deed (New Ln) $25.00 $25.0013 Release (Paid off Ln) $13.00 $13.0015 Documentary Fee $12.60 $12.6016 Cert. Of Taxes Due $15.00 $15.0017 Taxes for Prior Year - PAID18 Taxes for Current Year

($1,041.50) 134d @ $2.8536 $382.38 $382.3819 Tax Reserve - 5 mo @ $86.80 $434.00 …….20 Tax Service Fee $70.00 …….24 Hazard Ins. Reserve $86.66 …….

2 months @ $43.3326 Mtg. Ins. Reserve $145.64 …….

2 months @ $72.8228 Interest on New Loan $491.92 …….

5/15 - 6/1 @ $30.745 31 Appraisal Fee $300.00 …….32 Credit Report $60.00 …….33 Loan Charge - Wire Fee $25.00 …….34 Loan Charge - Flood Cert. $25.00 …….36 Broker's Fee-Awesome Rlty $3,528.00 $3,528.0036 Broker's Fee-Douglas Rlty $3,528.00 $3,528.0038 Closing Fee $60.00 ____________ $60.00 ________________________ $120.00

SUBTOTALS $90,777.55 $126,000.00 $127,880.82 $122,082.38 $120,061.78 $90,637.77DUE TO/FROM SELLER $35,222.45 ___________ ___________ ___________ ____________ $35,222.45DUE TO/FROM BUYER ____________ ________________________ $5,798.44 $5,798.44 ____________TOTALS $126,000.00 $126,000.00 $127,880.82 $127,880.82 $125,860.22 $125,860.22





Projected Payments

Loan Terms

CLOSING DISCLOSURE PAGE 1 OF 5 • LOAN ID # 0000000000

Payment Calculation

Principal & Interest

Mortgage Insurance

Estimated EscrowAmount can increase over time

Estimated Total Monthly Payment

Estimated Taxes, Insurance & AssessmentsAmount can increase over timeSee page 4 for details See Escrow Account on page 4 for details. You must pay for other property

costs separately.

This estimate includes In escrow? Property Taxes Homeowner’s Insurance Other:

Can this amount increase after closing?

Loan Amount

Interest Rate

Monthly Principal & InterestSee Projected Payments below for your Estimated Total Monthly Payment

Does the loan have these features?

Prepayment Penalty

Balloon Payment

Closing Costs Includes $5,877.00 in Loan Costs + $7,642.43 in Other Costs – $0 in Lender Credits. See page 2 for details.

Cash to Close Includes Closing Costs. See Calculating Cash to Close on page 3 for details.

Costs at Closing

Transaction InformationBorrower Seller Lender

Loan InformationLoan Term Purpose Product Loan Type Conventional FHA

VA _____________Loan ID # MIC #

Closing InformationDate Issued Closing Date Disbursement Date Settlement Agent File # Property Sale Price

This form is a statement of final loan terms and closing costs. Compare this document with your Loan Estimate.Closing Disclosure



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5/15/20xxJuliet Byers30 years 5/15/20xx1560 BroadwayPurchase 5/18/20xxDenver, CO 80203Fixed Rate

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Misty Title Co.Romeo Sellers X 12-34561234 Midsummer St. 1234 Midsummer St.Directors Mtg 123456789 $126,000 000654321

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NO

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$ 304.65

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YES YES ---

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$1,880.32 $680.00 $1200.32 N/A $5,798.44

Loan Costs


Borrower-Paid Seller-Paid Paid by OthersAt Closing Before Closing At Closing Before Closing

A. Origination Charges 01 % of Loan Amount (Points)02 03 04 05 06 07 08 B. Services Borrower Did Not Shop For 01 02 03 04 05 06 07 08 09 10 C. Services Borrower Did Shop For 01 02 03 04 05 06 07 08 D. TOTAL LOAN COSTS (Borrower-Paid)Loan Costs Subtotals (A + B + C)

J. TOTAL CLOSING COSTS (Borrower-Paid)Closing Costs Subtotals (D + I)Lender Credits

Closing Cost Details

E. Taxes and Other Government Fees 01 Recording Fees Deed: Mortgage: 02 F. Prepaids 01 Homeowner’s Insurance Premium ( mo.) 02 Mortgage Insurance Premium ( mo.)03 Prepaid Interest ( per day from to )04 Property Taxes ( mo.)05 G. Initial Escrow Payment at Closing 01 Homeowner’s Insurance per month for mo.02 Mortgage Insurance per month for mo.03 Property Taxes per month for mo.04 05 06 07 08 Aggregate AdjustmentH. Other01 02 03 04 05 06 07 08 I. TOTAL OTHER COSTS (Borrower-Paid)Other Costs Subtotals (E + F + G + H)

Other Costs



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$ 95.00 Processing Fee $ 70.00 Wire Fee $ 25.00 $ 400.00 Appraisal Fee $300.00 Credit Report Fee $ 60.00 Flood Determination Report $ 25.00 Tax Certificate $ 15.00 $ 185.00 Title - Owners Title Ins. $ 425.00 Title - Lenders Title Ins. $ 75.00 Title - Endorsements 8.1, 100 $ 50.00 Title - Closing Fee (Sale) $ 60.00 $ 60.00

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$ 680.00

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$680.00

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$ 42.60

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Rel. $13 $5 $25 $ 30.00

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Documentary Fee $ 12.60 $491.42 30.74 5/15 6/1 $491.42

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$666.30

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86.60 1 86.66

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145.64 1 145.64

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72.35 6 434.00

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Real Estate Commission$7056.00 $1,200.32

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$1,200.32

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$1,880.32 $1,880.32$7,056.00

Calculating Cash to Close

BORROWER’S TRANSACTION

K. Due from Borrower at Closing

01 Sale Price of Property 02 Sale Price of Any Personal Property Included in Sale03 Closing Costs Paid at Closing (J) 04 Adjustments05 0607Adjustments for Items Paid by Seller in Advance08 City/Town Taxes to 09 County Taxes to10 Assessments to11 12 131415

L. Paid Already by or on Behalf of Borrower at Closing 01 Deposit 02 Loan Amount 03 Existing Loan(s) Assumed or Taken Subject to04 05 Seller Credit Other Credits0607 Adjustments0809 10 11 Adjustments for Items Unpaid by Seller12 City/Town Taxes to 13 County Taxes to 14 Assessments to15 1617

CALCULATION

Total Due from Borrower at Closing (K) Total Paid Already by or on Behalf of Borrower at Closing (L)

Cash to Close From To Borrower

SELLER’S TRANSACTION

M. Due to Seller at Closing

01 Sale Price of Property 02 Sale Price of Any Personal Property Included in Sale03 04 05 06 07 08Adjustments for Items Paid by Seller in Advance09 City/Town Taxes to 10 County Taxes to11 Assessments to12 13141516

N. Due from Seller at Closing 01 Excess Deposit02 Closing Costs Paid at Closing (J) 03 Existing Loan(s) Assumed or Taken Subject to04 Payoff of First Mortgage Loan 05 Payoff of Second Mortgage Loan06 07 08 Seller Credit 09 10111213Adjustments for Items Unpaid by Seller14 City/Town Taxes to 15 County Taxes to 16 Assessments to17 1819

CALCULATION

Total Due to Seller at Closing (M) Total Due from Seller at Closing (N)

Cash From To Seller

Summaries of Transactions


Loan Estimate Final Did this change?

Total Closing Costs (J)

Closing Costs Paid Before Closing

Closing Costs Financed (Paid from your Loan Amount)

Down Payment/Funds from Borrower

Deposit

Funds for Borrower

Seller Credits

Adjustments and Other Credits

Cash to Close

Use this table to see a summary of your transaction.

Use this table to see what has changed from your Loan Estimate.



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$1800.00 1880.32YES $0 $0 NO $0 $0 NO $12600 $12600 NO -$2000 -$2000 NO $0 $0 NO $0 $0 NO $0 -$6681.88YES $12,400 $5,798.44 $127,880.82 $126,000.00 $126,000.00 $126,000.00 $ 1,880.82 $ 2,000.00 $119,700.00 $ 7,554.00

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$ 82,841.17

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1/1 5/15 $ 382.38 1/1 5/15 382.38 $127.880.82 $126,000.00 $122,082.38 $ 90,777.55

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XX $ 5,798.44 XX $ 35,222.45

AssumptionIf you sell or transfer this property to another person, your lender

will allow, under certain conditions, this person to assume this loan on the original terms.

will not allow assumption of this loan on the original terms.

Demand FeatureYour loan

has a demand feature, which permits your lender to require early repayment of the loan. You should review your note for details.

does not have a demand feature.

Late PaymentIf your payment is more than ___ days late, your lender will charge a late fee of ________________________________________________

Negative Amortization (Increase in Loan Amount)Under your loan terms, you

are scheduled to make monthly payments that do not pay all of the interest due that month. As a result, your loan amount will increase (negatively amortize), and your loan amount will likely become larger than your original loan amount. Increases in your loan amount lower the equity you have in this property.

may have monthly payments that do not pay all of the interest due that month. If you do, your loan amount will increase (negatively amortize), and, as a result, your loan amount may become larger than your original loan amount. Increases in your loan amount lower the equity you have in this property.

do not have a negative amortization feature.

Partial PaymentsYour lender

may accept payments that are less than the full amount due (partial payments) and apply them to your loan.

may hold them in a separate account until you pay the rest of the payment, and then apply the full payment to your loan.

does not accept any partial payments.If this loan is sold, your new lender may have a different policy.

Security InterestYou are granting a security interest in

You may lose this property if you do not make your payments or satisfy other obligations for this loan.


Loan Disclosures

Escrow AccountFor now, your loan

will have an escrow account (also called an “impound” or “trust” account) to pay the property costs listed below. Without an escrow account, you would pay them directly, possibly in one or two large payments a year. Your lender may be liable for penalties and interest for failing to make a payment.

Escrow

Escrowed Property Costs over Year 1

Estimated total amount over year 1 for your escrowed property costs:

Non-Escrowed Property Costs over Year 1

Estimated total amount over year 1 for your non-escrowed property costs:

You may have other property costs.

Initial Escrow Payment

A cushion for the escrow account you pay at closing. See Section G on page 2.

Monthly Escrow Payment

The amount included in your total monthly payment.

No Escrow

Estimated Property Costs over Year 1

Estimated total amount over year 1. You must pay these costs directly, possibly in one or two large payments a year.

Escrow Waiver Fee

will not have an escrow account because you declined it your lender does not offer one. You must directly pay your property costs, such as taxes and homeowner’s insurance. Contact your lender to ask if your loan can have an escrow account.

In the future, Your property costs may change and, as a result, your escrow pay-ment may change. You may be able to cancel your escrow account, but if you do, you must pay your property costs directly. If you fail to pay your property taxes, your state or local government may (1) impose fines and penalties or (2) place a tax lien on this property. If you fail to pay any of your property costs, your lender may (1) add the amounts to your loan balance, (2) add an escrow account to your loan, or (3) require you to pay for property insurance that the lender buys on your behalf, which likely would cost more and provide fewer benefits than what you could buy on your own.

Additional Information About This LoanMacIntosh Real Estate School Closings Course


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XX

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XX

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XX

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$1907.40 $ 0.00 $666.30 $158.95

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XX XX 1234 Midsummer St. Arvada, CO 80200

Contact Information

Other Disclosures

Confirm Receipt

By signing, you are only confirming that you have received this form. You do not have to accept this loan because you have signed or received this form.

Applicant Signature Date Co-Applicant Signature Date


Total of Payments. Total you will have paid after you make all payments of principal, interest, mortgage insurance, and loan costs, as scheduled.

Finance Charge. The dollar amount the loan will cost you.

Amount Financed. The loan amount available after paying your upfront finance charge.

Annual Percentage Rate (APR). Your costs over the loan term expressed as a rate. This is not your interest rate.

Total Interest Percentage (TIP). The total amount of interest that you will pay over the loan term as a percentage of your loan amount.

Loan Calculations

?Lender Mortgage Broker Real Estate Broker (B) Real Estate Broker (S) Settlement Agent

Name Ficus Bank FRIENDLY MORTGAGE BROKER INC.

RELIABLE REALTY CO. REALTY PROS ABC Settlement

Address 4321 Raven Blvd.Somecity, MD 54321

1234 Terrapin Dr.Somecity, MD 54321

1776 Chesapeake St.Ste 405Anytown, MD 12345

3456 Oriole Ave. Anytown, MD 12345

5432 Free State Blvd. Ste 405Somecity, MD 54321

NMLS ID 111111 222222

License ID

Contact Joe Smith JIM TAYLOR KELLY GREEN STEVE WALSH NANCY WILSON

Contact NMLS ID 487493 394784

Contact License ID

Email [email protected]

JTAYLOR@ FRNDLYMTGBRKR.CO

[email protected]

[email protected]

NWILSON@ ABCSETTLEMENT.COM

Phone 111-222-3333 333-444-5555 444-555-6666 555-666-7777 666-777-8888

?

AppraisalIf the property was appraised for your loan, your lender is required to give you a copy at no additional cost at least 3 days before closing. If you have not yet received it, please contact your lender at the information listed below.

Contract DetailsSee your note and security instrument for information about

• what happens if you fail to make your payments, • what is a default on the loan,• situations in which your lender can require early repayment of the

loan, and • the rules for making payments before they are due.

Liability after ForeclosureIf your lender forecloses on this property and the foreclosure does notcover the amount of unpaid balance on this loan,

state law may protect you from liability for the unpaid balance. If you refinance or take on any additional debt on this property, you may lose this protection and have to pay any debt remaining even after foreclosure. You may want to consult a lawyer for more information.

state law does not protect you from liability for the unpaid balance.

RefinanceRefinancing this loan will depend on your future financial situation, the property value, and market conditions. You may not be able to refinance this loan.

Tax DeductionsIf you borrow more than this property is worth, the interest on the loan amount above this property’s fair market value is not deductible from your federal income taxes. You should consult a tax advisor for more information.

Questions? If you have questions about the loan terms or costs on this form, use the contact information below. To get more information or make a complaint, contact the Consumer Financial Protection Bureau at www.consumerfinance.gov/mortgage-closing?



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$215,040 $138,240 $ 76,800 10.25% 55.55%

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DirectorsDouglas Awesome Title Company Mortgage Co.Real Estate Realty 716 Anywhere2305 Isabel 1313 Mockingbird 123 Commerce Cityton, NY Arvada, CO Denver, CODenver, CO

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CO 2765416261456261616 Sam Wise Saul Isay Gent Sally B. Roker 12345 CO P16415P51461PT1234 samwise@ sigent@douglas sBroker@ mortgageco.com realestate.net awesomerealty.com 303-456-7890 303-555-0203 303-555-1212

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NTD 81-10-06. PROMISSORY NOTE Page 1 of 2

The printed portions of this form, except differentiated additions, have been approved by the Colorado Real Estate Commission. 1 (NTD81-10-06) (Mandatory 1-07) 2 3 IF THIS FORM IS USED IN A CONSUMER CREDIT TRANSACTION, CONSULT LEGAL COUNSEL. 4 THIS IS A LEGAL INSTRUMENT. IF NOT UNDERSTOOD, LEGAL, TAX OR OTHER COUNSEL SHOULD BE CONSULTED 5 BEFORE SIGNING. 6

7 PROMISSORY NOTE 8

9 U.S. $ _____________________ ___________________________, 10 Colorado 11

12 Date: _______________________________ 13

14

15 1. FOR VALUE RECEIVED, the undersigned (Borrower) promise(s) to pay 16 __________________________________________ (Note Holder) or order, the principal sum of 17 ____________________________________________________________ Dollars, with interest on the unpaid principal 18 balance from ______________________, until paid, at the rate of _______ percent per annum. Principal and interest shall be 19 payable at _______________________________________________, or such other place as Note Holder may designate, in 20 _______ payments of __________________________________________________ Dollars (U.S. $ _____________), due on 21 the ____ day of each __________, beginning _____________________. Such payments shall continue until the entire 22 indebtedness evidenced by this Note is fully paid; provided, however, if not sooner paid, the entire principal amount 23 outstanding and accrued interest thereon, shall be due and payable on _______________________. 24

25 26 27 28

2. Borrower shall pay to Note Holder a late charge of _____ % of any payment not received by Note Holder within ________ 29 days after the payment is due. 30 31 3. Payments received for application to this Note shall be applied first to the payment of late charges, if any, second to the 32 payment of accrued interest at the default rate specified below, if any, third to accrued interest first specified above, and the 33 balance applied in reduction of the principal amount hereof. 34 35 4. If any payment required by this Note is not paid when due, or if any default under any Deed of Trust securing this Note 36 occurs, the entire principal amount outstanding and accrued interest thereon shall at once become due and payable at the option 37 of Note Holder (Acceleration); and the indebtedness shall bear interest at the rate of ________ percent per annum from the date 38 of default. Note Holder shall be entitled to collect all reasonable costs and expense of collection and/or suit, including, but not 39 limited to reasonable attorneys’ fees. 40 41 5. Borrower may prepay the principal amount outstanding under this Note, in whole or in part, at any time without penalty 42 except 43 44 45 46 47 48 49 Any partial prepayment shall be applied against the principal amount outstanding and shall not postpone the due date of any 50 subsequent payments or change the amount of such payments. 51 52 6. Borrower and all other makers, sureties, guarantors, and endorsers hereby waive presentment, notice of dishonor and 53 protest, and they hereby agree to any extensions of time of payment and partial payments before, at, or after maturity. This 54 Note shall be the joint and several obligation of Borrower and all other makers, sureties, guarantors and endorsers, and their 55 successors and assigns. 56 57

119,700.00 Denver

May 15, 201x

DIRECTORS MORTGAGE

ONE HUNDRED NINETEEN THOUSAND, SEVEN HUNDRED DOLLARS

MAY 15, 201X 9.375

directors mortgage address

360 ONE THOUSAND FORTY-EIGHT 1,048.00

1st month July 1, 201x

June 1, 204x

5 15

10

none ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



NTD 81-10-06. PROMISSORY NOTE Page 2 of 2

7. Any notice to Borrower provided for in this Note shall be in writing and shall be given and be effective upon (a) delivery to 58 Borrower or (b) by mailing such notice by first class U. S. mail, addressed to Borrower at Borrower’s address stated below, or 59 to such other address as Borrower may designate by notice to Note Holder. Any notice to Note Holder shall be in writing and 60 shall be given and be effective upon (a) delivery to Note Holder or (b) by mailing such notice by first class U.S. mail, to Note 61 Holder at the address stated in the first paragraph of this Note, or to such other address as Note Holder may designate by notice 62 to Borrower. 63 64 8. The indebtedness evidenced by this Note is secured by a Deed of Trust dated _______________________________, and 65 until released said Deed of Trust contains additional rights of Note Holder. Such rights may cause Acceleration of the 66 indebtedness evidenced by this Note. Reference is made to said Deed of Trust for such additional terms. Said Deed of Trust 67 grants rights in the following legally described property located in the __________ County of ________________________, 68 State of Colorado: 69 70 71 72 known as No. ________________________________________________________________________ (Property Address). 73 Street Address City State Zip 74 75 76

(CAUTION: SIGN ORIGINAL NOTE ONLY/RETAIN COPY) 77 78 79 IF BORROWER IS NATURAL PERSON(S): 80 81 ___________________________________ ___________________________________________________ 82 83 ___________________________________ doing business as ____________________________________ 84 85 IF BORROWER IS CORPORATION: 86 87 ATTEST: ___________________________________________________ 88 Name of Corporation 89 90 __________________________________ By _________________________________________________ 91 Secretary President 92 93 (SEAL) 94 95 IF BORROWER IS PARTNERSHIP: ____________________________________________________ 96 Name of Partnership 97 98 99 By _________________________________________________ 100 General Partner 101 102 Borrower’s address: _____________________________________________________________________________________ 103

104 __________________________________________________________________________________105 __ 106

107 108 KEEP THIS NOTE IN A SAFE PLACE. THE ORIGINAL OF THIS NOTE MUST BE EXHIBITED TO THE 109 PUBLIC TRUSTEE IN ORDER TO RELEASE A DEED OF TRUST SECURING THIS NOTE. 110 111

May 15, 201x

City and Denver

Lots 1, 2, and the North 1/2 of Lot 3, Block 28, Richard Subdivision, Filing 3


Julie Byers

1234 Midsummer St.

Denver, CO 80200

Clear Form Email Form









15th May 1x Juliet Byers1234 Midsummer St. Denver CO 80200

Directors Mortgage

Directors Mortgage address

Denver


May 15, 201x

One Hundred Nineteen Thousand Seven Hundred 119,700.00

May 15, 201x 9.375

Directors Mortgage address

360 One Thousand Forty Eight

1048.00 1st month July 1, 201x

June 1, 204x5 5

none15

none

Lots 1, 2, and the North 1/2 of Lot 3, Block 28, Richard Sub., Fil 3





1/12th

1/12th







(SEAL)






City and Denver

15th May 1xJuliet Byers

11/13/201x



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CLOSING PROBLEM #3 – ASSUMPTION WITH SELLER CARRY-BACK Please complete the following closing. In computing your figures, base your prorations on a 365-day year and exact days in each month. The closing is on June 10th of this year. Buyer owns the property the date of closing Sales Price: $89,950.00 Assume Present Loan: $68,924.60 (Balance after June 1 payment.) New 2nd Deed of Trust to Seller: $2,500.00 Last Year’s Taxes (PAID $872). This Year’s Taxes: Prorate between buyer and seller based on last year. Special Taxes: $486.00 – To be paid at closing. Abstract to date and Certification: $75.00 – To be paid at closing. Attorney’s Opinion (of abstract): $150.00 – To be paid at closing. Loan Transfer Fee: 1% of Loan – The charge for transferring loan. Tax Reserve: $363.33 – Escrow to be held. Hazard Insurance Reserve: $595.83 – Escrow to be held. Current Hazard Insurance (to be prorated): $650.00 (9 months ago exactly, the policy was paid for 1 year by Seller.) Tax Certificate: $15.00 Record Warranty Deed: $5.00 Record Deed of Trust (2nd): $20.00 Broker’s commission: 7% Water/Sewer (to be prorated): $45.00 (Paid in advance quarterly on May 1st.) Deposit from Buyer (check): $1,500.00 Credit Report: $65.00 – To be paid at closing. Appraisal for Buyer: $300.00 – To be paid at closing. Closing fee: $75.00 – Split between Buyer & Seller Interest paid to June 1st with the June 1st payment. June interest is $15.3166 per diem (8% per annum). NOTE: When the warranty deed is recorded, a State Documentary Fee must be collected. Please compute and charge, using the normal calculation based on the sales price.



CLOSING PROBLEM #3ASSUMPTION SELLER CARRY-BACK

CLOSING DATE: 6/10/201x


1 Selling Price2 Deposit3 Trust Deed - Assumption4 Trust Deed - Payable to Slr6 Interest on Ln Assumed8 Abstracting (before sale)

10 Title Exam11 Recording: Warranty Deed12 Trust Deed (2nd)13 Release14 Other15 Documentary Fee16 Cert. Of Taxes Due17 Taxes for Preceding Year18 Taxes for Current Year19 Tax Reserve20 Special Taxes22 Hazard Ins. Prem. Assumed23 Premium for New Ins.24 Hazard Ins. Reserve29 Interest on New Loan30 Survey/Credit Report31 Appraisal Fee32 Water/Sewer33 Rents34 Security Deposits35 Loan Transfer Fee36 Loan Payment Due37 Broker's Fee

Closing Fee____________ ___________ ___________ ___________ ______________________

SUBTOTALS ____________ ___________ ___________ ___________ __________ ___________DUE TO/FROM SELLER ____________ ___________ ___________ ___________ __________ ___________DUE TO/FROM BUYER ____________ ___________________________________ __________ ___________

TOTALS



ANSWER SHEET CLOSING PROBLEM #3ASSUMPTION / SELLER CARRY-BACK

CLOSING DATE: 6/10/201x

SELLER BUYER BROKER (Disbursmt) (calculation notes)Description DEBIT CREDIT DEBIT CREDIT DEBIT (In) CREDIT (Out)

1 Selling Price $89,950.00 $89,950.002 Deposit $1,500.00 $1,500.003 Trust Deed - Assumption $68,924.60 $68,924.604 Trust Deed - Payable to Slr $2,500.00 $2,500.006 Interest on Ln Assumed $137.85 $137.858 Abstracting (before sale) $75.00 $75.00

10 Title Exam $150.00 $150.0011 Recording: Warranty Deed $5.00 $5.0012 Trust Deed (2nd) $20.00 $20.0013 Release14 Other15 Documentary Fee $9.00 $9.0016 Cert. Of Taxes Due $15.00 $15.0017 Taxes for Prior Yr: PAID $87218 Taxes for Current Year $382.25 $382.25 ($2.389 x 160 days)19 Tax Reserve $363.33 $363.3320 Special Taxes $486.00 $486.0022 Hazard Ins. Prem. Assumed $162.50 $162.50 (650/12=$54.1667x3)23 Premium for New Ins.24 Hazard Ins. Reserve $595.83 $595.8329 Interest on New Loan30 Survey/Credit Report $65.00 $65.0031 Appraisal Fee $300.00 $300.0032 Water/Sewer $25.43 $25.43 (45/92=$0.4891 x 52)33 Rents34 Security Deposits35 Loan Transfer Fee - 1% $689.25 $689.2536 Loan Payment Due37 Broker's Fee - 7% $6,296.50 $6,296.50

Closing Fee $37.50 $37.50 $75.00____________ ___________ ___________ ___________ ______________________

SUBTOTALS $78,839.70 $91,097.09 $92,387.84 $73,444.70 $1,500.00 $8,185.75DUE TO/FROM SELLER $12,257.39 $12,257.39DUE TO/FROM BUYER ____________ ________________________ $18,943.14 $18,943.14 ___________

TOTALS $91,097.09 $91,097.09 $92,387.84 $92,387.84 $20,443.14 $20,443.14












CLOSING PROBLEM #4 - SALE WITH NEW LOAN The sales contract you have in front of you pertains to property located at 825 Randolph St., Lakewood, CO 80226. (The legal description is Lot 5, Block 4 Green Wood Subdivision, County of Jefferson, State of Colorado.) The property is owned by Sam O. Blue and Samantha S. Blue. The purchasers are Robert B. Brown and his wife Ruth Ann. The agreed-upon purchase price is $95,000 and the closing date is August 20th of this year (Which happens to be a leap year!). The buyers have previously given you an earnest money Deposit of $500.00 – as the broker, you must bring it to closing and credit the buyers for it. The terms of the contract state that the purchasers are to pay for the property by obtaining a new conventional loan in the amount of 80% of the sales price at 7.5% interest amortized over 30 years, and the payment is to be a P.I.T.I. payment payable to Acoma Mortgage Company. You have also procured a tax certificate showing that the taxes for last year were $960.60, and contrary to the usual situation have not yet been paid. Prorate the current year’s charge against the seller based on last year’s taxes and the actual number of days in each month until closing. There is also a balance on special assessments due in the amount of $1,850.85. Upon examining the contract you find that the sellers have agreed to pay these at the time of closing. The payoff statement from the sellers’ present loan company indicates that the principal balance of the loan after the August 1 payment was made is $63,470.46. As per usual, the principal balance of the seller’s loan must be paid off, as well as a per diem (daily) interest charge of $13.87 per day through closing… and although the title company will Express Mail the payoff to the loan company right after closing, it will not arrive for a couple of days, and then may take a day or two for them to credit the payoff to the Seller’s account. So, make sure to build in an extra seven days of interest to the payoff, (for a total of 27 days) because if the payoff is even one dollar short, the loan company will not credit the payoff and will send it back to the title company… (unfair, but true!) Any excess of per



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diem interest will later be sent back to the sellers, so they won’t be out any money by “over”-collecting the payoff interest per diem. Among the mass of papers on your desk are a title insurance commitment, and the sales contract, showing the following charges that must be paid: Title Insurance - Owners policy: $657.00 Title Insurance - Lender’s policy: $75.00 Recording fees @ $5.00 per page - a one-page warranty deed - a six-page deed of trust Documentary Fee based on the sales price Record a Release of seller’s paid-off loan: $13.00 Certificate of Taxes Due: $15.00 Closing fee: Total $100.00 (to be shared equally between buyer and seller.)

Commission to your brokerage equals 7% of the sales price. New Hazard Insurance Premium in the amount of $240.00 Survey: $250.00. Credit Report: $70.00 Appraisal Fee: $350.00 The buyer’s new lender will charge the following loan fees. Please NET OUT these fees marked with an * from the total loan amount, as it would be silly for the lender to fund the entire loan amount and then have the title company cut them back a check for the fees. All others will be PAID OUT. *Tax Reserve: 9 months @ $80.05 per month *Hazard Insurance: 2 months @ $20.00 per month *Origination fee: 1% of loan amount *Discount fee: 2 points of loan amount (NOTE: Seller has generously agreed to pay this fee at closing.) *Interest on new loan: 12 days @ $14.3175 per diem * Wire fee (for wiring the loan proceeds to title company): $32.00 * Document Preparation fee: $150.00 * Tax Service Fee: $69.00.



Bruce

Q&A


SELLERS: Sam O. and Samantha S. BlueBUYERS: Robert B. and Ruth Ann Brown

CLOSING PROBLEM #4SALE WITH NEW LOAN

WORKSHEET

CLOSING DATE : August 20, 201x


A Selling PriceB Deposit C Trust Deed - New LoanD Payoff - Bank NoteE Title Ins. PremiumsF Recording: Warranty DeedG Trust DeedH ReleaseI Documentary FeeJ Cert. Of Taxes DueK Taxes for Preceding YearL Taxes for Current YearM Tax ReserveN Special TaxesO Loan Charge - Tax Svc FeeP Hazard Insurance PremiumQ Hazard Ins. ReserveR Loan Charge - Doc Prep FeeS Loan Charge - Origination FeeT Loan Discount Fee (Seller)U Interest on New LoanV Survey/Credit ReportW Appraisal FeeX Loan Charge - Wire FeeY Closing FeeZ Broker's Fee

______________ ______________ _____________ _____________ _____________ _____________SUBTOTALS ______________ ______________ _____________ _____________ _____________ _____________DUE TO/FROM SELLER ______________ ______________ _____________ _____________ _____________ _____________DUE TO/FROM BUYER ______________ ______________ _____________ _____________ _____________ _____________

TOTALS



SELLERS: Sam O. and Samantha S. BlueBUYERS: Robert B. and Ruth Ann Brown

CLOSING PROBLEM #4SALE WITH NEW LOAN

WORKSHEET

CLOSING DATE : August 20, 201x

SELLER BUYER BROKER (Disbursmt) (calculation notes)Description DEBIT CREDIT DEBIT CREDIT DEBIT (In) CREDIT (Out)

A Selling Price $95,000.00 $95,000.00B Deposit $500.00 $500.00C Trust Deed - New Loan $76,000.00 $72,536.74D Payoff - Bank Note $63,844.95 $63,844.95 ($63,470.46 x 8% =E Title Ins. Premiums $657.00 $75.00 $732.00 $5,077.6368 / 366 =F Recording: Warranty Deed $5.00 $5.00 $13.87 x 27 days =G Trust Deed $30.00 $30.00 $374.49 + $63,470.46)H Release $13.00 $13.00I Documentary Fee $9.50 $9.50J Cert. Of Taxes Due $15.00 $15.00K Taxes for Preceding Year $960.60 $960.60L Taxes for Current Year $610.16 $610.16 ($960.60 / 366 =M Tax Reserve $720.45 ……. $2.63 x 232 days)N Special Taxes $1,850.85 $1,850.85O Loan Charge - Tax Svc Fee $69.00 …….P Hazard Insurance Premium $240.00 $240.00Q Hazard Ins. Reserve $40.00 …….R Loan Chg - Doc Prep Fee $150.00 …….S Loan Chg - Origination Fee $760.00 …….T Loan Discount Fee (Seller) $1,520.00 ……. ($76,000 x .02 -"2 pts")U Interest on New Loan $171.81 ……. (12 days xV Survey/Credit Report $320.00 $320.00 $14.3175 per day)W Appraisal Fee $350.00 $350.00X Loan Charge - Wire Fee $32.00 ……. (NOTE for interest,Y Closing Fee $50.00 $50.00 $100 lenders rarely useZ Broker's Fee $6,650.00 $6,650.00 calc based on 366 d)

___________ ___________________________________________ __________SUBTOTALS $76,156.56 $95,000.00 $98,037.76 $77,110.16 $73,036.74 $75,120.90DUE TO/FROM SELLER $18,843.44 $18,843.44DUE TO/FROM BUYER ___________ ______________________$20,927.60 $20,927.60 __________

TOTALS $95,000.00 $95,000.00 $98,037.76 $98,037.76 $93,964.34 $93,964.34





CLOSING PROBLEM #5 (PREPARATION FOR FIRST SECTION OF CLOSING EXAM)

McDougal to Smith – Listing Contract On February 2nd, you secure the agreement of Alonzo and Alice McDougal to list their house at 825 Marble, Denver, Colorado, with your company, Awesome Realty, Inc. The listing will be for a 90-day period, and will pay a 6% commission. Having done your homework in advance, you have secured enough comparable sales that you are confident that the McDougal’s property should sell around $105,500. The McDougals are agreeable to that price. They are willing to sell the house for cash or let a potential purchaser assume the present loan with Pacific Loan Company, which has a principal balance of $74,874.00. It is an FHA loan that was issued on February 10th, 2005. It bears an interest rate of 8 ½%, and has a due date of 2035 A.D. The PITI payment is $975 per month. The McDougals prefer to receive cash for the difference, but will agree to carry back a note not to exceed $10,000, amortized over a five-year period with interest at 10%. They are hesitant to do this, as they had a friend who sold his house by this method, but had to foreclose on the second deed of trust after his buyers sold to another party, who didn’t pay off that second deed of trust. They insist you write a provision in the listing contract that will protect them against this possibility. You agree to do this. After you explain the possible difficulties of finding buyers with the necessary amount of money this method would require, the McDougals agree that they will allow a potential purchaser to secure a new loan. While reading the contract, the McDougals note the portion pertaining to earnest money deposits and will not accept an amount less than 5% of the price in cash or certified funds. The McDougals agree to pay for the owners title policy upon closing.

They also intend to take the burglar alarm system with them, as well as the Venetian blinds. They also have an antique chandelier in the dining room that they wish to keep. They will leave the Kelvinator refrigerator and the G.E. washer and dryer. You raise the issue of the possibility that they might want to sell the house on a lease-option basis. They are adamant that they will not do this, but do concede that if they change their minds, they will pay a commission at the same rate as for a sale. You also tell them that if a buyer’s agent or transaction broker produces the ultimate buyer, you will split your commission, 2.8% to the other broker. Finally, the McDougals agree that they will paint the living and dining rooms and replace the carpet in the master bedroom when a binding contract is secured from acceptable buyers.




(LC50-8-13) (Mandatory 1-14) DRAFT FINAL 9-16-13 2 3 THIS IS A BINDING CONTRACT. THIS FORM HAS IMPORTANT LEGAL CONSEQUENCES AND THE PARTIES SHOULD 4 CONSULT LEGAL AND TAX OR OTHER COUNSEL BEFORE SIGNING. 5

Compensation charged by brokerage firms is not set by law. Such charges are established by each real estate brokerage firm. 6

DIFFERENT BROKERAGE RELATIONSHIPS ARE AVAILABLE WHICH INCLUDE BUYER AGENCY, SELLER AGENCY, OR 7 TRANSACTION-BROKERAGE. 8 9

EXCLUSIVE RIGHT-TO-SELL LISTING CONTRACT 10

SELLER AGENCY TRANSACTION-BROKERAGE 11 12 Date: 13

1. AGREEMENT. Seller and Brokerage Firm enter into this exclusive, irrevocable contract (Seller Listing Contract) and agree 14 to its provisions. Broker, on behalf of Brokerage Firm, agrees to provide brokerage services to Seller. Seller agrees to pay 15 Brokerage Firm as set forth in this Seller Listing Contract. 16

2. BROKER AND BROKERAGE FIRM. 17 2.1. Multiple-Person Firm. If this box is checked, the individual designated by Brokerage Firm to serve as the broker of 18

Seller and to perform the services for Seller required by this Seller Listing Contract is called Broker. If more than one individual is 19 so designated, then references in this Seller Listing Contract to Broker include all persons so designated, including substitute or 20 additional brokers. The brokerage relationship exists only with Broker and does not extend to the employing broker, Brokerage 21 Firm or to any other brokers employed or engaged by Brokerage Firm who are not so designated. 22

2.2. One-Person Firm. If this box is checked, Broker is a real estate brokerage firm with only one licensed natural person. 23 References in this Seller Listing Contract to Broker or Brokerage Firm mean both the licensed natural person and brokerage firm 24 who serve as the broker of Seller and perform the services for Seller required by this Seller Listing Contract. 25

3. DEFINED TERMS. 26 3.1. Seller: 27

3.2. Brokerage Firm: 28

3.3. Broker: 29

3.4. Property. The Property is the following legally described real estate in the County of , Colorado: 30 31 32 33 known as No. , 34 Street Address City State Zip 35

together with the interests, easements, rights, benefits, improvements and attached fixtures appurtenant thereto, and all interest of 36 Seller in vacated streets and alleys adjacent thereto, except as herein excluded. 37 3.5. Sale; Lease. 38 3.5.1. A Sale is the voluntary transfer or exchange of any interest in the Property or the voluntary creation of the 39 obligation to convey any interest in the Property, including a contract or lease. It also includes an agreement to transfer any 40 ownership interest in an entity which owns the Property. 41 3.5.2. If this box is checked, Seller authorizes Broker to negotiate leasing the Property. Lease of the Property or 42 Lease means any agreement between the Seller and a tenant to create a tenancy or leasehold interest in the Property. 43 3.6. Listing Period. The Listing Period of this Seller Listing Contract begins on , and 44 continues through the earlier of (1) completion of the Sale of the Property or (2) , and 45 any written extensions (Listing Period). Broker must continue to assist in the completion of any Sale or Lease for which 46 compensation is payable to Brokerage Firm under § 7 of this Seller Listing Contract. 47 3.7. Applicability of Terms. A check or similar mark in a box means that such provision is applicable. The abbreviation 48 “N/A” or the word “Deleted” means not applicable. The abbreviation “MEC” (mutual execution of this contract) means the date upon 49 which both parties have signed this Seller Listing Contract. 50



Bruce

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3.8. Day; Computation of Period of Days, Deadline. 51 3.8.1. Day. As used in this Seller Listing Contract, the term “day” means the entire day ending at 11:59 p.m., United 52 States Mountain Time (Standard or Daylight Savings as applicable). 53 3.8.2. Computation of Period of Days, Deadline. In computing a period of days, when the ending date is not 54 specified, the first day is excluded and the last day is included, e.g., three days after MEC. If any deadline falls on a Saturday, 55 Sunday or federal or Colorado state holiday (Holiday), such deadline Will Will Not be extended to the next day that is not 56 a Saturday, Sunday or Holiday. Should neither box be checked, the deadline will not be extended. 57

4. BROKERAGE RELATIONSHIP. 58 4.1. If the Seller Agency box at the top of page 1 is checked, Broker represents Seller as Seller’s limited agent (Seller’s 59 Agent). If the Transaction-Brokerage box at the top of page 1 is checked, Broker acts as a Transaction-Broker. 60 4.2. In-Company Transaction – Different Brokers. When Seller and buyer in a transaction are working with different 61 brokers, those brokers continue to conduct themselves consistent with the brokerage relationships they have established. Seller 62 acknowledges that Brokerage Firm is allowed to offer and pay compensation to brokers within Brokerage Firm working with a 63 buyer. 64 4.3. In-Company Transaction – One Broker. If Seller and buyer are both working with the same broker, Broker must 65 function as: 66 4.3.1. Seller’s Agent. If the Seller Agency box at the top of page 1 is checked, the parties agree the following applies: 67 4.3.1.1. Seller Agency Only. Unless the box in § 4.3.1.2 (Seller Agency Unless Brokerage Relationship 68 with Both) is checked, Broker represents Seller as Seller’s Agent and must treat the buyer as a customer. A customer is a party to 69 a transaction with whom Broker has no brokerage relationship. Broker must disclose to such customer Broker’s relationship with 70 Seller. 71 4.3.1.2. Seller Agency Unless Brokerage Relationship with Both. If this box is checked, Broker 72 represents Seller as Seller’s Agent and must treat the buyer as a customer, unless Broker currently has or enters into an agency or 73 Transaction-Brokerage relationship with the buyer, in which case Broker must act as a Transaction-Broker. 74 4.3.2. Transaction-Broker. If the Transaction-Brokerage box at the top of page 1 is checked, or in the event neither 75 box is checked, Broker must work with Seller as a Transaction-Broker. A Transaction-Broker must perform the duties described in 76 § 5 and facilitate sales transactions without being an advocate or agent for either party. If Seller and buyer are working with the 77 same broker, Broker must continue to function as a Transaction-Broker. 78

5. BROKERAGE DUTIES. Brokerage Firm, acting through Broker, as either a Transaction-Broker or a Seller’s Agent, must 79 perform the following Uniform Duties when working with Seller: 80 5.1. Broker must exercise reasonable skill and care for Seller, including, but not limited to the following: 81 5.1.1. Performing the terms of any written or oral agreement with Seller; 82 5.1.2. Presenting all offers to and from Seller in a timely manner regardless of whether the Property is subject to a 83 contract for Sale; 84 5.1.3. Disclosing to Seller adverse material facts actually known by Broker; 85 5.1.4. Advising Seller regarding the transaction and advising Seller to obtain expert advice as to material matters 86 about which Broker knows but the specifics of which are beyond the expertise of Broker; 87 5.1.5. Accounting in a timely manner for all money and property received; and 88 5.1.6. Keeping Seller fully informed regarding the transaction. 89 5.2. Broker must not disclose the following information without the informed consent of Seller: 90 5.2.1. That Seller is willing to accept less than the asking price for the Property; 91 5.2.2. What the motivating factors are for Seller to sell the Property; 92 5.2.3. That Seller will agree to financing terms other than those offered; 93 5.2.4. Any material information about Seller unless disclosure is required by law or failure to disclose such 94 information would constitute fraud or dishonest dealing; or 95 5.2.5. Any facts or suspicions regarding circumstances that could psychologically impact or stigmatize the Property. 96 5.3. Seller consents to Broker’s disclosure of Seller’s confidential information to the supervising broker or designee for the 97 purpose of proper supervision, provided such supervising broker or designee does not further disclose such information without 98 consent of Seller, or use such information to the detriment of Seller. 99 5.4. Brokerage Firm may have agreements with other sellers to market and sell their property. Broker may show alternative 100 properties not owned by Seller to other prospective buyers and list competing properties for sale. 101 5.5. Broker is not obligated to seek additional offers to purchase the Property while the Property is subject to a contract for 102 Sale. 103 5.6. Broker has no duty to conduct an independent inspection of the Property for the benefit of a buyer and has no duty to 104 independently verify the accuracy or completeness of statements made by Seller or independent inspectors. Broker has no duty to 105 conduct an independent investigation of a buyer’s financial condition or to verify the accuracy or completeness of any statement 106 made by a buyer. 107



5.7. Seller understands that Seller is not liable for Broker’s acts or omissions that have not been approved, directed, or 108 ratified by Seller. 109 5.8. When asked, Broker Will Will Not disclose to prospective buyers and cooperating brokers the existence of 110 offers on the Property and whether the offers were obtained by Broker, a broker within Brokerage Firm or by another broker. 111

6. ADDITIONAL DUTIES OF SELLER’S AGENT. If the Seller Agency box at the top of page 1 is checked, Broker is 112 Seller’s Agent, with the following additional duties: 113 6.1. Promoting the interests of Seller with the utmost good faith, loyalty and fidelity; 114 6.2. Seeking a price and terms that are set forth in this Seller Listing Contract; and 115 6.3. Counseling Seller as to any material benefits or risks of a transaction that are actually known by Broker. 116

7. COMPENSATION TO BROKERAGE FIRM; COMPENSATION TO COOPERATIVE BROKER. Seller agrees that 117 any Brokerage Firm compensation that is conditioned upon the Sale of the Property will be earned by Brokerage Firm as set forth 118 herein without any discount or allowance for any efforts made by Seller or by any other person in connection with the Sale of the 119 Property. 120 7.1. Amount. In consideration of the services to be performed by Broker, Seller agrees to pay Brokerage Firm as follows: 121 7.1.1. Sale Commission. (1) % of the gross purchase price or (2) , 122 in U.S. dollars. 123 7.1.2. Lease Commission. If the box in § 3.5.2 is checked, Brokerage Firm will be paid a fee equal to (1) % of 124 the gross rent under the lease, or (2) , in U.S. dollars, payable 125 as follows: . 126 7.1.3. Other Compensation. 127 7.2. Cooperative Broker Compensation. Brokerage Firm offers compensation to outside brokerage firms, whose brokers 128 are acting as: 129 Buyer Agents: % of the gross sales price or , in U.S. dollars. 130 Transaction-Brokers: % of the gross sales price or , in U.S. dollars. 131 7.3. When Earned. Such commission is earned upon the occurrence of any of the following: 132 7.3.1. Any Sale of the Property within the Listing Period by Seller, by Broker or by any other person; 133 7.3.2. Broker finding a buyer who is ready, willing and able to complete the Sale or Lease as specified in this Seller 134 Listing Contract; or 135 7.3.3. Any Sale (or Lease if § 3.5.2 is checked) of the Property within calendar days after the Listing 136 Period expires (Holdover Period) (1) to anyone with whom Broker negotiated and (2) whose name was submitted, in writing, to 137 Seller by Broker during the Listing Period (Submitted Prospect). Provided, however, Seller Will Will Not owe the 138 commission to Brokerage Firm under this § 7.3.3 if a commission is earned by another licensed real estate brokerage firm acting 139 pursuant to an exclusive agreement entered into during the Holdover Period and a Sale or Lease to a Submitted Prospect is 140 consummated. If no box is checked in this § 7.3.3, then Seller does not owe the commission to Brokerage Firm. 141 7.4. When Applicable and Payable. The commission obligation applies to a Sale made during the Listing Period or any 142 extension of such original or extended term. The commission described in § 7.1.1 is payable at the time of the closing of the Sale, 143 or, if there is no closing (due to the refusal or neglect of Seller) then on the contracted date of closing, as contemplated by § 7.3.1 144 or § 7.3.3, or upon fulfillment of § 7.3.2 where the offer made by such buyer is not accepted by Seller. 145

8. LIMITATION ON THIRD-PARTY COMPENSATION. Neither Broker nor Brokerage Firm, except as set forth in § 7, 146 will accept compensation from any other person or entity in connection with the Property without the written consent of Seller. 147 Additionally, neither Broker nor Brokerage Firm is permitted to assess or receive mark-ups or other compensation for services 148 performed by any third party or affiliated business entity unless Seller signs a separate written consent for such services. 149

9. OTHER BROKERS’ ASSISTANCE, MULTIPLE LISTING SERVICES AND MARKETING. Seller has been advised 150 by Broker of the advantages and disadvantages of various marketing methods, including advertising and the use of multiple listing 151 services (MLS) and various methods of making the Property accessible by other brokerage firms (e.g., using lock boxes, by-152 appointment-only showings, etc.) and whether some methods may limit the ability of another broker to show the Property. After 153 having been so advised, Seller has chosen the following: 154 9.1. MLS/Information Exchange. 155 9.1.1. The Property Will Will Not be submitted to one or more MLS and Will Will Not be submitted 156 to one or more property information exchanges. If submitted, Seller authorizes Broker to provide timely notice of any status 157 change to such MLS and information exchanges. Upon transfer of deed from Seller to buyer, Seller authorizes Broker to provide 158 sales information to such MLS and information exchanges. 159 9.1.2. Seller authorizes the use of electronic and all other marketing methods except: . 160 9.1.3. Seller further authorizes use of the data by MLS and property information exchanges, if any. 161 9.1.4. The Property Address Will Will Not be displayed on the Internet. 162



9.1.5. The Property Listing Will Will Not be displayed on the Internet. 163 9.2. Property Access. Access to the Property may be by: 164 Manual Lock Box Electronic Lock Box 165 166 Other instructions: 167 9.3. Broker Marketing. The following specific marketing tasks will be performed by Broker: 168 169 170 171

10. SELLER’S OBLIGATIONS TO BROKER; DISCLOSURES AND CONSENT. 172 10.1. Negotiations and Communication. Seller agrees to conduct all negotiations for the Sale of the Property only through 173 Broker, and to refer to Broker all communications received in any form from real estate brokers, prospective buyers, tenants or any 174 other source during the Listing Period of this Seller Listing Contract. 175 10.2. Advertising. Seller agrees that any advertising of the Property by Seller (e.g., Internet, print and signage) must first be 176 approved by Broker. 177 10.3. No Existing Listing Agreement. Seller represents that Seller Is Is Not currently a party to any listing 178 agreement with any other broker to sell the Property. 179 10.4. Ownership of Materials and Consent. Seller represents that all materials (including all photographs, renderings, 180 images or other creative items) supplied to Broker by or on behalf of Seller are owned by Seller, except as Seller has disclosed in 181 writing to Broker. Seller is authorized to and grants to Broker, Brokerage Firm and any MLS (that Broker submits the Property to) 182 a nonexclusive irrevocable, royalty-free license to use such material for marketing of the Property, reporting as required and the 183 publishing, display and reproduction of such material, compilation and data. This license survives the termination of this Seller 184 Listing Contract. 185 10.5. Colorado Foreclosure Protection Act. The Colorado Foreclosure Protection Act (Act) generally applies if (1) the 186 Property is residential (2) Seller resides in the Property as Seller’s principal residence (3) Buyer’s purpose in purchase of the 187 Property is not to use the Property as Buyer’s personal residence and (4) the Property is in foreclosure or Buyer has notice that any 188 loan secured by the Property is at least thirty days delinquent or in default. If all requirements 1, 2, 3 and 4 are met and the Act 189 otherwise applies, then a contract, between Buyer and Seller for the sale of the Property, that complies with the provisions of the 190 Act is required. If the transaction is a Short Sale transaction and a Short Sale Addendum is part of the Contract between Seller and 191 Buyer, the Act does not apply. It is recommended that Seller consult with an attorney. 192

11. PRICE AND TERMS. The following Price and Terms are acceptable to Seller: 193 11.1. Price. U.S. $ 194 11.2. Terms. Cash Conventional FHA VA Other: 195 11.3. Loan Discount Points. 196 11.4. Buyer’s Closing Costs (FHA/VA). Seller must pay closing costs and fees, not to exceed $ , that Buyer 197 is not allowed by law to pay, for tax service and . 198 11.5. Earnest Money. Minimum amount of earnest money deposit U.S. $ in the form of 199 11.6. Seller Proceeds. Seller will receive net proceeds of closing as indicated: Cashier’s Check at Seller’s expense; 200

Funds Electronically Transferred (Wire Transfer) to an account specified by Seller, at Seller’s expense; or Closing 201 Company’s Trust Account Check. 202 11.7. Advisory: Tax Withholding. The Internal Revenue Service and the Colorado Department of Revenue may require 203 closing company to withhold a substantial portion of the proceeds of this Sale when Seller either (1) is a foreign person or (2) will 204 not be a Colorado resident after closing. Seller should inquire of Seller’s tax advisor to determine if withholding applies or if an 205 exemption exists. 206

12. DEPOSITS. Brokerage Firm is authorized to accept earnest money deposits received by Broker pursuant to a proposed Sale 207 contract. Brokerage Firm is authorized to deliver the earnest money deposit to the closing agent, if any, at or before the closing of 208 the Sale contract. 209

13. INCLUSIONS AND EXCLUSIONS. 210 13.1. Inclusions. The Purchase Price includes the following items (Inclusions): 211 13.1.1. Fixtures. The following items are included if attached to the Property on the date of this Seller Listing 212 Contract, unless excluded under Exclusions (§ 13.2): lighting, heating, plumbing, ventilating, and air conditioning fixtures, TV 213 antennas, inside telephone, network and coaxial (cable) wiring and connecting blocks/jacks, plants, mirrors, floor coverings, 214 intercom systems, built-in kitchen appliances, sprinkler systems and controls, built-in vacuum systems (including accessories), 215 garage door openers including remote controls. 216 Other Fixtures: 217



218 219 If any fixtures are attached to the Property after the date of this Seller Listing Contract, such additional fixtures are also included in 220 the Purchase Price. 221 13.1.2. Personal Property. The following items are included if on the Property, whether attached or not, on the date 222 of this Seller Listing Contract, unless excluded under Exclusions (§ 13.2): storm windows, storm doors, window and porch shades, 223 awnings, blinds, screens, window coverings, curtain rods, drapery rods, fireplace inserts, fireplace screens, fireplace grates, heating 224 stoves, storage sheds, and all keys. If checked, the following are included: Water Softeners Smoke/Fire Detectors 225 Carbon Monoxide Alarms Security Systems Satellite Systems (including satellite dishes); and 226 227 228 The Personal Property to be conveyed at closing must be conveyed by Seller free and clear of all taxes (except personal 229 property taxes for the year of closing), liens and encumbrances, except . 230 Conveyance will be by bill of sale or other applicable legal instrument. 231 13.1.3. Trade Fixtures. The following trade fixtures are included: 232 The Trade Fixtures to be conveyed at closing must be conveyed by Seller, free and clear of all taxes (except personal property 233 taxes for the year of closing), liens and encumbrances, except . 234 Conveyance will be by bill of sale or other applicable legal instrument. 235 13.1.4. Parking and Storage Facilities. Use Only Ownership of the following parking facilities: 236 ; and Use Only Ownership of the following storage facilities: . 237 13.1.5. Water Rights. The following legally described water rights: 238 239 240 Any water rights must be conveyed by deed or other applicable legal instrument. The Well 241 Permit # is . 242 13.1.6. Growing Crops. The following growing crops: 243 244 245 13.2. Exclusions. The following are excluded (Exclusions): 246 247 248 249

14. TITLE AND ENCUMBRANCES. Seller represents to Broker that title to the Property is solely in Seller’s name. Seller 250 must deliver to Broker true copies of all relevant title materials, leases, improvement location certificates and surveys in Seller’s 251 possession and must disclose to Broker all easements, liens and other encumbrances, if any, on the Property, of which Seller has 252 knowledge. Seller authorizes the holder of any obligation secured by an encumbrance on the Property to disclose to Broker the 253 amount owing on said encumbrance and the terms thereof. In case of Sale, Seller agrees to convey, by a 254 deed, only that title Seller has in the Property. Property must be conveyed free and clear of all taxes, except the general taxes for 255 the year of closing. 256 All monetary encumbrances (such as mortgages, deeds of trust, liens, financing statements) must be paid by Seller and released 257 except as Seller and buyer may otherwise agree. Existing monetary encumbrances are as follows: . 258 The Property is subject to the following leases and tenancies: . 259 If the Property has been or will be subject to any governmental liens for special improvements installed at the time of signing 260 a Sale contract, Seller is responsible for payment of same, unless otherwise agreed. 261

15. EVIDENCE OF TITLE. Seller agrees to furnish buyer, at Seller’s expense, unless the parties agree in writing to a different 262 arrangement, a current commitment and an owner’s title insurance policy in an amount equal to the Purchase Price as specified in 263 the Sale contract, or if this box is checked, An Abstract of Title certified to a current date. 264

16. ASSOCIATION ASSESSMENTS. Seller represents that the amount of the regular owners’ association assessment is 265 currently payable at $ per and that there are no unpaid regular or special assessments against 266 the Property except the current regular assessments and except . Seller agrees to promptly 267 request the owners’ association to deliver to buyer before date of closing a current statement of assessments against the Property. 268

17. POSSESSION. Possession of the Property will be delivered to buyer as follows: , 269 subject to leases and tenancies as described in § 14. 270

18. MATERIAL DEFECTS, DISCLOSURES AND INSPECTION. 271



18.1. Broker’s Obligations. Colorado law requires a broker to disclose to any prospective buyer all adverse material facts 272 actually known by such broker including but not limited to adverse material facts pertaining to the title to the Property and the 273 physical condition of the Property, any material defects in the Property, and any environmental hazards affecting the Property which 274 are required by law to be disclosed. These types of disclosures may include such matters as structural defects, soil conditions, 275 violations of health, zoning or building laws, and nonconforming uses and zoning variances. Seller agrees that any buyer may have 276 the Property and Inclusions inspected and authorizes Broker to disclose any facts actually known by Broker about the Property. 277 18.2. Seller’s Obligations. 278 18.2.1. Seller’s Property Disclosure Form. Disclosure of known material latent (not obvious) defects is required by 279 law. Seller Agrees Does Not Agree to provide a Seller’s Property Disclosure form completed to Seller’s current, actual 280 knowledge. 281 18.2.2. Lead-Based Paint. Unless exempt, if the improvements on the Property include one or more residential 282 dwellings for which a building permit was issued prior to January 1, 1978, a completed Lead-Based Paint Disclosure (Sales) form 283 must be signed by Seller and the real estate licensees, and given to any potential buyer in a timely manner. 284 18.2.3. Carbon Monoxide Alarms. Note: If the improvements on the Property have a fuel-fired heater or appliance, a 285 fireplace, or an attached garage and one or more rooms lawfully used for sleeping purposes (Bedroom), Seller understands that 286 Colorado law requires that Seller assure the Property has an operational carbon monoxide alarm installed within fifteen feet of the 287 entrance to each Bedroom or in a location as required by the applicable building code, prior to offering the Property for sale or lease. 288 18.2.4. Condition of Property. The Property will be conveyed in the condition existing as of the date of the sales 289 contract or lease, ordinary wear and tear excepted, unless Seller, at Seller’s sole option, agrees in writing to any repairs or other 290 work to be performed by Seller. 291 292 19. RIGHT OF PARTIES TO CANCEL. 293 19.1. Right of Seller to Cancel. In the event Broker defaults under this Seller Listing Contract, Seller has the right to cancel 294 this Seller Listing Contract, including all rights of Brokerage Firm to any compensation if the Seller Agency box is checked. 295 Examples of a Broker breach include, but are not limited to (1) abandonment of Seller, (2) failure to fulfill all material obligations 296 of Broker and (3) failure to fulfill all material Uniform Duties (§ 5) or, if the Seller Agency box at the top of page 1 is checked, the 297 failure to fulfill all material Additional Duties Of Seller’s Agent (§ 6). Any rights of Seller that accrued prior to cancellation will 298 survive such cancellation. 299 19.2. Right of Broker to Cancel. Brokerage Firm may cancel this Seller Listing Contract upon written notice to Seller that 300 title is not satisfactory to Brokerage Firm. Although Broker has no obligation to investigate or inspect the Property, and no duty to 301 verify statements made, Brokerage Firm has the right to cancel this Seller Listing Contract if any of the following are 302 unsatisfactory (1) the physical condition of the Property or Inclusions, (2) any proposed or existing transportation project, road, 303 street or highway, (3) any other activity, odor or noise (whether on or off the Property) and its effect or expected effect on the 304 Property or its occupants, or (4) any facts or suspicions regarding circumstances that could psychologically impact or stigmatize 305 the Property. Additionally, Brokerage Firm has the right to cancel this Seller Listing Contract if Seller or occupant of the Property 306 fails to reasonably cooperate with Broker or Seller defaults under this Seller Listing Contract. Any rights of Brokerage Firm that 307 accrued prior to cancellation will survive such cancellation. 308

20. FORFEITURE OF PAYMENTS. In the event of a forfeiture of payments made by a buyer, the sums received will be 309 divided between Brokerage Firm and Seller, one-half thereof to Brokerage Firm but not to exceed the Brokerage Firm 310 compensation agreed upon herein, and the balance to Seller. Any forfeiture of payment under this section will not reduce any 311 Brokerage Firm compensation owed, earned and payable under § 7. 312

21. COST OF SERVICES AND REIMBURSEMENT. Unless otherwise agreed upon in writing, Brokerage Firm must bear all 313 expenses incurred by Brokerage Firm, if any, to market the Property and to compensate cooperating brokerage firms, if any. 314 Neither Broker nor Brokerage Firm will obtain or order any other products or services unless Seller agrees in writing to pay for 315 them promptly when due (examples: surveys, radon tests, soil tests, title reports, engineering studies, property inspections). Unless 316 otherwise agreed, neither Broker nor Brokerage Firm is obligated to advance funds for Seller. Seller must reimburse Brokerage 317 Firm for payments made by Brokerage Firm for such products or services authorized by Seller. 318

22. DISCLOSURE OF SETTLEMENT COSTS. Seller acknowledges that costs, quality, and extent of service vary between 319 different settlement service providers (e.g., attorneys, lenders, inspectors and title companies). 320

23. MAINTENANCE OF THE PROPERTY. Neither Broker nor Brokerage Firm is responsible for maintenance of the 321 Property nor are they liable for damage of any kind occurring to the Property, unless such damage is caused by their negligence or 322 intentional misconduct. 323



24. NONDISCRIMINATION. The parties agree not to discriminate unlawfully against any prospective buyer because of the 324 race, creed, color, sex, sexual orientation, marital status, familial status, physical or mental disability, handicap, religion, national 325 origin or ancestry of such person. 326

25. RECOMMENDATION OF LEGAL AND TAX COUNSEL. By signing this document, Seller acknowledges that Broker 327 has advised that this document has important legal consequences and has recommended consultation with legal and tax or other 328 counsel before signing this Seller Listing Contract. 329

26. MEDIATION. If a dispute arises relating to this Seller Listing Contract, prior to or after closing, and is not resolved, the 330 parties must first proceed in good faith to submit the matter to mediation. Mediation is a process in which the parties meet with an 331 impartial person who helps to resolve the dispute informally and confidentially. Mediators cannot impose binding decisions. The 332 parties to the dispute must agree, in writing, before any settlement is binding. The parties will jointly appoint an acceptable 333 mediator and will share equally in the cost of such mediation. The mediation, unless otherwise agreed, will terminate in the event 334 the entire dispute is not resolved within 30 calendar days of the date written notice requesting mediation is delivered by one party 335 to the other at the other party’s last known address. 336

27. ATTORNEY FEES. In the event of any arbitration or litigation relating to this Seller Listing Contract, the arbitrator or court 337 must award to the prevailing party all reasonable costs and expenses, including attorney and legal fees. 338

28. ADDITIONAL PROVISIONS. (The following additional provisions have not been approved by the Colorado Real Estate 339 Commission.) 340 341 342 343

29. ATTACHMENTS. The following are a part of this Seller Listing Contract: 344 345 346

30. NO OTHER PARTY OR INTENDED BENEFICIARIES. Nothing in this Seller Listing Contract is deemed to inure to the 347 benefit of any person other than Seller, Broker and Brokerage Firm. 348

31. NOTICE, DELIVERY AND CHOICE OF LAW. 349 31.1. Physical Delivery. All notices must be in writing, except as provided in § 31.2. Any document, including a signed 350 document or notice, delivered to the other party to this Seller Listing Contract, is effective upon physical receipt. Delivery to Seller 351 is effective when physically received by Seller, any signator on behalf of Seller, any named individual of Seller or representative 352 of Seller. 353 31.2. Electronic Delivery. As an alternative to physical delivery, any document, including a signed document or written 354 notice, may be delivered in electronic form only by the following indicated methods: Facsimile Email Internet. If no 355 box is checked, this § 31.2 is not applicable and § 31.1 governs notice and delivery. Documents with original signatures will be 356 provided upon request of any party. 357 31.3. Choice of Law. This Seller Listing Contract and all disputes arising hereunder are governed by and construed in 358 accordance with the laws of the State of Colorado that would be applicable to Colorado residents who sign a contract in this state 359 for property located in Colorado. 360

32. MODIFICATION OF THIS SELLER LISTING CONTRACT. No subsequent modification of any of the terms of this 361 Seller Listing Contract is valid, binding upon the parties, or enforceable unless made in writing and signed by the parties. 362

33. COUNTERPARTS. This Seller Listing Contract may be executed by each of the parties, separately, and when so executed 363 by all the parties, such copies taken together are deemed to be a full and complete contract between the parties. 364

34. ENTIRE AGREEMENT. This agreement constitutes the entire contract between the parties, and any prior agreements, 365 whether oral or written, have been merged and integrated into this Seller Listing Contract. 366

35. COPY OF CONTRACT. Seller acknowledges receipt of a copy of this Seller Listing Contract signed by Broker, including 367 all attachments. 368

Brokerage Firm authorizes Broker to execute this Seller Listing Contract on behalf of Brokerage Firm. 369



Seller’s Name: Broker’s Name:

Seller’s Signature Date Broker’s Signature Date

Address: Address: Phone No.: Phone No.: Fax No.: Fax No.: Electronic Address: Electronic Address: Brokerage

Firm’s Name:

Address: Phone No.: Fax No.: Electronic Address: 370



MCDOUGAL TO SMITH – SALES CONTRACT After exhaustive efforts, you finally get an offer for the purchase

of the property at 825 Marble. The offer is secured through a broker at Douglas Realty, Inc. The offer is dated Feb. 28 of the current year.

The offer is for $98,000.00, and the buyers intend to assume the existing loan, pay $10,000 in cash, plus normal closing costs (which is all the money they have in the world,) and pay the balance with a promissory note to the sellers, secured by a deed of trust. The note is to be amortized over a ten-year period at 11% interest. The buyers insist that they have the right to prepay the loan at any time without penalty, and agree to a penalty of 10% of the payment due, if payment is made more than 5 days late. They want the right to cure and agree to pay 15% interest during any period they are late, as well as seller’s costs in attempting to collect on default.

The buyers understand that to assume the present loan, they will have to pay an assumption fee of $100, and the interest rate will be 1% higher than the current rate. This loan shall not include escrow funds for taxes and insurance. The buyers accept the good news/bad news proposition that you present to their broker: They are happy to hear that they do not have to pay private mortgage insurance since it was removed years ago when the loan had been paid down. They don’t like that they must pay half the closing fee.

The buyers want the drapes, washer and dryer be included in the purchase price. They do not mind the chandelier being removed, and are aware that the sellers intend to paint the living and dining rooms, as well as some re-carpeting. Buyers, Judith P. and Albert Ashton Smith insist these details be in their offer. They wish to take title as joint tenants, and wish the closing to take place one month from date of offer. Draw up the offer to present to the sellers. NOTE: The Closing course Contract problems are not like in Chapter 21, which are designed to help you learn the specific contract passage. This Contract problem is intended more as a Practical (“Real–Life”) Example, an illustration of how a real closing works, and a sample of the kinds of forms you will see. Since you are not expected to spend a great deal of time completing the contract problems in this Closings course, no answer key is provided. You should focus on completing the worksheets/settlement statements, as you are expected to know and will be heavily tested on debits and credits, how to calculate prorations, as all other Closings concepts.





(CBS1-6-15) (Mandatory 1-16) 2



5

CONTRACT TO BUY AND SELL REAL ESTATE 6

(RESIDENTIAL) 7

8

Date: 9

AGREEMENT 10

1. AGREEMENT. Buyer agrees to buy and Seller agrees to sell, the Property described below on the terms and conditions set 11

forth in this contract (Contract). 12

2. PARTIES AND PROPERTY. 13

2.1. Buyer. Buyer, , 14

will take title to the Property described below as Joint Tenants Tenants In Common Other . 15

2.2. No Assignability. This Contract Is Not assignable by Buyer unless otherwise specified in Additional Provisions. 16

17

2.3. Seller. Seller, , is 18

the current owner of the Property described below. 19

2.4. Property. The Property is the following legally described real estate in the County of , Colorado: 20

21

22

23

24

25

known as No. , 26


together with the interests, easements, rights, benefits, improvements and attached fixtures appurtenant thereto, and all interest of 28

Seller in vacated streets and alleys adjacent thereto, except as herein excluded (Property). 29

30

2.5. Inclusions. The Purchase Price includes the following items (Inclusions): 31

2.5.1. Inclusions - Attached. The following items are included unless excluded under Exclusions: lighting, 32

heating, plumbing, ventilating and air conditioning units, TV antennas, inside telephone, network and coaxial (cable) wiring and 33

connecting blocks/jacks, plants, mirrors, floor coverings, intercom systems, built-in kitchen appliances, sprinkler systems and 34

controls, built-in vacuum systems (including accessories), garage door openers (including _______ remote controls). If checked, 35

the following are owned by the Seller and included (leased items should be listed under Due Diligence Documents): None 36

Solar Panels Water Softeners Security Systems Satellite Systems (including satellite dishes). If any additional 37

items are attached to the Property after the date of this Contract, such additional items are also included in the Purchase Price. 38

2.5.2. Inclusions – Not Attached. If on the Property, whether attached or not, on the date of this Contract, the 39

following items are included unless excluded under Exclusions: storm windows, storm doors, window and porch shades, awnings, 40

blinds, screens, window coverings and treatments, curtain rods, drapery rods, fireplace inserts, fireplace screens, fireplace grates, 41

heating stoves, storage sheds, carbon monoxide alarms, smoke/fire detectors and all keys. 42

2.5.3. Personal Property - Conveyance. Any personal property must be conveyed at Closing by Seller free and 43

clear of all taxes (except personal property taxes for the year of Closing), liens and encumbrances, except . 44

Conveyance of all personal property will be by bill of sale or other applicable legal instrument. 45

2.5.4. Other Inclusions. The following items, whether fixtures or personal property, are also included in the 46

Purchase Price: 47

48

49

50

51

52

2.5.5. Parking and Storage Facilities. Use Only Ownership of the following parking facilities: 53



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Typewritten Text


Ccnicholson

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; and Use Only Ownership of the following storage facilities: . 54

2.6. Exclusions. The following items are excluded (Exclusions): 55

56

57

58

2.7. Water Rights, Well Rights, Water and Sewer Taps. 59

2.7.1. Deeded Water Rights. The following legally described water rights: 60

61

62

63

Any deeded water rights will be conveyed by a good and sufficient deed at Closing. 64

2.7.2. Other Rights Relating to Water. The following rights relating to water not included in §§ 2.7.1, 2.7.3, 65

2.7.4 and 2.7.5, will be transferred to Buyer at Closing: 66

67

68

69

2.7.3. Well Rights. Seller agrees to supply required information to Buyer about the well. Buyer understands that 70

if the well to be transferred is a “Small Capacity Well” or a “Domestic Exempt Water Well,” used for ordinary household 71

purposes, Buyer must, prior to or at Closing, complete a Change in Ownership form for the well. If an existing well has not been 72

registered with the Colorado Division of Water Resources in the Department of Natural Resources (Division), Buyer must 73

complete a registration of existing well form for the well and pay the cost of registration. If no person will be providing a closing 74

service in connection with the transaction, Buyer must file the form with the Division within sixty days after Closing. The Well 75

Permit # is . 76

2.7.4. Water Stock Certificates. The water stock certificates to be transferred at Closing are as follows: 77

78

79

80

2.7.5. Conveyance. If Buyer is to receive any rights to water pursuant to § 2.7.2 (Other Rights Relating to Water), 81

§ 2.7.3 (Well Rights), or § 2.7.4 (Water Stock Certificates), Seller agrees to convey such rights to Buyer by executing the 82

applicable legal instrument at Closing. 83

3. DATES AND DEADLINES. 84

Item No. Reference Event Date or Deadline


Title












Loan and Credit












Appraisal




Survey
















35 § 28 Acceptance Deadline Date

36 § 28 Acceptance Deadline Time

Note: If FHA or VA loan boxes are checked in § 4.5.3 (Loan Limitations), the Appraisal deadlines do Not apply to FHA insured 85

or VA guaranteed loans. 86

3.1. Applicability of Terms. Any box checked in this Contract means the corresponding provision applies. Any box, 87

blank or line in this Contract left blank or completed with the abbreviation “N/A”, or the word “Deleted” means such provision, 88

including any deadline, is not applicable and the corresponding provision of this Contract to which reference is made is deleted. If 89

no box is checked in a provision that contains a selection of “None”, such provision means that “None” applies. 90

The abbreviation “MEC” (mutual execution of this Contract) means the date upon which both parties have signed this Contract. 91

92

4. PURCHASE PRICE AND TERMS. 93

4.1. Price and Terms. The Purchase Price set forth below is payable in U.S. Dollars by Buyer as follows: 94




3 § 4.5 New Loan $




7

8


10 TOTAL $ $

4.2. Seller Concession. At Closing, Seller will credit to Buyer $______________ (Seller Concession). The Seller 95

Concession may be used for any Buyer fee, cost, charge or expenditure to the extent the amount is allowed by the Buyer’s lender 96

and is included in the Closing Statement or Closing Disclosure, at Closing. Examples of allowable items to be paid for by the 97

Seller Concession include, but are not limited to: Buyer’s closing costs, loan discount points, loan origination fees, prepaid items 98

and any other fee, cost, charge, expense or expenditure. Seller Concession is in addition to any sum Seller has agreed to pay or 99

credit Buyer elsewhere in this Contract. 100

4.3. Earnest Money. The Earnest Money set forth in this section, in the form of a ______________________, will be 101

payable to and held by ________________________________________ (Earnest Money Holder), in its trust account, on behalf of 102

both Seller and Buyer. The Earnest Money deposit must be tendered, by Buyer, with this Contract unless the parties mutually 103

agree to an Alternative Earnest Money Deadline for its payment. The parties authorize delivery of the Earnest Money deposit to 104




the company conducting the Closing (Closing Company), if any, at or before Closing. In the event Earnest Money Holder has 105

agreed to have interest on Earnest Money deposits transferred to a fund established for the purpose of providing affordable housing 106

to Colorado residents, Seller and Buyer acknowledge and agree that any interest accruing on the Earnest Money deposited with the 107

Earnest Money Holder in this transaction will be transferred to such fund. 108

4.3.1. Alternative Earnest Money Deadline. The deadline for delivering the Earnest Money, if other than at the 109

time of tender of this Contract, is as set forth as the Alternative Earnest Money Deadline. 110

4.3.2. Return of Earnest Money. If Buyer has a Right to Terminate and timely terminates, Buyer is entitled to 111

the return of Earnest Money as provided in this Contract. If this Contract is terminated as set forth in § 25 and, except as provided 112

in § 24, if the Earnest Money has not already been returned following receipt of a Notice to Terminate, Seller agrees to execute 113

and return to Buyer or Broker working with Buyer, written mutual instructions (e.g., Earnest Money Release form), within three 114

days of Seller’s receipt of such form. 115

4.4. Form of Funds; Time of Payment; Available Funds. 116

4.4.1. Good Funds. All amounts payable by the parties at Closing, including any loan proceeds, Cash at Closing 117

and closing costs, must be in funds that comply with all applicable Colorado laws, including electronic transfer funds, certified 118

check, savings and loan teller’s check and cashier’s check (Good Funds). 119

4.4.2. Time of Payment; Available Funds. All funds, including the Purchase Price to be paid by Buyer, must be 120

paid before or at Closing or as otherwise agreed in writing between the parties to allow disbursement by Closing Company at 121

Closing OR SUCH NONPAYING PARTY WILL BE IN DEFAULT. Buyer represents that Buyer, as of the date of this 122

Contract, Does Does Not have funds that are immediately verifiable and available in an amount not less than the amount 123

stated as Cash at Closing in § 4.1. 124

4.5. New Loan. 125

4.5.1. Buyer to Pay Loan Costs. Buyer, except as provided in § 4.2, if applicable, must timely pay Buyer’s loan 126

costs, loan discount points, prepaid items and loan origination fees, as required by lender. 127

4.5.2. Buyer May Select Financing. Buyer may pay in cash or select financing appropriate and acceptable to 128

Buyer, including a different loan than initially sought, except as restricted in § 4.5.3 or § 30 (Additional Provisions). 129

4.5.3. Loan Limitations. Buyer may purchase the Property using any of the following types of loans: 130

Conventional FHA VA Bond Other . 131

4.5.4. Good Faith Estimate – Monthly Payment and Loan Costs. Buyer is advised to review the terms, conditions 132

and costs of Buyer’s New Loan carefully. If Buyer is applying for a residential loan, the lender generally must provide Buyer with 133

a good faith estimate of Buyer’s closing costs within three days after Buyer completes a loan application. Buyer also should obtain 134

an estimate of the amount of Buyer’s monthly mortgage payment. 135

4.6. Assumption. Buyer agrees to assume and pay an existing loan in the approximate amount of the Assumption 136

Balance set forth in § 4.1, presently payable at $______________ per ________________ including principal and interest 137

presently at the rate of ________% per annum, and also including escrow for the following as indicated: Real Estate Taxes 138

Property Insurance Premium Mortgage Insurance Premium and . 139

Buyer agrees to pay a loan transfer fee not to exceed $_____________. At the time of assumption, the new interest rate will 140

not exceed ________% per annum and the new payment will not exceed $_____________ per ________________ principal and 141

interest, plus escrow, if any. If the actual principal balance of the existing loan at Closing is less than the Assumption Balance, 142

which causes the amount of cash required from Buyer at Closing to be increased by more than $_____________, then Buyer has 143

the Right to Terminate under § 25.1, on or before Closing Date, based on the reduced amount of the actual principal balance. 144

Seller Will Will Not be released from liability on said loan. If applicable, compliance with the requirements for 145

release from liability will be evidenced by delivery on or before Loan Transfer Approval Deadline at Closing of an 146

appropriate letter of commitment from lender. Any cost payable for release of liability will be paid by 147

in an amount not to exceed $_____________. 148

4.7. Seller or Private Financing. 149

WARNING: Unless the transaction is exempt, federal and state laws impose licensing, other requirements and restrictions on 150

sellers and private financiers. Contract provisions on financing and financing documents, unless exempt, should be prepared by a 151

licensed Colorado attorney or licensed mortgage loan originator. Brokers should not prepare or advise the parties on the specifics 152

of financing, including whether or not a party is exempt from the law. 153

4.7.1. Seller Financing. If Buyer is to pay all or any portion of the Purchase Price with Seller financing, 154

Buyer Seller will deliver the proposed Seller financing documents to the other party on or before _________ days before 155

Seller or Private Financing Deadline. 156

4.7.1.1. Seller May Terminate. If Seller is to provide Seller financing, this Contract is conditional upon 157

Seller determining whether such financing is satisfactory to the Seller, including its payments, interest rate, terms, conditions, cost 158

and compliance with the law. Seller has the Right to Terminate under § 25.1, on or before Seller or Private Financing Deadline, 159

if such Seller financing is not satisfactory to the Seller, in Seller’s sole subjective discretion. 160

4.7.2. Buyer May Terminate. If Buyer is to pay all or any portion of the Purchase Price with Seller or private 161

financing, this Contract is conditional upon Buyer determining whether such financing is satisfactory to the Buyer, including its 162

availability, payments, interest rate, terms, conditions and cost. Buyer has the Right to Terminate under § 25.1, on or before Seller 163




or Private Financing Deadline, if such Seller or private financing is not satisfactory to Buyer, in Buyer’s sole subjective 164

discretion. 165

TRANSACTION PROVISIONS 166

5. FINANCING CONDITIONS AND OBLIGATIONS. 167

5.1. Loan Application. If Buyer is to pay all or part of the Purchase Price by obtaining one or more new loans (New 168

Loan), or if an existing loan is not to be released at Closing, Buyer, if required by such lender, must make an application verifiable 169

by such lender, on or before Loan Application Deadline and exercise reasonable efforts to obtain such loan or approval. 170

5.2. Loan Objection. If Buyer is to pay all or part of the Purchase Price with a New Loan, this Contract is conditional 171

upon Buyer determining, in Buyer’s sole subjective discretion, whether the New Loan is satisfactory to Buyer, including its 172

availability, payments, interest rate, terms, conditions, and cost of such New Loan. This condition is for the sole benefit of Buyer. 173

Buyer has the Right to Terminate under § 25.1, on or before Loan Objection Deadline, if the New Loan is not satisfactory to 174

Buyer, in Buyer’s sole subjective discretion. IF SELLER IS NOT IN DEFAULT AND DOES NOT TIMELY RECEIVE 175

BUYER’S WRITTEN NOTICE TO TERMINATE, BUYER’S EARNEST MONEY WILL BE NONREFUNDABLE, except 176

as otherwise provided in this Contract (e.g., Appraisal, Title, Survey). 177

5.3. Credit Information. If an existing loan is not to be released at Closing, this Contract is conditional (for the sole 178

benefit of Seller) upon Seller’s approval of Buyer’s financial ability and creditworthiness, which approval will be at Seller’s sole 179

subjective discretion. Accordingly: (1) Buyer must supply to Seller by Buyer’s Credit Information Deadline, at Buyer’s 180

expense, information and documents (including a current credit report) concerning Buyer’s financial, employment and credit 181

condition; (2) Buyer consents that Seller may verify Buyer’s financial ability and creditworthiness; and (3) any such information 182

and documents received by Seller must be held by Seller in confidence, and not released to others except to protect Seller’s interest 183

in this transaction. If the Cash at Closing is less than as set forth in § 4.1 of this Contract, Seller has the Right to Terminate under 184

§ 25.1, on or before Closing. If Seller disapproves of Buyer’s financial ability or creditworthiness, in Seller’s sole subjective 185

discretion, Seller has the Right to Terminate under § 25.1, on or before Disapproval of Buyer’s Credit Information Deadline. 186

5.4. Existing Loan Review. If an existing loan is not to be released at Closing, Seller must deliver copies of the loan 187

documents (including note, deed of trust, and any modifications) to Buyer by Existing Loan Documents Deadline. For the sole 188

benefit of Buyer, this Contract is conditional upon Buyer’s review and approval of the provisions of such loan documents. Buyer 189

has the Right to Terminate under § 25.1, on or before Existing Loan Documents Objection Deadline, based on any 190

unsatisfactory provision of such loan documents, in Buyer’s sole subjective discretion. If the lender’s approval of a transfer of the 191

Property is required, this Contract is conditional upon Buyer’s obtaining such approval without change in the terms of such loan, 192

except as set forth in § 4.6. If lender’s approval is not obtained by Loan Transfer Approval Deadline, this Contract will 193

terminate on such deadline. Seller has the Right to Terminate under § 25.1, on or before Closing, in Seller’s sole subjective 194

discretion, if Seller is to be released from liability under such existing loan and Buyer does not obtain such compliance as set forth 195

in § 4.6. 196

6. APPRAISAL PROVISIONS. 197

6.1. Appraisal Definition. An “Appraisal” is an opinion of value prepared by a licensed or certified appraiser, engaged 198

on behalf of Buyer or Buyer’s lender, to determine the Property’s market value (Appraised Value). The Appraisal may also set 199

forth certain lender requirements, replacements, removals or repairs necessary on or to the Property as a condition for the Property 200

to be valued at the Appraised Value. 201

6.2. Appraisal Condition. The applicable appraisal provision set forth below applies to the respective loan type set forth 202

in § 4.5.3, or if a cash transaction (i.e. no financing), § 6.2.1 applies. 203

6.2.1. Conventional/Other. Buyer has the right to obtain an Appraisal. If the Appraised Value is less than the 204

Purchase Price, or if the Appraisal is not received by Buyer on or before Appraisal Deadline Buyer may, on or before Appraisal 205

Objection Deadline, notwithstanding § 8.3 or § 13: 206


6.2.1.2. Appraisal Objection. Deliver to Seller a written objection accompanied by either a copy of the 208

Appraisal or written notice from lender that confirms the Appraisal Value is less than the Purchase Price. 209

6.2.1.3. Appraisal Resolution. If an Appraisal Objection is received by Seller, on or before Appraisal 210

Objection Deadline, and if Buyer and Seller have not agreed in writing to a settlement thereof on or before Appraisal Resolution 211

Deadline (§ 3), this Contract will terminate on the Appraisal Resolution Deadline, unless Seller receives Buyer’s written 212

withdrawal of the Appraisal Objection before such termination, i.e., on or before expiration of Appraisal Resolution Deadline. 213

6.2.2. FHA. It is expressly agreed that, notwithstanding any other provisions of this Contract, the purchaser 214

(Buyer) shall not be obligated to complete the purchase of the Property described herein or to incur any penalty by forfeiture of 215

Earnest Money deposits or otherwise unless the purchaser (Buyer) has been given, in accordance with HUD/FHA or VA 216

requirements, a written statement issued by the Federal Housing Commissioner, Department of Veterans Affairs, or a Direct 217

Endorsement lender, setting forth the appraised value of the Property of not less than $______________. The purchaser (Buyer) 218

shall have the privilege and option of proceeding with the consummation of this Contract without regard to the amount of the 219




appraised valuation. The appraised valuation is arrived at to determine the maximum mortgage the Department of Housing and 220

Urban Development will insure. HUD does not warrant the value nor the condition of the Property. The purchaser (Buyer) should 221

satisfy himself/herself that the price and condition of the Property are acceptable. 222

6.2.3. VA. It is expressly agreed that, notwithstanding any other provisions of this Contract, the purchaser (Buyer) 223

shall not incur any penalty by forfeiture of Earnest Money or otherwise or be obligated to complete the purchase of the Property 224

described herein, if the Contract Purchase Price or cost exceeds the reasonable value of the Property established by the Department 225

of Veterans Affairs. The purchaser (Buyer) shall, however, have the privilege and option of proceeding with the consummation of 226

this Contract without regard to the amount of the reasonable value established by the Department of Veterans Affairs. 227

6.3. Lender Property Requirements. If the lender imposes any requirements, replacements, removals or repairs, 228

including any specified in the Appraisal (Lender Requirements) to be made to the Property (e.g., roof repair, repainting), beyond 229

those matters already agreed to by Seller in this Contract, Seller has the Right to Terminate under § 25.1, (notwithstanding § 10 of 230

this Contract), on or before three days following Seller’s receipt of the Lender Requirements, in Seller’s sole subjective discretion. 231

Seller’s Right to Terminate in this § 6.3 does not apply if, on or before any termination by Seller pursuant to this § 6.3: (1) the 232

parties enter into a written agreement regarding the Lender Requirements; or (2) the Lender Requirements have been completed; or 233

(3) the satisfaction of the Lender Requirements is waived in writing by Buyer. 234

6.4. Cost of Appraisal. Cost of the Appraisal to be obtained after the date of this Contract must be timely paid by 235

Buyer Seller. The cost of the Appraisal may include any and all fees paid to the appraiser, appraisal management company, 236

lender's agent or all three. 237

238

7. OWNERS’ ASSOCIATION. This Section is applicable if the Property is located within a Common Interest 239

Community and subject to such declaration. 240

7.1. Common Interest Community Disclosure. THE PROPERTY IS LOCATED WITHIN A COMMON 241

INTEREST COMMUNITY AND IS SUBJECT TO THE DECLARATION FOR THE COMMUNITY. THE OWNER OF 242

THE PROPERTY WILL BE REQUIRED TO BE A MEMBER OF THE OWNERS’ ASSOCIATION FOR THE 243

COMMUNITY AND WILL BE SUBJECT TO THE BYLAWS AND RULES AND REGULATIONS OF THE 244

ASSOCIATION. THE DECLARATION, BYLAWS, AND RULES AND REGULATIONS WILL IMPOSE FINANCIAL 245

OBLIGATIONS UPON THE OWNER OF THE PROPERTY, INCLUDING AN OBLIGATION TO PAY 246

ASSESSMENTS OF THE ASSOCIATION. IF THE OWNER DOES NOT PAY THESE ASSESSMENTS, THE 247

ASSOCIATION COULD PLACE A LIEN ON THE PROPERTY AND POSSIBLY SELL IT TO PAY THE DEBT. THE 248

DECLARATION, BYLAWS, AND RULES AND REGULATIONS OF THE COMMUNITY MAY PROHIBIT THE 249

OWNER FROM MAKING CHANGES TO THE PROPERTY WITHOUT AN ARCHITECTURAL REVIEW BY THE 250

ASSOCIATION (OR A COMMITTEE OF THE ASSOCIATION) AND THE APPROVAL OF THE ASSOCIATION. 251

PURCHASERS OF PROPERTY WITHIN THE COMMON INTEREST COMMUNITY SHOULD INVESTIGATE THE 252

FINANCIAL OBLIGATIONS OF MEMBERS OF THE ASSOCIATION. PURCHASERS SHOULD CAREFULLY 253

READ THE DECLARATION FOR THE COMMUNITY AND THE BYLAWS AND RULES AND REGULATIONS OF 254

THE ASSOCIATION. 255

7.2. Owners’ Association Documents. Owners’ Association Documents (Association Documents) consist of the 256

following: 257

7.2.1. All Owners’ Association declarations, articles of incorporation, bylaws, articles of organization, operating 258

agreements, rules and regulations, party wall agreements; 259

7.2.2. Minutes of most recent annual owners’ meeting; 260

7.2.3. Minutes of any directors’ or managers’ meetings during the six-month period immediately preceding the 261

date of this Contract. If none of the preceding minutes exist, then the most recent minutes, if any (§§ 7.2.1, 7.2.2 and 7.2.3, 262

collectively, Governing Documents); and 263

7.2.4. The most recent financial documents which consist of: (1) annual and most recent balance sheet, (2) annual 264

and most recent income and expenditures statement, (3) annual budget, (4) reserve study, and (5) notice of unpaid assessments, if 265

any (collectively, Financial Documents). 266

7.3. Association Documents to Buyer. 267

7.3.1. Seller to Provide Association Documents. Seller is obligated to provide to Buyer the Association 268

Documents, at Seller’s expense, on or before Association Documents Deadline. Seller authorizes the Association to provide the 269

Association Documents to Buyer, at Seller’s expense. Seller’s obligation to provide the Association Documents is fulfilled upon 270

Buyer’s receipt of the Association Documents, regardless of who provides such documents. 271

7.4. Conditional on Buyer’s Review. Buyer has the right to review the Association Documents. Buyer has the Right to 272

Terminate under § 25.1, on or before Association Documents Objection Deadline, based on any unsatisfactory provision in any 273

of the Association Documents, in Buyer’s sole subjective discretion. Should Buyer receive the Association Documents after 274

Association Documents Deadline, Buyer, at Buyer’s option, has the Right to Terminate under § 25.1 by Buyer’s Notice to 275

Terminate received by Seller on or before ten days after Buyer’s receipt of the Association Documents. If Buyer does not receive 276

the Association Documents, or if Buyer’s Notice to Terminate would otherwise be required to be received by Seller after Closing 277

Date, Buyer’s Notice to Terminate must be received by Seller on or before Closing. If Seller does not receive Buyer’s Notice to 278




Terminate within such time, Buyer accepts the provisions of the Association Documents as satisfactory, and Buyer waives any 279

Right to Terminate under this provision, notwithstanding the provisions of § 8.6 (Right of First Refusal or Contract Approval). 280

8. TITLE INSURANCE, RECORD TITLE AND OFF-RECORD TITLE. 281

8.1. Evidence of Record Title. 282

8.1.1. Seller Selects Title Insurance Company. If this box is checked, Seller will select the title insurance 283

company to furnish the owner’s title insurance policy at Seller’s expense. On or before Record Title Deadline, Seller must furnish 284

to Buyer, a current commitment for an owner’s title insurance policy (Title Commitment), in an amount equal to the Purchase 285

Price, or if this box is checked, an Abstract of Title certified to a current date. Seller will cause the title insurance policy to be 286

issued and delivered to Buyer as soon as practicable at or after Closing. 287

8.1.2. Buyer Selects Title Insurance Company. If this box is checked, Buyer will select the title insurance 288

company to furnish the owner’s title insurance policy at Buyer’s expense. On or before Record Title Deadline, Buyer must 289

furnish to Seller, a current commitment for owner’s title insurance policy (Title Commitment), in an amount equal to the Purchase 290

Price. 291

If neither box in § 8.1.1 or § 8.1.2 is checked, § 8.1.1 applies. 292

8.1.3. Owner's Extended Coverage (OEC). The Title Commitment Will Will Not contain Owner’s 293

Extended Coverage (OEC). If the Title Commitment is to contain OEC, it will commit to delete or insure over the standard 294

exceptions which relate to: (1) parties in possession, (2) unrecorded easements, (3) survey matters, (4) unrecorded mechanics’ 295

liens, (5) gap period (period between the effective date and time of commitment to the date and time the deed is recorded), and (6) 296

unpaid taxes, assessments and unredeemed tax sales prior to the year of Closing. Any additional premium expense to obtain OEC 297

will be paid by Buyer Seller One-Half by Buyer and One-Half by Seller Other__________________________. 298

Regardless of whether the Contract requires OEC, the Title Insurance Commitment may not provide OEC or delete or insure over 299

any or all of the standard exceptions for OEC. The Title Insurance Company may require a New Survey or New ILC, defined 300

below, among other requirements for OEC. If the Title Insurance Commitment is not satisfactory to Buyer, Buyer has a right to 301

object under § 8.4 (Right to Object to Title, Resolution). 302

8.1.4. Title Documents. Title Documents consist of the following: (1) copies of any plats, declarations, 303

covenants, conditions and restrictions burdening the Property, and (2) copies of any other documents (or, if illegible, summaries of 304

such documents) listed in the schedule of exceptions (Exceptions) in the Title Commitment furnished to Buyer (collectively, Title 305

Documents). 306

8.1.5. Copies of Title Documents. Buyer must receive, on or before Record Title Deadline, copies of all Title 307

Documents. This requirement pertains only to documents as shown of record in the office of the clerk and recorder in the county 308

where the Property is located. The cost of furnishing copies of the documents required in this Section will be at the expense of the 309

party or parties obligated to pay for the owner’s title insurance policy. 310

8.1.6. Existing Abstracts of Title. Seller must deliver to Buyer copies of any abstracts of title covering all or any 311

portion of the Property (Abstract of Title) in Seller’s possession on or before Record Title Deadline. 312

8.2. Record Title. Buyer has the right to review and object to the Abstract of Title or Title Commitment and any of the 313

Title Documents as set forth in § 8.4 (Right to Object to Title, Resolution) on or before Record Title Objection Deadline. 314

Buyer’s objection may be based on any unsatisfactory form or content of Title Commitment or Abstract of Title, notwithstanding 315

§ 13, or any other unsatisfactory title condition, in Buyer’s sole subjective discretion. If the Abstract of Title, Title Commitment or 316

Title Documents are not received by Buyer on or before the Record Title Deadline, or if there is an endorsement to the Title 317

Commitment that adds a new Exception to title, a copy of the new Exception to title and the modified Title Commitment will be 318

delivered to Buyer. Buyer has until the earlier of Closing or ten days after receipt of such documents by Buyer to review and object 319

to: (1) any required Title Document not timely received by Buyer, (2) any change to the Abstract of Title, Title Commitment or 320

Title Documents, or (3) any endorsement to the Title Commitment. If Seller receives Buyer’s Notice to Terminate or Notice of 321

Title Objection, pursuant to this § 8.2 (Record Title), any title objection by Buyer is governed by the provisions set forth in § 8.4 322

(Right to Object to Title, Resolution). If Seller has fulfilled all Seller's obligations, if any, to deliver to Buyer all documents 323

required by § 8.1 (Evidence of Record Title) and Seller does not receive Buyer’s Notice to Terminate or Notice of Title Objection 324

by the applicable deadline specified above, Buyer accepts the condition of title as disclosed by the Abstract of Title, Title 325

Commitment and Title Documents as satisfactory. 326

8.3. Off-Record Title. Seller must deliver to Buyer, on or before Off-Record Title Deadline, true copies of all existing 327

surveys in Seller’s possession pertaining to the Property and must disclose to Buyer all easements, liens (including, without 328

limitation, governmental improvements approved, but not yet installed) or other title matters (including, without limitation, rights 329

of first refusal and options) not shown by public records, of which Seller has actual knowledge (Off-Record Matters). Buyer has 330

the right to inspect the Property to investigate if any third party has any right in the Property not shown by public records (e.g., 331

unrecorded easement, boundary line discrepancy or water rights). Buyer’s Notice to Terminate or Notice of Title Objection of any 332

unsatisfactory condition (whether disclosed by Seller or revealed by such inspection, notwithstanding § 8.2 and § 13), in Buyer’s 333

sole subjective discretion, must be received by Seller on or before Off-Record Title Objection Deadline. If an Off-Record Matter 334

is received by Buyer after the Off-Record Title Deadline, Buyer has until the earlier of Closing or ten days after receipt by Buyer 335




to review and object to such Off-Record Matter. If Seller receives Buyer’s Notice to Terminate or Notice of Title Objection 336

pursuant to this § 8.3 (Off-Record Title), any title objection by Buyer and this Contract are governed by the provisions set forth in 337

§ 8.4 (Right to Object to Title, Resolution). If Seller does not receive Buyer’s Notice to Terminate or Notice of Title Objection by 338

the applicable deadline specified above, Buyer accepts title subject to such rights, if any, of third parties of which Buyer has actual 339

knowledge. 340

8.4. Right to Object to Title, Resolution. Buyer’s right to object to any title matters includes, but is not limited to those 341

matters set forth in §§ 8.2 (Record Title), 8.3 (Off-Record Title) and 13 (Transfer of Title), in Buyer’s sole subjective discretion. If 342

Buyer objects to any title matter, on or before the applicable deadline, Buyer has the following options: 343

8.4.1. Title Objection, Resolution. If Seller receives Buyer’s written notice objecting to any title matter (Notice 344

of Title Objection) on or before the applicable deadline, and if Buyer and Seller have not agreed to a written settlement thereof on 345

or before Title Resolution Deadline, this Contract will terminate on the expiration of Title Resolution Deadline, unless Seller 346

receives Buyer’s written withdrawal of Buyer’s Notice of Title Objection (i.e., Buyer’s written notice to waive objection to such 347

items and waives the Right to Terminate for that reason), on or before expiration of Title Resolution Deadline. If either the 348

Record Title Deadline or the Off-Record Title Deadline, or both, are extended to the earlier of Closing or ten days after receipt of 349

the applicable documents by Buyer, pursuant to § 8.2 (Record Title) or § 8.3 (Off-Record Title), the Title Resolution Deadline also 350

will be automatically extended to the earlier of Closing or fifteen days after Buyer's receipt of the applicable documents; or 351

8.4.2. Title Objection, Right to Terminate. Buyer may exercise the Right to Terminate under § 25.1, on or 352

before the applicable deadline, based on any unsatisfactory title matter, in Buyer’s sole subjective discretion. 353

8.5. Special Taxing Districts. SPECIAL TAXING DISTRICTS MAY BE SUBJECT TO GENERAL OBLIGATION 354

INDEBTEDNESS THAT IS PAID BY REVENUES PRODUCED FROM ANNUAL TAX LEVIES ON THE TAXABLE 355

PROPERTY WITHIN SUCH DISTRICTS. PROPERTY OWNERS IN SUCH DISTRICTS MAY BE PLACED AT RISK 356

FOR INCREASED MILL LEVIES AND TAX TO SUPPORT THE SERVICING OF SUCH DEBT WHERE 357

CIRCUMSTANCES ARISE RESULTING IN THE INABILITY OF SUCH A DISTRICT TO DISCHARGE SUCH 358

INDEBTEDNESS WITHOUT SUCH AN INCREASE IN MILL LEVIES. BUYERS SHOULD INVESTIGATE THE 359

SPECIAL TAXING DISTRICTS IN WHICH THE PROPERTY IS LOCATED BY CONTACTING THE COUNTY 360

TREASURER, BY REVIEWING THE CERTIFICATE OF TAXES DUE FOR THE PROPERTY, AND BY OBTAINING 361

FURTHER INFORMATION FROM THE BOARD OF COUNTY COMMISSIONERS, THE COUNTY CLERK AND 362

RECORDER, OR THE COUNTY ASSESSOR. 363

Buyer has the Right to Terminate under § 25.1, on or before Off-Record Title Objection Deadline, based on any 364

unsatisfactory effect of the Property being located within a special taxing district, in Buyer’s sole subjective discretion. 365

8.6. Right of First Refusal or Contract Approval. If there is a right of first refusal on the Property or a right to approve 366

this Contract, Seller must promptly submit this Contract according to the terms and conditions of such right. If the holder of the 367

right of first refusal exercises such right or the holder of a right to approve disapproves this Contract, this Contract will terminate. 368

If the right of first refusal is waived explicitly or expires, or the Contract is approved, this Contract will remain in full force and 369

effect. Seller must promptly notify Buyer in writing of the foregoing. If expiration or waiver of the right of first refusal or approval 370

of this Contract has not occurred on or before Right of First Refusal Deadline, this Contract will then terminate. 371

8.7. Title Advisory. The Title Documents affect the title, ownership and use of the Property and should be reviewed 372

carefully. Additionally, other matters not reflected in the Title Documents may affect the title, ownership and use of the Property, 373

including, without limitation, boundary lines and encroachments, set-back requirements, area, zoning, building code violations, 374

unrecorded easements and claims of easements, leases and other unrecorded agreements, water on or under the Property, and 375

various laws and governmental regulations concerning land use, development and environmental matters. 376

8.7.1. OIL, GAS, WATER AND MINERAL DISCLOSURE. THE SURFACE ESTATE OF THE 377

PROPERTY MAY BE OWNED SEPARATELY FROM THE UNDERLYING MINERAL ESTATE, AND TRANSFER 378

OF THE SURFACE ESTATE MAY NOT NECESSARILY INCLUDE TRANSFER OF THE MINERAL ESTATE OR 379

WATER RIGHTS. THIRD PARTIES MAY OWN OR LEASE INTERESTS IN OIL, GAS, OTHER MINERALS, 380

GEOTHERMAL ENERGY OR WATER ON OR UNDER THE SURFACE OF THE PROPERTY, WHICH INTERESTS 381

MAY GIVE THEM RIGHTS TO ENTER AND USE THE SURFACE OF THE PROPERTY TO ACCESS THE 382

MINERAL ESTATE, OIL, GAS OR WATER. 383

8.7.2. SURFACE USE AGREEMENT. THE USE OF THE SURFACE ESTATE OF THE PROPERTY TO 384

ACCESS THE OIL, GAS OR MINERALS MAY BE GOVERNED BY A SURFACE USE AGREEMENT, A 385

MEMORANDUM OR OTHER NOTICE OF WHICH MAY BE RECORDED WITH THE COUNTY CLERK AND 386

RECORDER. 387

8.7.3. OIL AND GAS ACTIVITY. OIL AND GAS ACTIVITY THAT MAY OCCUR ON OR ADJACENT 388

TO THE PROPERTY MAY INCLUDE, BUT IS NOT LIMITED TO, SURVEYING, DRILLING, WELL COMPLETION 389

OPERATIONS, STORAGE, OIL AND GAS, OR PRODUCTION FACILITIES, PRODUCING WELLS, REWORKING 390

OF CURRENT WELLS, AND GAS GATHERING AND PROCESSING FACILITIES. 391

8.7.4. ADDITIONAL INFORMATION. BUYER IS ENCOURAGED TO SEEK ADDITIONAL 392

INFORMATION REGARDING OIL AND GAS ACTIVITY ON OR ADJACENT TO THE PROPERTY, INCLUDING 393




DRILLING PERMIT APPLICATIONS. THIS INFORMATION MAY BE AVAILABLE FROM THE COLORADO OIL 394

AND GAS CONSERVATION COMMISSION. 395

8.7.5. Title Insurance Exclusions. Matters set forth in this Section, and others, may be excepted, excluded from, 396

or not covered by the owner’s title insurance policy. 397

8.8. Consult an Attorney. Buyer is advised to timely consult legal counsel with respect to all such matters as there are 398

strict time limits provided in this Contract (e.g., Record Title Objection Deadline and Off-Record Title Objection Deadline). 399

9. NEW ILC, NEW SURVEY. 400

9.1. New ILC or New Survey. If the box is checked, a New Improvement Location Certificate (New ILC) 401

New Survey in the form of ___________________________________________ is required and the following will apply: 402

9.1.1. Ordering of New ILC or New Survey. Seller Buyer will order the New ILC or New Survey. The 403

New ILC or New Survey may also be a previous ILC or survey that is in the above-required form, certified and updated as of a 404

date after the date of this Contract. 405

9.1.2. Payment for New ILC or New Survey. The cost of the New ILC or New Survey will be paid, on or 406

before Closing, by: Seller Buyer or: 407

408

409

410

9.1.3. Delivery of New ILC or New Survey. Buyer, Seller, the issuer of the Title Commitment (or the provider 411

of the opinion of title if an Abstract of Title), and _____________________ will receive a New ILC or New Survey on or before 412

New ILC or New Survey Deadline. 413

9.1.4. Certification of New ILC or New Survey. The New ILC or New Survey will be certified by the surveyor 414

to all those who are to receive the New ILC or New Survey. 415

9.2. Buyer’s Right to Waive or Change New ILC or New Survey Selection. Buyer may select a New ILC or New 416

Survey different than initially specified in this Contract if there is no additional cost to Seller or change to the New ILC or New 417

Survey Objection Deadline. Buyer may, in Buyer’s sole subjective discretion, waive a New ILC or New Survey if done prior to 418

Seller incurring any cost for the same. 419

9.3. New ILC or New Survey Objection. Buyer has the right to review and object to the New ILC or New Survey. If 420

the New ILC or New Survey is not timely received by Buyer or is unsatisfactory to Buyer, in Buyer’s sole subjective discretion, 421

Buyer may, on or before New ILC or New Survey Objection Deadline, notwithstanding § 8.3 or § 13: 422


9.3.2. New ILC or New Survey Objection. Deliver to Seller a written description of any matter that was to be 424

shown or is shown in the New ILC or New Survey that is unsatisfactory and that Buyer requires Seller to correct. 425

9.3.3. New ILC or New Survey Resolution. If a New ILC or New Survey Objection is received by Seller, on 426

or before New ILC or New Survey Objection Deadline, and if Buyer and Seller have not agreed in writing to a settlement 427

thereof on or before New ILC or New Survey Resolution Deadline, this Contract will terminate on expiration of the New ILC 428

or New Survey Resolution Deadline, unless Seller receives Buyer’s written withdrawal of the New ILC or New Survey 429

Objection before such termination, i.e., on or before expiration of New ILC or New Survey Resolution Deadline. 430

DISCLOSURE, INSPECTION AND DUE DILIGENCE 431

10. PROPERTY DISCLOSURE, INSPECTION, INDEMNITY, INSURABILITY, DUE DILIGENCE, BUYER 432

DISCLOSURE AND SOURCE OF WATER. 433

10.1. Seller’s Property Disclosure. On or before Seller’s Property Disclosure Deadline, Seller agrees to deliver to 434

Buyer the most current version of the applicable Colorado Real Estate Commission’s Seller’s Property Disclosure form completed 435

by Seller to Seller’s actual knowledge, current as of the date of this Contract. 436

10.2. Disclosure of Latent Defects; Present Condition. Seller must disclose to Buyer any latent defects actually known 437

by Seller. Seller agrees that disclosure of latent defects will be in writing. Except as otherwise provided in this Contract, Buyer 438

acknowledges that Seller is conveying the Property to Buyer in an “As Is” condition, “Where Is” and “With All Faults.” 439

10.3. Inspection. Unless otherwise provided in this Contract, Buyer, acting in good faith, has the right to have inspections 440

(by one or more third parties, personally or both) of the Property and Inclusions (Inspection), at Buyer’s expense. If (1) the 441

physical condition of the Property, including, but not limited to, the roof, walls, structural integrity of the Property, the electrical, 442

plumbing, HVAC and other mechanical systems of the Property, (2) the physical condition of the Inclusions, (3) service to the 443

Property (including utilities and communication services), systems and components of the Property (e.g., heating and plumbing), 444

(4) any proposed or existing transportation project, road, street or highway, or (5) any other activity, odor or noise (whether on or 445

off the Property) and its effect or expected effect on the Property or its occupants is unsatisfactory, in Buyer’s sole subjective 446

discretion, Buyer may, on or before Inspection Objection Deadline: 447





10.3.2. Inspection Objection. Deliver to Seller a written description of any unsatisfactory physical condition that 449

Buyer requires Seller to correct. 450

10.3.3. Inspection Resolution. If an Inspection Objection is received by Seller, on or before Inspection Objection 451

Deadline, and if Buyer and Seller have not agreed in writing to a settlement thereof on or before Inspection Resolution Deadline, 452

this Contract will terminate on Inspection Resolution Deadline unless Seller receives Buyer’s written withdrawal of the 453

Inspection Objection before such termination, i.e., on or before expiration of Inspection Resolution Deadline. 454

10.4. Damage, Liens and Indemnity. Buyer, except as otherwise provided in this Contract or other written agreement 455

between the parties, is responsible for payment for all inspections, tests, surveys, engineering reports, or other reports performed at 456

Buyer’s request (Work) and must pay for any damage that occurs to the Property and Inclusions as a result of such Work. Buyer 457

must not permit claims or liens of any kind against the Property for Work performed on the Property. Buyer agrees to indemnify, 458

protect and hold Seller harmless from and against any liability, damage, cost or expense incurred by Seller and caused by any such 459

Work, claim, or lien. This indemnity includes Seller’s right to recover all costs and expenses incurred by Seller to defend against 460

any such liability, damage, cost or expense, or to enforce this section, including Seller’s reasonable attorney fees, legal fees and 461

expenses. The provisions of this section survive the termination of this Contract. This § 10.4 does not apply to items performed 462

pursuant to an Inspection Resolution. 463

10.5. Insurability. Buyer has the right to review and object to the availability, terms and conditions of and premium for 464

property insurance (Property Insurance). Buyer has the Right to Terminate under § 25.1, on or before Property Insurance 465

Objection Deadline, based on any unsatisfactory provision of the Property Insurance, in Buyer’s sole subjective discretion. 466

10.6. Due Diligence. 467

10.6.1. Due Diligence Documents. If the respective box is checked, Seller agrees to deliver copies of the following 468

documents and information pertaining to the Property (Due Diligence Documents) to Buyer on or before Due Diligence 469

Documents Delivery Deadline: 470

10.6.1.1. All current leases, including any amendments or other occupancy agreements, pertaining to the 471

Property. Those leases or other occupancy agreements pertaining to the Property that survive Closing are as follows (Leases): 472

473

474

10.6.1.2. Other documents and information: 475

476

477

478

479

10.6.2. Due Diligence Documents Review and Objection. Buyer has the right to review and object to Due 480

Diligence Documents. If the Due Diligence Documents are not supplied to Buyer or are unsatisfactory in Buyer’s sole subjective 481

discretion, Buyer may, on or before Due Diligence Documents Objection Deadline: 482


10.6.2.2. Due Diligence Documents Objection. Deliver to Seller a written description of any 484

unsatisfactory Due Diligence Documents that Buyer requires Seller to correct. 485

10.6.3. Due Diligence Documents Resolution. If a Due Diligence Documents Objection is received by Seller, on 486

or before Due Diligence Documents Objection Deadline, and if Buyer and Seller have not agreed in writing to a settlement 487

thereof on or before Due Diligence Documents Resolution Deadline, this Contract will terminate on Due Diligence Documents 488

Resolution Deadline unless Seller receives Buyer’s written withdrawal of the Due Diligence Documents Objection before such 489

termination, i.e., on or before expiration of Due Diligence Documents Resolution Deadline. 490

10.7. Conditional Upon Sale of Property. This Contract is conditional upon the sale and closing of that certain property 491

owned by Buyer and commonly known as ___________________________________________. Buyer has the Right to Terminate 492

under § 25.1 effective upon Seller's receipt of Buyer’s Notice to Terminate on or before Conditional Sale Deadline if such 493

property is not sold and closed by such deadline. This § 10.7 is for the sole benefit of Buyer. If Seller does not receive Buyer’s 494

Notice to Terminate on or before Conditional Sale Deadline, Buyer waives any Right to Terminate under this provision. 495

10.8. Source of Potable Water (Residential Land and Residential Improvements Only). Buyer Does Does Not 496

acknowledge receipt of a copy of Seller’s Property Disclosure or Source of Water Addendum disclosing the source of potable water 497

for the Property. There is No Well. Buyer Does Does Not acknowledge receipt of a copy of the current well permit. 498

Note to Buyer: SOME WATER PROVIDERS RELY, TO VARYING DEGREES, ON NONRENEWABLE GROUND 499

WATER. YOU MAY WISH TO CONTACT YOUR PROVIDER (OR INVESTIGATE THE DESCRIBED SOURCE) TO 500

DETERMINE THE LONG-TERM SUFFICIENCY OF THE PROVIDER’S WATER SUPPLIES. 501

10.9. Carbon Monoxide Alarms. Note: If the improvements on the Property have a fuel-fired heater or appliance, a 502

fireplace, or an attached garage and include one or more rooms lawfully used for sleeping purposes (Bedroom), the parties 503

acknowledge that Colorado law requires that Seller assure the Property has an operational carbon monoxide alarm installed within 504

fifteen feet of the entrance to each Bedroom or in a location as required by the applicable building code. 505

10.10. Lead-Based Paint. Unless exempt, if the improvements on the Property include one or more residential dwellings 506

for which a building permit was issued prior to January 1, 1978, this Contract is void unless (1) a completed Lead-Based Paint 507




Disclosure (Sales) form is signed by Seller, the required real estate licensees and Buyer, and (2) Seller receives the completed and 508

fully executed form prior to the time when this Contract is signed by all parties. Buyer acknowledges timely receipt of a completed 509

Lead-Based Paint Disclosure (Sales) form signed by Seller and the real estate licensees. 510

10.11. Methamphetamine Disclosure. If Seller knows that methamphetamine was ever manufactured, processed, cooked, 511

disposed of, used or stored at the Property, Seller is required to disclose such fact. No disclosure is required if the Property was 512

remediated in accordance with state standards and other requirements are fulfilled pursuant to § 25-18.5-102, C.R.S. Buyer further 513

acknowledges that Buyer has the right to engage a certified hygienist or industrial hygienist to test whether the Property has ever 514

been used as a methamphetamine laboratory. Buyer has the Right to Terminate under § 25.1, upon Seller’s receipt of Buyer’s 515

written Notice to Terminate, notwithstanding any other provision of this Contract, based on Buyer’s test results that indicate the 516

Property has been contaminated with methamphetamine, but has not been remediated to meet the standards established by rules of 517

the State Board of Health promulgated pursuant to § 25-18.5-102, C.R.S. Buyer must promptly give written notice to Seller of the 518

results of the test. 519

11. TENANT ESTOPPEL STATEMENTS. [Intentionally Deleted] 520

CLOSING PROVISIONS 521

12. CLOSING DOCUMENTS, INSTRUCTIONS AND CLOSING. 522

12.1. Closing Documents and Closing Information. Seller and Buyer will cooperate with the Closing Company to 523

enable the Closing Company to prepare and deliver documents required for Closing to Buyer and Seller and their designees. If 524

Buyer is obtaining a new loan to purchase the Property, Buyer acknowledges Buyer’s lender is required to provide the Closing 525

Company, in a timely manner, all required loan documents and financial information concerning Buyer’s new loan. Buyer and 526

Seller will furnish any additional information and documents required by Closing Company that will be necessary to complete this 527

transaction. Buyer and Seller will sign and complete all customary or reasonably required documents at or before Closing. 528

12.2. Closing Instructions. Colorado Real Estate Commission’s Closing Instructions Are Are Not executed with 529

this Contract. 530

12.3. Closing. Delivery of deed from Seller to Buyer will be at closing (Closing). Closing will be on the date specified as 531

the Closing Date or by mutual agreement at an earlier date. The hour and place of Closing will be as designated by 532

________________________________________. 533

12.4. Disclosure of Settlement Costs. Buyer and Seller acknowledge that costs, quality, and extent of service vary 534

between different settlement service providers (e.g., attorneys, lenders, inspectors and title companies). 535

13. TRANSFER OF TITLE. Subject to tender of payment at Closing as required herein and compliance by Buyer with the 536

other terms and provisions hereof, Seller must execute and deliver a good and sufficient ______________________________ deed 537

to Buyer, at Closing, conveying the Property free and clear of all taxes except the general taxes for the year of Closing. Except as 538

provided herein, title will be conveyed free and clear of all liens, including any governmental liens for special improvements 539

installed as of the date of Buyer’s signature hereon, whether assessed or not. Title will be conveyed subject to: 540

13.1. Those specific Exceptions described by reference to recorded documents as reflected in the Title Documents 541

accepted by Buyer in accordance with Record Title, 542

13.2. Distribution utility easements (including cable TV), 543

13.3. Those specifically described rights of third parties not shown by the public records of which Buyer has actual 544

knowledge and which were accepted by Buyer in accordance with Off-Record Title and New ILC or New Survey, 545

13.4. Inclusion of the Property within any special taxing district, and 546

13.5. Any special assessment if the improvements were not installed as of the date of Buyer’s signature hereon, whether 547

assessed prior to or after Closing, and 548

13.6. Other _______________________________________. 549

14. PAYMENT OF ENCUMBRANCES. Any encumbrance required to be paid will be paid at or before Closing from the 550

proceeds of this transaction or from any other source. 551

15. CLOSING COSTS, CLOSING FEE, ASSOCIATION FEES AND TAXES. 552

15.1. Closing Costs. Buyer and Seller must pay, in Good Funds, their respective closing costs and all other items required 553

to be paid at Closing, except as otherwise provided herein. 554

15.2. Closing Services Fee. The fee for real estate closing services must be paid at Closing by Buyer Seller 555

One-Half by Buyer and One-Half by Seller Other _______________________________________. 556

15.3. Status Letter and Record Change Fees. Any fees incident to the issuance of Association’s statement of 557

assessments (Status Letter) must be paid by None Buyer Seller One-Half by Buyer and One-Half by Seller. 558

Any record change fee assessed by the Association including, but not limited to, ownership record transfer fees regardless of name 559




or title of such fee (Association’s Record Change Fee) must be paid by None Buyer Seller One-Half by Buyer 560

and One-Half by Seller. 561

15.4. Local Transfer Tax. The Local Transfer Tax of ________% of the Purchase Price must be paid at Closing by 562


15.5. Private Transfer Fee. Private transfer fees and other fees due to a transfer of the Property, payable at Closing, such 564

as community association fees, developer fees and foundation fees, must be paid at Closing by None Buyer Seller 565

One-Half by Buyer and One-Half by Seller. The Private Transfer fee, whether one or more, is for the following association(s): 566

in the total amount of % of the Purchase Price or $_________________. 567

15.6. Water Transfer Fees. The Water Transfer Fees can change. The fees, as of the date of this Contract, do not exceed 568

$____________ for: 569

Water Stock/Certificates Water District 570

Augmentation Membership Small Domestic Water Company __________ 571

and must be paid at Closing by None Buyer Seller One-Half by Buyer and One-Half by Seller 572

15.7. Sales and Use Tax. Any sales and use tax that may accrue because of this transaction must be paid when due by 573


16. PRORATIONS. The following will be prorated to the Closing Date, except as otherwise provided: 575

16.1. Taxes. Personal property taxes, if any, special taxing district assessments, if any, and general real estate taxes for the 576

year of Closing, based on Taxes for the Calendar Year Immediately Preceding Closing Most Recent Mill Levy and 577

Most Recent Assessed Valuation, adjusted by any applicable qualifying seniors property tax exemption, qualifying disabled 578

veteran exemption or Other . 579

16.2. Rents. Rents based on Rents Actually Received Accrued. At Closing, Seller will transfer or credit to 580

Buyer the security deposits for all Leases assigned, or any remainder after lawful deductions, and notify all tenants in writing of 581

such transfer and of the transferee’s name and address. Seller must assign to Buyer all Leases in effect at Closing and Buyer must 582

assume Seller’s obligations under such Leases. 583

16.3. Association Assessments. Current regular Association assessments and dues (Association Assessments) paid in 584

advance will be credited to Seller at Closing. Cash reserves held out of the regular Association Assessments for deferred 585

maintenance by the Association will not be credited to Seller except as may be otherwise provided by the Governing Documents. 586

Buyer acknowledges that Buyer may be obligated to pay the Association, at Closing, an amount for reserves or working capital. 587

Any special assessment assessed prior to Closing Date by the Association will be the obligation of Buyer Seller. Except 588

however, any special assessment by the Association for improvements that have been installed as of the date of Buyer’s signature 589

hereon, whether assessed prior to or after Closing, will be the obligation of Seller. Seller represents that the Association 590

Assessments are currently payable at approximately $______________ per ______________ and that there are no unpaid regular 591

or special assessments against the Property except the current regular assessments and ______________________________. Such 592

assessments are subject to change as provided in the Governing Documents. Seller agrees to promptly request the Association to 593

deliver to Buyer before Closing Date a current Status Letter. 594

16.4. Other Prorations. Water and sewer charges, propane, interest on continuing loan, and _______________________. 595

16.5. Final Settlement. Unless otherwise agreed in writing, these prorations are final. 596

17. POSSESSION. Possession of the Property will be delivered to Buyer on Possession Date at Possession Time, subject to 597

the Leases as set forth in § 10.6.1.1. 598

599

If Seller, after Closing, fails to deliver possession as specified, Seller will be subject to eviction and will be additionally liable 600

to Buyer for payment of $______________ per day (or any part of a day notwithstanding § 18.1) from Possession Date and 601

Possession Time until possession is delivered. 602

Buyer represents that Buyer will occupy the Property as Buyer’s principal residence unless the following box is checked, 603

then Buyer Does Not represent that Buyer will occupy the Property as Buyer’s principal residence. 604

If the box is checked, Buyer and Seller agree to execute a Post-Closing Occupancy Agreement. 605

GENERAL PROVISIONS 606

18. DAY; COMPUTATION OF PERIOD OF DAYS, DEADLINE. 607

18.1. Day. As used in this Contract, the term “day” means the entire day ending at 11:59 p.m., United States Mountain 608

Time (Standard or Daylight Savings as applicable). 609

18.2. Computation of Period of Days, Deadline. In computing a period of days, when the ending date is not specified, 610

the first day is excluded and the last day is included (e.g., three days after MEC). If any deadline falls on a Saturday, Sunday or 611

federal or Colorado state holiday (Holiday), such deadline Will Will Not be extended to the next day that is not a 612

Saturday, Sunday or Holiday. Should neither box be checked, the deadline will not be extended. 613




19. CAUSES OF LOSS, INSURANCE; DAMAGE TO INCLUSIONS AND SERVICES; CONDEMNATION; AND 614

WALK-THROUGH. Except as otherwise provided in this Contract, the Property, Inclusions or both will be delivered in the 615

condition existing as of the date of this Contract, ordinary wear and tear excepted. 616

19.1. Causes of Loss, Insurance. In the event the Property or Inclusions are damaged by fire, other perils or causes of 617

loss prior to Closing in an amount of not more than ten percent of the total Purchase Price (Property Damage), and if the repair of 618

the damage will be paid by insurance (other than the deductible to be paid by Seller), then Seller, upon receipt of the insurance 619

proceeds, will use Seller’s reasonable efforts to repair the Property before Closing Date. Buyer has the Right to Terminate under 620

§ 25.1, on or before Closing Date if the Property is not repaired before Closing Date or if the damage exceeds such sum. Should 621

Buyer elect to carry out this Contract despite such Property Damage, Buyer is entitled to a credit at Closing for all insurance 622

proceeds that were received by Seller (but not the Association, if any) resulting from damage to the Property and Inclusions, plus 623

the amount of any deductible provided for in the insurance policy. This credit may not exceed the Purchase Price. In the event 624

Seller has not received the insurance proceeds prior to Closing, the parties may agree to extend the Closing Date to have the 625

Property repaired prior to Closing or, at the option of Buyer, (1) Seller must assign to Buyer the right to the proceeds at Closing, if 626

acceptable to Seller’s insurance company and Buyer’s lender; or (2) the parties may enter into a written agreement prepared by the 627

parties or their attorney requiring the Seller to escrow at Closing from Seller’s sale proceeds the amount Seller has received and 628

will receive due to such damage, not exceeding the total Purchase Price, plus the amount of any deductible that applies to the 629

insurance claim. 630

19.2. Damage, Inclusions and Services. Should any Inclusion or service (including utilities and communication 631

services), system, component or fixture of the Property (collectively Service) (e.g., heating or plumbing), fail or be damaged 632

between the date of this Contract and Closing or possession, whichever is earlier, then Seller is liable for the repair or replacement 633

of such Inclusion or Service with a unit of similar size, age and quality, or an equivalent credit, but only to the extent that the 634

maintenance or replacement of such Inclusion or Service is not the responsibility of the Association, if any, less any insurance 635

proceeds received by Buyer covering such repair or replacement. If the failed or damaged Inclusion or Service is not repaired or 636

replaced on or before Closing or possession, whichever is earlier, Buyer has the Right to Terminate under § 25.1, on or before 637

Closing Date, or, at the option of Buyer, Buyer is entitled to a credit at Closing for the repair or replacement of such Inclusion or 638

Service. Such credit must not exceed the Purchase Price. If Buyer receives such a credit, Seller's right for any claim against the 639

Association, if any, will survive Closing. Seller and Buyer are aware of the existence of pre-owned home warranty programs that 640

may be purchased and may cover the repair or replacement of such Inclusions. 641

19.3. Condemnation. In the event Seller receives actual notice prior to Closing that a pending condemnation action may 642

result in a taking of all or part of the Property or Inclusions, Seller must promptly notify Buyer, in writing, of such condemnation 643

action. Buyer has the Right to Terminate under § 25.1, on or before Closing Date, based on such condemnation action, in Buyer’s 644

sole subjective discretion. Should Buyer elect to consummate this Contract despite such diminution of value to the Property and 645

Inclusions, Buyer is entitled to a credit at Closing for all condemnation proceeds awarded to Seller for the diminution in the value 646

of the Property or Inclusions but such credit will not include relocation benefits or expenses, or exceed the Purchase Price. 647

19.4. Walk-Through and Verification of Condition. Buyer, upon reasonable notice, has the right to walk through the 648

Property prior to Closing to verify that the physical condition of the Property and Inclusions complies with this Contract. 649

20. RECOMMENDATION OF LEGAL AND TAX COUNSEL. By signing this Contract, Buyer and Seller acknowledge 650

that the respective broker has advised that this Contract has important legal consequences and has recommended the examination 651

of title and consultation with legal and tax or other counsel before signing this Contract. 652

21. TIME OF ESSENCE, DEFAULT AND REMEDIES. Time is of the essence for all dates and deadlines in this Contract. 653

This means that all dates and deadlines are strict and absolute. If any payment due, including Earnest Money, is not paid, honored 654

or tendered when due, or if any obligation is not performed timely as provided in this Contract or waived, the non-defaulting 655

party has the following remedies: 656

21.1. If Buyer is in Default: 657

21.1.1. Specific Performance. Seller may elect to cancel this Contract and all Earnest Money (whether or not paid 658

by Buyer) will be paid to Seller and retained by Seller. It is agreed that the Earnest Money is not a penalty, and the Parties agree 659

the amount is fair and reasonable. Seller may recover such additional damages as may be proper. Alternatively, Seller may elect 660

to treat this Contract as being in full force and effect and Seller has the right to specific performance or damages, or both. 661

21.1.2. Liquidated Damages, Applicable. This § 21.1.2 applies unless the box in § 21.1.1. is checked. Seller 662

may cancel this Contract. All Earnest Money (whether or not paid by Buyer) will be paid to Seller, and retained by Seller. It is 663

agreed that the Earnest Money specified in § 4.1 is LIQUIDATED DAMAGES, and not a penalty, which amount the parties agree 664

is fair and reasonable and (except as provided in §§ 10.4, 22, 23 and 24), said payment of Earnest Money is SELLER’S ONLY 665

REMEDY for Buyer’s failure to perform the obligations of this Contract. Seller expressly waives the remedies of specific 666

performance and additional damages. 667

21.2. If Seller is in Default: Buyer may elect to treat this Contract as canceled, in which case all Earnest Money received 668

hereunder will be returned and Buyer may recover such damages as may be proper. Alternatively, Buyer may elect to treat this 669

Contract as being in full force and effect and Buyer has the right to specific performance or damages, or both. 670




22. LEGAL FEES, COST AND EXPENSES. Anything to the contrary herein notwithstanding, in the event of any arbitration 671

or litigation relating to this Contract, prior to or after Closing Date, the arbitrator or court must award to the prevailing party all 672

reasonable costs and expenses, including attorney fees, legal fees and expenses. 673

23. MEDIATION. If a dispute arises relating to this Contract, (whether prior to or after Closing) and is not resolved, the parties 674

must first proceed, in good faith, to mediation. Mediation is a process in which the parties meet with an impartial person who helps 675

to resolve the dispute informally and confidentially. Mediators cannot impose binding decisions. Before any mediated settlement is 676

binding, the parties to the dispute must agree to the settlement, in writing. The parties will jointly appoint an acceptable mediator 677

and will share equally in the cost of such mediation. The obligation to mediate, unless otherwise agreed, will terminate if the entire 678

dispute is not resolved within thirty days of the date written notice requesting mediation is delivered by one party to the other at 679

that party’s last known address (physical or electronic as provided in § 27). Nothing in this Section prohibits either party from 680

filing a lawsuit and recording a lis pendens affecting the Property, before or after the date of written notice requesting mediation. 681

This section will not alter any date in this Contract, unless otherwise agreed. 682

24. EARNEST MONEY DISPUTE. Except as otherwise provided herein, Earnest Money Holder must release the Earnest 683

Money following receipt of written mutual instructions, signed by both Buyer and Seller. In the event of any controversy regarding 684

the Earnest Money, Earnest Money Holder is not required to release the Earnest Money. Earnest Money Holder, in its sole 685

subjective discretion, has several options: (1) wait for any proceeding between Buyer and Seller; (2) interplead all parties and 686

deposit Earnest Money into a court of competent jurisdiction, (Earnest Money Holder is entitled to recover court costs and 687

reasonable attorney and legal fees incurred with such action); or (3) provide notice to Buyer and Seller that unless Earnest Money 688

Holder receives a copy of the Summons and Complaint or Claim (between Buyer and Seller) containing the case number of the 689

lawsuit (Lawsuit) within one hundred twenty days of Earnest Money Holder’s notice to the parties, Earnest Money Holder is 690

authorized to return the Earnest Money to Buyer. In the event Earnest Money Holder does receive a copy of the Lawsuit, and has 691

not interpled the monies at the time of any Order, Earnest Money Holder must disburse the Earnest Money pursuant to the Order 692

of the Court. The parties reaffirm the obligation of Mediation. This Section will survive cancellation or termination of this 693

Contract. 694

25. TERMINATION. 695

25.1. Right to Terminate. If a party has a right to terminate, as provided in this Contract (Right to Terminate), the 696

termination is effective upon the other party’s receipt of a written notice to terminate (Notice to Terminate), provided such written 697

notice was received on or before the applicable deadline specified in this Contract. If the Notice to Terminate is not received on or 698

before the specified deadline, the party with the Right to Terminate accepts the specified matter, document or condition as 699

satisfactory and waives the Right to Terminate under such provision. 700

25.2. Effect of Termination. In the event this Contract is terminated, all Earnest Money received hereunder will be 701

returned and the parties are relieved of all obligations hereunder, subject to §§ 10.4, 22, 23 and 24. 702

26. ENTIRE AGREEMENT, MODIFICATION, SURVIVAL; SUCCESSORS. This Contract, its exhibits and specified 703

addenda, constitute the entire agreement between the parties relating to the subject hereof, and any prior agreements pertaining 704

thereto, whether oral or written, have been merged and integrated into this Contract. No subsequent modification of any of the 705

terms of this Contract is valid, binding upon the parties, or enforceable unless made in writing and signed by the parties. Any right 706

or obligation in this Contract that, by its terms, exists or is intended to be performed after termination or Closing survives the 707

same. Any successor to a Party receives the predecessor’s benefits and obligations of this Contract. 708

27. NOTICE, DELIVERY, AND CHOICE OF LAW. 709

27.1. Physical Delivery and Notice. Any document, or notice to Buyer or Seller must be in writing, except as provided in 710

§ 27.2, and is effective when physically received by such party, any individual named in this Contract to receive documents or 711

notices for such party, the Broker, or Brokerage Firm of Broker working with such party (except any notice or delivery after 712

Closing must be received by the party, not Broker or Brokerage Firm). 713

27.2. Electronic Notice. As an alternative to physical delivery, any notice, may be delivered in electronic form to Buyer 714

or Seller, any individual named in this Contract to receive documents or notices for such party, the Broker or Brokerage Firm of 715

Broker working with such party (except any notice or delivery after Closing must be received by the party; not Broker or 716

Brokerage Firm) at the electronic address of the recipient by facsimile, email or ______________________________________. 717

27.3. Electronic Delivery. Electronic Delivery of documents and notice may be delivered by: (1) email at the email 718

address of the recipient, (2) a link or access to a website or server provided the recipient receives the information necessary to 719

access the documents, or (3) facsimile at the Fax No. of the recipient. 720

27.4. Choice of Law. This Contract and all disputes arising hereunder are governed by and construed in accordance with 721

the laws of the State of Colorado that would be applicable to Colorado residents who sign a contract in Colorado for real property 722

located in Colorado. 723




28. NOTICE OF ACCEPTANCE, COUNTERPARTS. This proposal will expire unless accepted in writing, by Buyer and 724

Seller, as evidenced by their signatures below, and the offering party receives notice of such acceptance pursuant to § 27 on or 725

before Acceptance Deadline Date and Acceptance Deadline Time. If accepted, this document will become a contract between 726

Seller and Buyer. A copy of this Contract may be executed by each party, separately, and when each party has executed a copy 727

thereof, such copies taken together are deemed to be a full and complete contract between the parties. 728

29. GOOD FAITH. Buyer and Seller acknowledge that each party has an obligation to act in good faith including, but not 729

limited to, exercising the rights and obligations set forth in the provisions of Financing Conditions and Obligations, Title 730

Insurance, Record Title and Off-Record Title, New ILC, New Survey and Property Disclosure, Inspection, Indemnity, 731

Insurability, Due Diligence, Buyer Disclosure and Source of Water. 732

ADDITIONAL PROVISIONS AND ATTACHMENTS 733

30. ADDITIONAL PROVISIONS. (The following additional provisions have not been approved by the Colorado Real Estate 734

Commission.) 735

736

737

738

739

740

741

742

743

31. ATTACHMENTS. 744

31.1. The following attachments are a part of this Contract: 745

746

31.1.1. Post-Closing Occupancy Agreement. If the Post-Closing Occupancy Agreement box is checked in § 17 the Post-747

Closing Occupancy Agreement is attached. 748

749

750

751

31.2. The following disclosure forms are attached but are not a part of this Contract: 752

753

754

755

756

SIGNATURES 757

758



Address: Address:


Fax No.: Fax No.:


[NOTE: If this offer is being countered or rejected, do not sign this document. Refer to § 32] 759






Address: Address:


Fax No.: Fax No.:


760

32. COUNTER; REJECTION. This offer is Countered Rejected. 761

Initials only of party (Buyer or Seller) who countered or rejected offer 762

END OF CONTRACT TO BUY AND SELL REAL ESTATE 763


(To be completed by Broker working with Buyer)







Broker is working with Buyer as a Buyer’s Agent Seller’s Agent Transaction-Broker in this transaction.


Brokerage Firm’s compensation or commission is to be paid by Listing Brokerage Firm Buyer Other .


Broker’s Name:


Address:

Phone No.:

Fax No.:

Email Address:


(To be completed by Broker working with Seller)







Broker is working with Seller as a Seller’s Agent Buyer’s Agent Transaction-Broker in this transaction.


Brokerage Firm’s compensation or commission is to be paid by Seller Buyer Other .





Broker’s Name:


Address:

Phone No.:

Fax No.:

Email Address:

764



MCDOUGAL TO SMITH – COUNTERPROPOSAL After receiving the offer on 825 Marble, the sellers decide that they are unwilling to accept the offer as it is written. Their two main objections are that the price is too low, and the buyers are not putting enough money down. They would be willing to accept no less than $100,500, as a sale price, but will accept no less than $10,000 cash at closing. All other terms are acceptable. They instruct you to fill out a counterproposal, which you do. You present this to the buyer’s broker, and the buyers sign it without any further discussion.

NOTE: This Sales Contract problem is intended as a Practical (“Real – Life”) Example, an illustration of how a real closing would work, and a sample of the kinds of forms you may see. Since the student is not expected to spend a great deal of time on completing the contract problems in this Closings course, an answer key is not provided. Instead, you should focus on completing the worksheets/settlement statements, as you are expected to know and will be heavily tested on debits and credits, how to calculate prorations, as all other Closings concepts.



CP40-6-15. COUNTERPROPOSAL Page 1 of 3


(CP40-6-15) (Mandatory 1-16) 2

3



6

COUNTERPROPOSAL 7

8

Date: 9

10

1. This Counterproposal supersedes and replaces any previous counterproposal. This Counterproposal amends the proposed 11

contract dated (Contract), between 12

(Seller), and (Buyer), relating to the sale and purchase 13

of the following legally described real estate in the County of , Colorado: 14

15

16

17

known as No. (Property). 18


20

NOTE: If the table is omitted, or if any item is left blank or is marked in the “No Change” column, it means no change to 21

the corresponding provision of the Contract. If any item is marked in the “Deleted” column, it means that the 22

corresponding provision of the Contract to which reference is made is deleted. 23

24

2. § 3. DATES AND DEADLINES. [Note: This table may be omitted if inapplicable.] 25

Item No.

Reference

Event

Date or

Deadline

No

Change

Deleted


Title












Loan and Credit









Appraisal




Survey




Ccnicholson

Typewritten Text


Ccnicholson

Typewritten Text


Item No.

Reference

Event

Date or

Deadline

No

Change

Deleted










31 § 10.6 Environmental Inspection Objection Deadline CBS2, 3, 4

32 § 10.6 ADA Evaluation Objection Deadline CBS2, 3, 4


34 § 11.1 Tenant Estoppel Statements Deadline CBS2, 3, 4

35 § 11.2 Tenant Estoppel Statements Objection Deadline CBS2, 3, 4





3. § 4. PURCHASE PRICE AND TERMS. [Note: This table may be deleted if inapplicable.] 26

The Purchase Price set forth below is payable in U.S. Dollars by Buyer as follows: 27




3 § 4.5 New Loan $




7

8


10 TOTAL $ $

28

4. ATTACHMENTS. The following are a part of this Counterproposal: 29

30

31

32

Note: The following disclosure forms are attached but are not a part of this Counterproposal: 33

34

35

36

5. OTHER CHANGES. 37

38

39

40

6. ACCEPTANCE DEADLINE. This Counterproposal expires unless accepted in writing by Seller and Buyer as evidenced 41

by their signatures below and the offering party to this document receives notice of such acceptance on or before 42

. 43

Date Time 44

45




If accepted, the Contract, as amended by this Counterproposal, will become a contract between Seller and Buyer. All other terms 46

and conditions of the Contract remain the same. 47

48



Address: Address:


Fax No.: Fax No.:




Address: Address:


Fax No.: Fax No.:


Note: When this Counterproposal form is used, the Contract is not to be signed by the party initiating this Counterproposal. 49

Brokers must complete and sign the Broker’s Acknowledgments and Compensation Disclosure portion of the Contract. 50

51



MCDOUGAL TO SMITH – REVISED CONTRACT SECOND COUNTERPROPOSAL

Unfortunately, after getting the counterproposal signed and everything prepared for closing, the seller’s loan company refuses to let the potential buyers, the Smiths, assume the existing loan. So the deal falls through. On March 8, the buyers, who still want the house, present a new offer on the same terms as above, except that they will secure a new 90% loan at 9% interest, fully amortized over a 30- year period. Principal and interest on this loan will be approximately $690.00 per month. The buyers will accept up to 1% origination, and 1 discount point. The assumption and carry-back provisions of the contract will no longer apply. Loan application must be made within 10 days from acceptance of the contract, and loan approval should be no later than April 1. Title deadline is to be March 15, and notice of objection shall be given by buyer to title matters no later than March 20. Date of closing shall be April 1 and be conducted by a closing company designated by Awesome Realty. All other costs and dates shall remain the same as in the previous offer from buyers. Draw up the second counterproposal. This offer is accepted by the sellers. Prepare a Worksheet for Real Estate Settlement, based on these and the facts contained in the Closing Problem, following.

NOTE: This Sales Contract problem is intended as a Practical (“Real – Life”) Example, an illustration of how a real closing would work, and a sample of the kinds of forms you may see. Since the student is not expected to spend a great deal of time on completing the contract problems in this Closings course, an answer key is not provided. Instead, you should focus on completing the worksheets/settlement statements, as you are expected to know and will be heavily tested on debits and credits, how to calculate prorations, as all other Closings concepts.





(CP40-6-15) (Mandatory 1-16) 2

3



6

COUNTERPROPOSAL 7

8

Date: 9

10

1. This Counterproposal supersedes and replaces any previous counterproposal. This Counterproposal amends the proposed 11

contract dated (Contract), between 12

(Seller), and (Buyer), relating to the sale and purchase 13

of the following legally described real estate in the County of , Colorado: 14

15

16

17

known as No. (Property). 18


20

NOTE: If the table is omitted, or if any item is left blank or is marked in the “No Change” column, it means no change to 21

the corresponding provision of the Contract. If any item is marked in the “Deleted” column, it means that the 22

corresponding provision of the Contract to which reference is made is deleted. 23

24

2. § 3. DATES AND DEADLINES. [Note: This table may be omitted if inapplicable.] 25

Item No.

Reference

Event

Date or

Deadline

No

Change

Deleted


Title












Loan and Credit









Appraisal




Survey




Ccnicholson

Typewritten Text


Ccnicholson

Typewritten Text


Item No.

Reference

Event

Date or

Deadline

No

Change

Deleted










31 § 10.6 Environmental Inspection Objection Deadline CBS2, 3, 4

32 § 10.6 ADA Evaluation Objection Deadline CBS2, 3, 4


34 § 11.1 Tenant Estoppel Statements Deadline CBS2, 3, 4

35 § 11.2 Tenant Estoppel Statements Objection Deadline CBS2, 3, 4





3. § 4. PURCHASE PRICE AND TERMS. [Note: This table may be deleted if inapplicable.] 26

The Purchase Price set forth below is payable in U.S. Dollars by Buyer as follows: 27




3 § 4.5 New Loan $




7

8


10 TOTAL $ $

28

4. ATTACHMENTS. The following are a part of this Counterproposal: 29

30

31

32

Note: The following disclosure forms are attached but are not a part of this Counterproposal: 33

34

35

36

5. OTHER CHANGES. 37

38

39

40

6. ACCEPTANCE DEADLINE. This Counterproposal expires unless accepted in writing by Seller and Buyer as evidenced 41

by their signatures below and the offering party to this document receives notice of such acceptance on or before 42

. 43

Date Time 44

45




If accepted, the Contract, as amended by this Counterproposal, will become a contract between Seller and Buyer. All other terms 46

and conditions of the Contract remain the same. 47

48



Address: Address:


Fax No.: Fax No.:




Address: Address:


Fax No.: Fax No.:


Note: When this Counterproposal form is used, the Contract is not to be signed by the party initiating this Counterproposal. 49

Brokers must complete and sign the Broker’s Acknowledgments and Compensation Disclosure portion of the Contract. 50

51



COLORADO CLOSINGS - MacIntosh Real Estate · PDF fileCOLORADO CLOSINGS (24 Credit Hours) ......

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