Buying and Selling Real Estate: Legal Considerations and Tips
As any real estate attorney in Denver, CO, knows, the city has an extremely competitive (and tricky) housing market. The job market is strong, and demand for housing is high, but area inventory is limited. In other words, it’s a seller’s market. This tends to benefit homeowners while challenging homebuyers.
Like any city, Denver has numerous laws and regulations that govern real estate sales. The frantic pace of the local housing market shouldn’t prevent you from fully understanding your legal rights and obligations when buying and selling real estate.
An experienced local real estate attorney can help cover your bases during real estate transactions. In the meantime, this post provides an overview of legal considerations and tips when buying and selling real estate in Denver.
Five Legal Considerations in the Denver Real Estate Market
Several government entities shape the real estate landscape in Denver, including the State of Colorado, the Denver Mayor’s Office, and the Denver City Council. This multifaceted approach to legislation ensures residents’ comfort and safety while allowing for unique neighborhood differences.
When buying and selling real estate in the city, you’ll need to know about the following:
1. Zoning Regulations
Denver is divided into several zones: residential, commercial, mixed-use, and industrial. These zoning districts influence the types and uses of buildings and the heights and density of developments allowed. Zoning laws control whether you can build or change certain aspects of your property.
In historical neighborhoods, for example, historical preservation goals may require you to follow strict guidelines when renovating. Of course, these zones may change as real estate market trends change, so it’s important to stay up to date when buying and selling real estate.
2. Building Codes
Similarly, buyers must understand local building codes when planning to develop or renovate properties. Although many of Denver’s building codes are based on international standards, they are tailored to the local environment. Whether constructing an entirely new home or simply updating a kitchen, you must adhere to stringent safety standards and permit requirements.
3. Homeowners Associations (HOAs)
HOAs oversee many neighborhoods in Denver. These organizations impose regulations and enforce rules to maintain a community’s quality of life and property values. However, they also charge fees and limit what you can do with your property. A smart piece of homebuyer advice is to familiarize yourself with local HOA rules before purchasing a property.
4. Fair Housing Laws
Both federal and state fair housing laws are designed to help ensure fair treatment in Denver real estate purchases. Direct housing providers and other entities (such as landlords, real estate companies, lending institutions, and municipalities) are generally prohibited from discriminating based on race, color, religion, sex, disability, or familial status.
5. Environmental Regulations
Denver uses many tools to reduce the negative environmental impact of new buildings and renovations. The city’s Green Buildings Ordinance requires property owners and developers to implement sustainable development practices. While this ordinance doesn’t apply to single-family homes, property developers and owners should understand the applicable environmental regulations.
Five Legal Considerations in Denver Real Estate Transactions
In addition to considering the above factors, you must familiarize yourself with the legal requirements of real estate transactions when buying and selling property.
1. Disclosures
No guide to selling property would be complete without a discussion of disclosures. Colorado real estate law requires sellers to disclose known defects or issues to prospective buyers. This requirement helps protect buyers against unforeseen complications and protect sellers against future legal troubles.
Common disclosures include the following:
Structural problems with the roof, foundation, or other areas
Functionality of the heating, plumbing, and electrical systems
Hazardous materials like lead and asbestos
Pest infestations
Water damage
Use of the property for methamphetamine production
2. Contracts
After your property-selling strategies (or home-buying tips) have succeeded, it’s time to sign the contract. Real estate contracts are complex legal documents that should protect your interests and comply with local and state regulations.
There are many clauses, terms, and contingencies to know about, but these three are key:
- Financing contingency: This indicates that the buyer can rescind their offer without penalty if they don’t secure financing.
- Home inspection contingency: This provision allows the buyer to withdraw from the contract or negotiate repairs if a property inspection discovers significant issues.
- Title clause: A clear title assures the buyer that the seller has the legal right to sell the property without any undisclosed liens or claims.
3. Appraisals
Property appraisals determine the fair market value of a home or building. Knowing how much a property is worth helps buyers negotiate and secure a reasonable purchase price.
If the appraisal value is low, buyers can attempt to renegotiate the purchase price with the seller. They may also challenge the appraisal by presenting data from comparable properties. A real estate attorney can offer helpful advice on the right course of action.
4. Inspections
Nearly every real estate sales contract includes a property inspection provision. Not all defects are visible during a typical home viewing, so buyers will hire a qualified inspector to inspect the property and identify any issues. Inspection reports may impact the purchase decision, so both sellers and buyers must be prepared for the outcome.
5. Closing
If all goes well, buyers and sellers agree on a purchase price and prepare for the ownership transfer. The closing process involves completing paperwork, signing documents, transferring funds, and recording the deed. Closing a real estate transaction requires careful attention to numerous legal and financial considerations.
The assistance of a real estate attorney is invaluable.
Need Real Estate Legal Advice in Denver? Contact Us Today
Now that you’re familiar with the legal considerations involved in buying and selling real estate, you may be thinking about hiring a real estate attorney. If so, contact Thomas N. Scheffel & Associates, P.C., today. Our skilled legal team will help protect your rights, advocate for your interests, and prevent complications in real estate transactions.
Call (303) 759-5937 or contact us online to schedule an appointment.