Colorado Springs Real Estate Blog
Changes that may affect investors purchasing homes in foreclosure
If you plan on purchasing a home in foreclosure and do not plan on living in the home as your principal residence, you may be affected by the Colorado Foreclosure Protection Act.
If a property falls under the Colorado Foreclosure Protection Act, investors are required to utilize a different contract when purchasing a home in foreclosure. According the Contract to Buy and Sell Real Estate, the Colorado Foreclosure Protection Act applies when: (1) the Property is residential, (2) the property is Seller’s principal place of residence, (3) any loan secured by the Property is at least thirty days delinquent or in default, (4) Buyer does not reside in the Property for at least one year and (5) Buyer is subject to the Act.
Furthermore, there are six conditions that the buyer and seller must agree to; a couple of them include: the seller does not have the option or right to repurchase the property and there cannot be any rental agreements or leases for the Property between the buyer and seller.
The seller reserves the right to cancel the contract for the sale of their house without penalty within the time frame specified in the contract. The seller has the right to think about the contract for at least three business days unless there is not enough time due to the home going to foreclosure sale. In that instance, the seller only has until noon the day before the foreclosure sale.
There is also a Seller Warning form that must be filled out by the seller indicating that the seller understands the mortgage is his/her responsibility and that the buyer will not assume any present mortgages, liens, etc… encumbering the property.
If you are an investor, it is wise to work with a Realtor when purchasing a home in foreclosure. If you have any questions about the Colorado Foreclosure Protection Act, please contact your Colorado Springs Real Estate Agent, Patricia Beck.