The process is like those in other states if you want to sell land in Colorado without a broker or real estate agent. However, there are some unique challenges you will need to be aware of.
Here are 4 Things You’ll Need to Sell Land in Colorado on Your Own…
- A Purchase and Sale Agreement
- A Title Company
- A Clear Title
- A Deed (the parcel number can be added but is not required)
- Land Disclosure Form
1. A Purchase and Sale Agreement can tell you…
- The land address or geographical description
- The exact name of the property owners and their mailing address
- The exact name of the property buyers and their mailing address
- The purchase/sales price of the property
- The intended closing date
The Purchase and Sale Agreement is a contract between you and the person intending to buy your land. It stipulates the address of the land and the period for which the contract is valid.
Although some Purchase and Sale Agreements for houses are lengthy, land agreements can be relatively straightforward and short and need not be more than a page.
The agreement will need to be signed by both the buyer and seller. Once signed, the title company can start its process (more of this later). Instead of an agent, the title company acts as the middleman between the seller and the buyer.
2. A Title Company
A title company’s primary job is determining if the property title is “unencumbered.” This means that no other person has any ownership rights to the property, and there are no liens on it.
A lien allows someone else (or a company) to take the property or prevent its sale until a debt is paid. Thus, a title conducts a title search to ensure the property is free and clear of any liens and encumbrances that could prevent its sale.
In addition, the title company will prepare and provide both the buyers and sellers with relevant documents for the closing, handle all the paperwork, coordinate the closing and organize settlements or lien pay-offs to enable the closing to proceed. In this respect, the title company helps and protects both the buyers and the sellers.
3. A Clear Title
A clear title means the title to the land has no encumbrances or liens and is ready to close.
4. A Deed
A deed differs from a title.
A deed is a legal document transferring the ownership (title) from one property owner to another.
The seller (known) and the grantor signs the deed transferring the property rights.
In many states the Parcel ID must be placed on the deed, but this is not the case in Colorado. A Colorado deed must, however, meet specific requirements.
5. Land Disclosure Form
A Seller’s Property Disclosure Form allows the seller to disclose the physical conditions of a property or its past use.
If the seller does not know all the information requested, they can state that without penalty. However, they might be liable if they knowingly disclose wrong or misleading information.
One of the unique aspects of a Colorado disclosure is in Section N5, where the seller must disclose if the “Property was previously used as a methamphetamine laboratory and not remediated to state standards.”
Though this would usually apply to a physical building, as it is in the “General” section, it is reasonable to assume that the landowner would need to fill this in as well.
Selling vacant land in Colorado is quite simple, providing you understand the unique requirements in the disclosure.
Another thing to be aware of is the weather. Most real estate transactions occur in warmer months, as any inspections and appraisals are challenging to conduct in cold weather due to the snow.