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What Contingencies Are Common in Colorado?

In Colorado real estate transactions, the most common contingencies are inspection, financing, appraisal, and title—standard protections that give buyers an out if major issues arise during due diligence. With 15+ years helping clients through thousands of deals in Denver real estate, I’ve seen these clauses safeguard everyone while keeping most contracts on track in the balanced Colorado housing market.

Core Contingencies Explained

Inspection Contingency: Buyers have 10-15 days to conduct a home inspection and negotiate repairs or credits. This covers structural, systems, and safety issues, with special focus on Colorado-specific concerns like radon, sewer lines, and foundation stability in areas prone to clay soil movement. It’s nearly universal unless waived in ultra-competitive bidding wars.

Financing Contingency: Protects buyers if their loan falls through due to credit, income verification, or rate changes. In today’s mid-6% rate environment, this remains critical, typically lasting until closing with proof of pre-approval upfront.

Appraisal Contingency: Ensures the home appraises at or above purchase price. If it comes in low, buyers can renegotiate, seek a second appraisal, or exit without penalty. Common in Highlands Ranch real estate and Littleton real estate where values fluctuate with market cycles.

Title Contingency: Verifies clear ownership via title search, flagging liens, easements, or disputes. Colorado’s use of title insurance makes this routine, with extended coverage often recommended for older Denver properties.

Less frequent but growing: HOA review for condos/townhomes in places like Highlands Ranch, sale-of-home for relocating buyers, and environmental for flood/wildfire zones.

Why They Matter in Colorado

Colorado contracts emphasize a “due diligence” period rather than rigid escrow, giving flexibility but requiring clear timelines. Sellers disclose known defects upfront via the Seller’s Property Disclosure, reducing surprises. In my experience, skipping contingencies risks post-close disputes, especially with HOAs enforcing strict covenants or local laws on septic/well systems in rural pockets.

Market shifts influence usage—hot seller’s markets saw waivers, but current buyer leverage brings them back strong.

Practical Advice for Smooth Deals

I coach clients to customize thoughtfully:

• Buyers: Build in 12-14 days for inspections; add radon/sewer scopes proactively. Get lender pre-qual detailed early.
• Sellers: Offer pre-inspections and repair credits to attract serious offers. Review HOA docs thoroughly.
• Everyone: Use extensions sparingly; communicate openly to preserve goodwill.

These steps, rooted in Colorado real estate laws, turn potential pitfalls into confident closings. Many clients who’ve leaned on this guidance become long-term friends.

If you’d like honest guidance, current market insight, or a no-pressure conversation about contingencies in your situation, reach out—I’m here to help. Visit www.MileHighHomeGroup.net to search properties, explore Denver, learn more about me, and connect.