Colorado Seller's Disclosure of Financing Terms for Residential Property in connection with Contract or Agreement for Deed a/k/a Land Contract
What is this form?
The Seller's Disclosure of Financing Terms for Residential Property is a legal document that provides essential details about the financing arrangements involved in a Contract for Deed, also known as a Land Contract. This form differs from other real estate agreements by specifically outlining payment terms, interest rates, and potential penalties in a clear manner, ensuring that the purchaser is well-informed before signing the agreement.
Key parts of this document
- Purchase price of the property.
- Interest rate charged under the Contract for Deed.
- Estimate of total interest charged over the contract term.
- Total principal and interest to be paid under the contract.
- Details on any late charges that may apply.
- Information on prepayment penalties, if applicable.
When to use this form
This form should be used when a seller and purchaser agree to terms under a Contract for Deed to purchase residential property. It is essential when the seller is financing the purchase directly and needs to disclose vital financial information to the purchaser upfront.
Intended users of this form
- Property sellers who are financing the sale through a Contract for Deed.
- Homebuyers considering a seller-financed purchase of residential real estate.
- Real estate agents or attorneys representing either party in the transaction.
Instructions for completing this form
- Identify the parties involved in the transaction (seller and purchaser).
- Specify the property address associated with the Contract for Deed.
- Enter the purchase price of the property.
- Complete the interest rate and any applicable charges, including late fees.
- Indicate whether there are prepayment penalties.
- All parties should sign and date the document to validate it.
Notarization guidance
This form does not typically require notarization unless specified by local law. Ensure to check your local regulations to determine if notarization is necessary for your transaction.
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Make edits, fill in missing information, and update formatting in US Legal Forms—just like you would in MS Word.
Download a copy, print it, send it by email, or mail it via USPS—whatever works best for your next step.
Sign and collect signatures with our SignNow integration. Send to multiple recipients, set reminders, and more. Go Premium to unlock E-Sign.
If this form requires notarization, complete it online through a secure video call—no need to meet a notary in person or wait for an appointment.
We protect your documents and personal data by following strict security and privacy standards.
Typical mistakes to avoid
- Failing to specify the correct interest rate.
- Omitting late charges or fees that may apply.
- Not including all required signatures.
- Using outdated forms that do not comply with current laws.
Benefits of completing this form online
- Convenience of downloading and completing the form at your pace.
- Editability allows for easy updates to terms before finalizing.
- Access to forms drafted by licensed attorneys for legal reliability.
Key takeaways
- The Seller's Disclosure of Financing Terms is necessary for transactions involving contracts for deed.
- It provides essential financial information to the purchaser.
- Completing this form accurately helps prevent future disputes over payment terms.
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FAQ
Step 1 Get the Original Purchase Agreement. The buyer and seller should get a copy of the original purchase agreement. Step 2 Write the Addendum. Complete a blank addendum (Adobe PDF, Microsoft Word (. Step 3 Parties Agree and Sign. Step 4 Add to the Purchase Agreement.
A: Some states require just about all sellers to provide a seller disclosure form to a buyer, but in some cases, a seller is not required to deliver the disclosure. For example, if the seller's home is part of an estate or a foreclosure sale by a sheriff or court, a seller disclosure form may not be required.
If a seller fails to disclose, or actively conceals, problems that affect the value of the property; they are violating the law, and may be subject to a lawsuit for recovery of damages based on claims of fraud and deceit, misrepresentation and/or breach of contract.
What's a Seller Addendum? It's an addition to the normal sale and purchase agreement that severely limits Seller's liability during and after the sale process. For example, the Seller Addendum might limit damages to which Buyer is entitled in the event Seller fails to disclose some problem with the property.
Complete the addendum, including your name, the purchaser's name and a description of the property. Include the type of financing that you are providing, such as first mortgage, second mortgage or deed of trust. List the terms of the loan.
Place the name(s) of the seller(s) on the contract. Write the date of the offer on the agreement. Add the purchase price to the contract. Include a request for the seller to provide a clear title and deed for the property.
In seller financing, the seller takes on the role of the lender. Instead of giving cash to the buyer, the seller extends enough credit to the buyer for the purchase price of the home, minus any down payment. The buyer and seller sign a promissory note (which contains the terms of the loan).
The seller financing addendum outlines the terms at which the seller of the property agrees to loan the money to the buyer in order to purchase their property.Once complete, this addendum should be signed and attached to the purchase agreement made between the parties.
If your seller simply will not fill out the form after you advise them of the requirement to do so, you can have them mark refused on the form, and then provide that to the buyer.
