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Consumer Tips, Tools and Resources

Our mission as a division of the Colorado Department of Regulatory Agencies is to serve the public through regulation and enforcement of Colorado Law. The Division of Real Estate is the licensing, regulation and enforcement agency for the real estate brokerage, appraisal and mortgage broker industries.

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  • Verbal only agreements or any agreement not documented in writing.
  • Unlicensed individuals. Check our publicly searchable database to ensure your mortgage loan originator, real estate broker and/or appraiser are properly licensed and in good standing.
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Choosing a real estate broker is a key element in a successful real estate transaction. The largest single financial transaction that a family makes is often the purchase or sale of the family home. The importance of that real estate transaction cannot be minimized. The assistance of a competent real estate broker can go a long way towards making this most significant purchase a smooth and happy one. Deciding how to proceed when you decide to buy or sell real property should be a result of careful consideration.

Choosing a real estate broker is a subjective process. Certain criteria should be established in your search for a broker to assist you in achieving your goals for any real estate transaction. Consider your own real estate knowledge and experience and what type of transaction (raw ground, condominium, time share interest, etc.) you contemplate when deciding which real estate broker can best serve your needs. For instance, your own lack of practical experience can be offset by a broker’s specialized experience in certain types of transactions. If you have experience in single family home purchases, you might be comfortable with a broker with general residential knowledge and experience rather than a specialization.

It is good practice to interview more than one broker when you do not have the advantage of a successful track record with a broker or when a different or more complex type of transaction is intended. Friends and neighbors are a good starting point for recommendations both pro and con for individual licensees. One good or bad report on a licensee is only the first step in sizing up potential brokerage assistance. You should follow up with more opinions whenever possible.

Always remember that brokerage fees are negotiable between you and the licensee!

Check to see if a broker is licensed and whether or not there is a record of discipline.

Information on whether or not a company or an individual is licensed, as well as information on whether or not a disciplinary record is available, can be obtained by using the Division of Real Estate website

License Database Search.


Definition of a Brokerage Relationship: A working relationship between a licensed real estate broker and a buyer or seller to engage the services of the licensed broker on behalf of the buyer or seller in acquiring or marketing real property. This relationship may be a limited agency, or a non-agency, according to the agreement of the parties. In the absence of a signed agreement regarding the brokerage relationship, the default position under Colorado License Law is "transaction-brokerage".

Prior to enactment of The Brokerage Relationships Act in January of 1994, every licensed real estate broker or salesperson in Colorado working to sell a listed property was assumed to be an agent of the seller. As agents of the seller, licensees working with a seller or a buyer owed the same duties of loyalty and fidelity to the seller. The current law recognizes and defines different types of relationships between licensees and buyers and sellers such as single agency (buyer agency or seller agency), and the transaction-broker relationship.

Colorado real estate licensees are required by law to disclose, in writing, the nature of the working relationship to buyers and sellers and the level of service they will provide. A buyer or seller has the right to choose what type of representation best meets their needs, just as they have the right to choose a broker to represent them in a real estate transaction.


DD25-1-03 Commission approved definitions of the various brokerage relationships.


Determine goal or outcome:

A good decision is the result of thoughtful planning. A buyer should establish certain criteria including: affordable price range; style and size of home; location; lot size; school locations and access to facilities such as shopping, medical care and businesses. Real estate brokers can offer assistance in these areas.

See a mortgage lender:

Many buyers find it is an advantage to be pre-qualified or pre-approved for a mortgage before beginning to shop. The qualifying process includes evaluation of available income and long term monthly expenses and past credit history to determine what type of mortgage financing is available to a prospective purchaser. A credit report is utilized by the lender to verify that the loan applicant’s credit is in good standing or identify problems that need to be addressed.

Establish brokerage relationship:

When you have decided what type of broker relationship and services meets your needs, and after having interviewed enough brokers to feel comfortable with your decision, it’s time to finalize your decision with the broker you have chosen to work with.

Your broker may ask you to sign an exclusive right to buy agreement to formalize the brokerage relationship. All Colorado approved forms advise parties to seek legal counsel if you are not sure about the meaning of consequences of the agreement. If you choose not to sign the agreement, the relationship between you and your broker will be "transaction-brokerage" by default according to Colorado License Law.

Preview properties:

Once you have established a relationship with a real estate professional, discuss what types of properties and neighborhoods might meet your needs and price range. Plan on previewing several properties that you and your broker have selected as potential matches to your criteria.

Narrow the list:

You will probably want to revisit those properties that seem to meet your needs. A closer look will likely bring more questions to mind that the owner or your broker can help answer for you. When you decide that you have found a property you would like to own that meets all of your criteria, it’s time to talk to your broker about making an offer. This may also be the time to consider what kinds of special assistance and information you may need from other professionals such as home inspectors, engineers or attorneys.

Make an offer


An offer for the purchase of real estate must be in writing to be valid. The Colorado Real Estate Commission requires that every licensee use a contract form approved by the Real Estate Commission unless the contract is drawn by the seller or buyer or the attorney for the buyer or seller.


Since every offer to buy is unique, the Real Estate Commission approved contract allows for you and your licensed broker to make the contract contingent on certain things such as approval of financing, a satisfactory home inspection or the sale of your current residence. It is important to include those contingency items in your contract to eliminate misunderstandings about what circumstances will allow you to complete your end of the bargain.

Time is of the essence:

Your offer allows you to make decisions regarding when to close on your new property and when you can take possession and what remedies are available if the contract dates are not met.

Acceptance, Rejection & Counteroffer:

Your contract should give the seller a specific period of time to consider the offer. If your deadline is not met you have no obligation to continue with the purchase. If your offer is rejected either by notification from the seller or by no response you can decide whether to amend your offer or consider other property. If the seller wishes, he/she may decide to change the terms of the offer and give you the opportunity to consider the terms as modified. At this point your original offer is rejected and you can accept or decline the counteroffer.

See Your Lender:

If your offer to purchase is accepted, the next step is to contact your lender. If you are pre-approved or pre-qualified, you are several steps ahead. If not you should make an appointment to make application for your new loan as soon as possible.

Your lender will want a copy of the contract signed by you and the seller. In most cases the lender will arrange for an appraisal of the property to ensure that the value of the property is sufficient to allow a loan for you and your new home. During the next few weeks the loan underwriting process will continue until the lender makes its final decision to grant or deny your loan.

In the meantime, they may request more documentation or clarification of your credit worthiness or more information about the property itself. Once the loan is approved the closing date can be set. At closing, the final paperwork is reviewed and signed, and the funds change hands. After closing you can take possession of your new home subject to the terms of your contract.


Determine goals or outcome: Once the decision to sell has been made, a number of other questions come to mind. What is a fair price under the current market conditions? What are the current market conditions? How can the property be marketed most effectively? How long will the process take and how should I proceed with future plans? Who will be able to help with contract and closing requirements? Some sellers have the experience and expertise to answer these questions, many others would prefer professional assistance from a real estate broker and/or an attorney.

Interview and select a broker: The process for selecting a broker is described in the section titled "How to Select a Real Estate Broker". As a seller, pricing and marketing issues are very important. Everyone wants to make sure they get the best possible price and terms. Proper preparation will assist you in reaching that goal.

Competitive Market Analysis: The brokers that you interview will want to take a careful look at your property in order to gather information to help them estimate its value. This estimate is not an appraisal, but a competitive market analysis. This is a tool that will allow you to compare your property with similar properties recently sold and currently on the market.

Marketing Strategy: Newspapers, yard signs, open houses, internet, multiple listings service? How should your property be marketed? What kinds of advertising really pay off? What works for sellers in my price range? A broker who knows your area will be able to help you devise a marketing plan based on previous successes.

The Listing Agreement: The listing agreement is the written contract whereby a property owner hires a real estate broker to market real property and provide services. A listing contract describes the property ( address and legal description), the listing price and the terms that are acceptable to the seller. The listing also outlines the compensation that the broker is to receive. A listing may specify a percentage of the selling price, a flat fee or any other negotiated agreement mutually acceptable to the parties (the seller and the broker are the parties to the listing contract) as compensation to the real estate broker. Colorado brokers are required to use listing contracts approved by the Colorado Real Estate Commission.

Preparing for a Showing: Your broker can give you good advice about how to prepare your property for showing. Common sense applies, but a trained third party observer can help you to make the best possible first impression on prospective purchasers. A thorough clean-up, a little fresh paint or minor repairs can help show your property in a favorable light.

Counteroffers: An offer to purchase made by a prospective buyer has no limits on what price or terms it may contain. An offer that mirrors the listing’s asking price and terms may be common under certain market conditions, however, from a purchaser’s point of view, it may represent a minor issue in a search for an exceptional value. A licensed real estate broker is required to submit all offers regardless of it’s terms. The seller always has the option of accepting or rejecting an offer that does not meet his or her requirements. If the terms do not meet with the sellers approval, a counter offer may be utilized as an attempt at compromise rather than dismissing what might be a qualified prospective purchaser.

A Commission approved "Counter Proposal" form is used to modify the terms of an offer to purchase. Once a counter offer is made, the terms of the original offer have been rejected and the seller proposes new terms. The original purchaser then has the option of rejecting or accepting the new terms.


The Title Fact Sheet provides information on title and title insurance for prospective property buyers and sellers.


As the licensing authority for Colorado's real estate industry, the Division of Real Estate can assist consumers when a licensee violates license laws, rules and regulations. While license law covers many aspects of real estate transactions, there are times when potential violations fall outside of the Division's jurisdiction.

Below are links to other agencies and organizations that offer additional information and guidance for consumers and licensees:


Adjustable-Rate Mortgage (ARM): The interest rates charged on these mortgages are tied to an interest-rate index. If the interest rate index rises, the mortgage interest rate and the monthly payment go up. If the interest rate index falls, the mortgage interest rate and monthly payment go down.

Adjustable-Rate Mortgage (ARM) Disclosure: This document describes the features of the adjustable-rate mortgage (ARM) program you are considering. It includes information about how your interest rates and payments are determined, how your interest rate can change, and how your monthly payment can change. The lender is required to provide this document to you when you hand in your application or before you pay a nonrefundable fee (whichever is earlier).

Amortization: This term refers to the gradual paying down of a loan. For example, traditional mortgage terms require that each payment include, in addition to interest, part of the loan principal. That way, you continually lessen the amount you owe and extinguish the debt within a set period of time.

Annual Percentage Rate (APR): The APR provides the true cost of a loan expressed as one number that enables you to compare all types of loans. The APR calculates the annual cost of the loan, taking into consideration points (loan origination fees), the interest rate, and other costs associated with getting the loan, including appraisal and credit report fees.

Conventional Mortgage: Also called a fixed-rate mortgage or a traditional mortgage, the interest rate remains the same for the life of the loan. The loan term is typically 15 or 30 years.

Credit Report: This is a report containing detailed information on your credit history. The report includes identifying information and details about your credit accounts, loans, bankruptcies, late payments, and recent credit inquiries. Prospective lenders will obtain these reports, with your permission, to evaluate your creditworthiness. Every year, you should order a free copy of your credit report and review it for accuracy.

Credit Score: Your credit score is a measure of the risk you pose to someone who wants to lend you money. It is calculated using a standardized formula. There are many factors that could damage a credit score, including late payments and poor credit card use. Lenders may use your credit score to determine whether to give you a loan and what rate to charge. The better your credit score, the better the rate you can get on a loan.

Debt-to-Income Ratio (DTI): This ratio represents your monthly fixed expenses divided by your gross monthly income (income before taxes and deductions). The lender uses this ratio to help determine how much it will lend you. If the percentage is greater than 36, the ratio could negatively impact your credit score because the lender considers you to have too much debt.

Good Faith Estimate (GFE): In this document, the lender estimates the amount of or range of charges for the specific settlement services that you are likely to incur in connection with the loan closing. The lender is required to deliver or mail the GFE to you within three business days after receiving or preparing the loan application.

Initial Truth in Lending (TIL) Disclosure: This document reflects the terms of the legal obligation between you and the lender. The lender is required to deliver or mail the TIL disclosure within three business days after receiving or preparing your loan application.

Interest-Only Mortgage: The borrower is required only to make interest payments for a specified number of years. When this initial period expires, the loan changes so the monthly payment includes principal and interest. At this point, the mortgage begins to fully amortize and monthly payments could increase significantly. The monthly principal payment could be greater than the conventional fixed-rate mortgage payment because there are fewer years to pay down the principal.

Loan-to-Value Ratio (LTV): The ratio compares the value of the loan with the fair market value of the home. The lender uses it to determine if its potential losses (in the event that you do not pay) may be recouped by selling the house.

Minimum Monthly Payment (MMP): This required payment typically covers only a portion of the interest and none of the principal.

Negative Amortization: This can occur when you choose to make the minimum payments based on an offered “teaser” rate. The minimum monthly payment often does not cover the interest owed each month for a certain period of time. The interest that is not covered by these monthly payments becomes part of the principal. As a result, the balance of the loan increases and could eventually exceed what you intended to borrow in the first place.

Nontraditional Mortgages: These products are more complex than traditional fixed-rate or adjustable-rate mortgages. They present greater risk of negative amortization and payment shock. Typically referred to as alternative or exotic, these products take many different forms. They include interest-only mortgages, payment-option ARMS, low-doc. and no-doc. loans, piggybacks (simultaneous second lien loans – loans that cover the down payment) and 40- or 50-year mortgages. Although these products may provide flexibility for some, for others they may simply lead to increased future payment obligations and possibly financial disaster.

Option-ARM: This product typically offers the borrower three different monthly payment options: 1) payments of principal and interest, 2) interest-only payments, or 3) minimum monthly payments (“teaser” payment options that are less than interest-only payments). Choosing minimum monthly payments (MMPs) means the unpaid interest is added to your principal loan amount. To ensure that the loan is repaid within the agreed-upon time, these loans “recast” after a set number of years (usually three or five) or when negative amortization drives the loan amount to a certain level above the original loan amount. Monthly payments increase so that the loan fully amortizes.

Payment Shock: Payment shock is a large and sudden increase in monthly payments. It occurs primarily in interest-only products and option-adjustable-rate mortgages (option-ARMs). Prepayment Penalty: The lender may charge a considerable fee if you pay off the loan early.

Private Mortgage Insurance (PMI): PMI is required by lenders when a loan is originated and closed without a 20 percent down payment. This insurance protects the lender from default losses in the event a loan becomes delinquent. If you are approved for a mortgage that requires PMI, you still have to apply for PMI and you may not qualify. You can be approved for a mortgage and not qualify for PMI.

Reduced-Documentation Loan: Commonly referred to as a low-doc. or no-doc. loan, this is a loan for which the lender sets reduced or minimal standards for documenting the borrower’s income and assets. For example, the borrower may state that her income is a certain amount, and the lender will accept that statement with little or no documentation. Low-doc. loans may charge a higher interest rate than traditional products.

Simultaneous Second-Lien Loan: This product, also called a piggyback loan or soft second, provides an alternative to paying private mortgage insurance. (Lenders typically require PMI if your down payment is less than 20 percent of the purchase price.) The loan is originated simultaneously with the first-lien mortgage. There are many government programs offering these products to low- and moderate-income first-time homebuyers.

Be sure to compare the cost of this second mortgage with the cost of purchasing PMI. If you take a simultaneous second-lien loan in place of making a down payment, you reduce the equity you have in your home. Also, if your second lien loan is a home equity line of credit (HELOC), you may be exposed to increasing interest rates and higher monthly payments.

Teaser Rates: These are low rates that lenders offer to make mortgage products more attractive. When the “teaser-rate” period expires, the lender raises the interest rate for the remainder of the loan period. This new rate may be fixed or change periodically, depending upon the terms of your loan.


Know what you can afford.

Review your monthly spending plan to estimate what you can afford to pay for a home, including the mortgage, property taxes, insurance, and monthly maintenance and utilities. Make sure you save for emergencies. Plan ahead to be sure you will be able to afford your monthly payments for several years. Check your credit report to make sure that the information in it is accurate. A higher credit score may help you get a lower interest rate on your mortgage.

Shop around--compare loans from lenders and brokers.

Shopping takes time and energy, but not shopping around can cost you thousands of dollars. You can get a mortgage loan from mortgage lenders or mortgage brokers. Brokers arrange mortgage loans with a lender rather than lend money directly; in other words, brokers sell you a loan from a lender. Neither lenders nor brokers have to find the best loan for you--to find the best loan, you have to do the shopping.

Understand loan prices and fees.

Many consumers accept the first loan offered and don't realize that they may be able to get a better loan. On any given day, lenders and brokers may offer different interest rates and fees to different consumers for the same loan, even when those consumers have the same loan qualifications. Keep in mind that lenders and brokers also consider the profit they receive if you agree to the terms of a loan with higher fees, higher points, or a higher interest rate. Shopping around is your best way to avoid more expensive loans.

Know the risks and benefits of loan options.

Mortgages have many features--some have fixed interest rates and some have adjustable rates; some have payment adjustments; on some you pay only the interest on the loan for a while and then you pay down the principal (the loan amount); some charge you a penalty for paying the loan off early; and some have a large payment due at the end of the loan (a balloon payment). Consider all mortgage features, the APR (annual percentage rate), and the settlement costs. Ask your lender to calculate how much your monthly payments could be a year from now, and 5 or 10 years from now. A mortgage shopping worksheet (48 KB PDF) can help you identify the features of different loans. Mortgage calculators can help you compare payments and the equity you could build with different mortgage loans.

Get advice from trusted sources.

A mortgage loan is one of the most complex, most expensive financial commitments you will ever assume--it’s okay to ask for help. Talk with a trusted housing counselor or a real estate attorney that you hire to review your documents before you sign them. You can find a list of counseling resources at NeighborWorks and on the U.S. Department of Housing and Urban Development's (HUD) website or by calling (800) 569-4287.

Research your mortgage company and originator. 

NMLS: http://www.nmlsconsumeraccess.org/

DORA: https://eservices.psiexams.com/crec/search.jsp

BBB: https://www.bbb.org/

Please be aware that the BBB website is open to the public and postings may not be accurate.


Real Property Valuation Methods pdf file

Real Property Appraisers and Property Inspections pdf file

A person must hold an appraiser license to appraise real property in Colorado. There are 3 levels of licensure in Colorado: Licensed, Certified Residential and Certified General. A Licensed Appraiser is qualified to appraise non-complex one to four unit residential properties with transaction values less than $1,000,000 and complex one to four unit residential properties with transaction values less than $250,000. A Certified Residential Appraiser is qualified to appraise any type of residential property with the exception of subdivision development. A Certified General Appraiser is qualified to appraise any type of residential and commercial property.

Information on an appraiser’s license level, expiration, and status can be found on the Colorado Division of Real Estate page of the DORA website. Pertinent disciplinary documents may also be found online when applicable.

DORA’s Division of Real Estate houses the Appraiser Program, a team of 6 investigators who investigate complaints against licensed and certified appraisers as well as complaints against appraisal management companies. The Board of Real Estate Appraisers oversees the Appraiser Program.

The Appraisal Subcommittee (ASC) of the Federal Financial Institutions Examination Council (FFIEC) monitors the activities of the state regulatory agencies and grants the states’ authority to regulate appraisers.

The ASC website www.asc.gov includes the National Registry a database containing selected information about the Nation's state licensed and certified real estate appraisers. Only currently valid state licensed or certified appraisers who are listed on this National Registry are authorized under Federal law to perform appraisals in connection with federally related transactions.

The Appraisal Foundation establishes the generally accepted appraisal standards and qualification standards for state licensed and certified appraisers. It publishes the Uniform Standards of Professional Appraisal Practice (USPAP).


Colorado Secretary of State 

Information regarding elections and overseeing campaigns, licensing for businesses and various events, as well as a business information center.

Colorado Attorney General

The Attorney General is responsible for protecting consumers and the public interest.

Colorado Division of Civil Rights

The Colorado Civil Rights Division is charged with enforcing the State's Anti-Discrimination laws in the areas of employment, housing, and public accommodation.

Colorado Division of Housing

The Division of Housing was created to improve the access of all Coloradans to decent and affordable housing.

Colorado State Courts

The court system in Colorado and educational information about the courts.

U.S. Department of Housing and Development (HUD)

HUD is responsible for enforcing the Fair Housing Act, along with supporting community development, increasing home ownership and fighting housing discrimination.



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(303) 894-2166 / (303) 894-2185 - Phone (303) 894-2683 - Fax