Frequently Asked Questions
Appraisers || Brokers || Home Inspectors || Homeowner Associations || Landlord-Tenant Issues || Manufactured Housing || Mortgage Brokers || New Construction || Property Management
Appraisers
Q:
Can I take the appraisal to any lender if I paid for the appraisal?
A:
Federal regulation requires that an appraisal used for loan purposes
must be ordered by the lender who enters into a client relationship
with the appraiser. While a residential borrower has a right to
a copy of the appraisal report, (See: Residential Borrowers May
Receive Copy of Appraisal) the report belongs to the lender. Appraisers
cannot give copies of the appraisal report to borrowers without
written permission from their client, the lender.
Q:
I am a mortgage broker and I have been approached by a customer
who very recently had an appraisal done through another mortgage
company. Can my company use that appraisal? Can my company order
another, new appraisal from the same appraiser?
A:
No, your company cannot use that appraisal. Your company may, however, order another appraisal from the same appraiser.
Q:
How do I find an appraiser who is qualified to appraise my property?
A:
There are four levels of licensure of appraisers in Colorado. A
Registered Appraiser is a trainee-level appraiser who is supervised
by a higher-level appraiser. A Licensed Appraiser is qualified to
appraise many residential properties and some non-residential properties
without supervision. A Certified Residential Appraiser may appraise
all residential properties and some non-residential properties.
A Certified General Appraiser may appraise any residential or non-residential
property. In addition, Colorado law says that all appraisers must
be competent to appraise any property for which they accept an assignment.
Appraisers can be located by various sources including referrals from real estate or mortgage professionals, on-line appraiser directories, and professional appraiser organizations. Remember, if the appraisal is for loan purposes, the mortgage company must order the appraisal.
It would be prudent to ask, before engaging the appraiser(s), to see and review the appraisers qualifications. The appraiser's qualification resume will likely include the appraiser's level of licensure, number of years of experience, type of experience, amount and type of professional education, and a list of past clients. You should ask to see qualifications of all appraisers signing the report.
Q:
What should I do if the appraisal incorrectly describes my property?
A:
Appraisers sometimes make errors in describing a property. Mistakes
that are few, minor, and do not cause the report to be misleading
do not constitute a violation of license law. If the errors are
many, major, and cause the report to be misleading, you can file
a complaint with the Board of Real Estate Appraisers (see: How to
File a Complaint).
Measurement of structures can vary from one appraiser to the next or by one method to the next. Total square foot variances should be expected. Finished residential lower levels are often described as basement.
Q:
Why did the appraiser "low-ball" or "overvalue"
the property?
A:
The appraiser is engaged as a disinterested third party. Many times
the appraiser's opinion of value is different than the sales price
or the owner's opinion of value. The appraiser's value should be
supported by clearly presented factual data.
Q:
I am a mortgage broker and want the appraiser to give me an indication
of the property's value before I order and ask my borrower to pay
for an appraisal. Can the appraiser legally do this?
A:
If the appraiser gives you a written or verbal opinion of probable
value or a range of values, that appraiser has just completed an
appraisal. The appraisal and the appraisal report must comply with
the Uniform Standards of Professional Appraisal Practice.
Q:
I do not want to pay for an appraisal unless the loan is funded.
Can the appraiser do the appraisal with this contingency?
A:
No, the appraiser cannot accept such an assignment. This is a violation of the Ethics Rule of USPAP.
Q:
A few months after I moved into my home, the furnace stopped working
and it was discovered that there was a crack in it. Is the appraiser
responsible?
A:
While an appraiser should notice and report any obvious deficiencies,
needed repairs, or deferred maintenance, the appraiser is not a
home inspector and cannot be responsible for detecting all defects
in a property.
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Q:
Is a licensee required to furnish the Commission information relative
to their having been convicted of or having pled guilty to a crime?
A:
Licensees are required by statute, CRS 12-61-113 (1) (m.6), to immediately
notify the Commission of a conviction of, or entering a plea of
guilty or nolo contendere, to any crime. A certified copy of the
judgment of a court of competent jurisdiction or other official
record indicating that such plea was entered shall be conclusive
evidence of such conviction or plea. The information forwarded to
the Commission should include the full licensed name of the individual,
mailing address, license number, and a copy of the aforementioned
judgment. The information should be mailed to:
Colorado Real
Estate Commission
Attn: Enforcement
1560 Broadway, Suite 925
Denver, CO. 80202
Q:
I think my broker has been unethical. Does the Commission do anything
about unethical brokers?
A:
The Colorado Real Estate Commission enforces the Colorado Real Estate
Broker License Law on all licensed brokers and salespersons
in the State of Colorado. The law cannot dictate other ethical standards
that should be observed in the real estate industry.
Codes of Ethics have been voluntarily adopted by various real estate
organizations as guiding standards of high moral and ethical practice.
The Colorado Association of Realtors is a voluntary trade association
for real estate brokers and salespersons licensed in Colorado. C.A.R.
(and local, member boards) has adopted a Code of Ethics which dictates
the ethical standard to which its members must adhere. If you believe
that your agent has been unethical in his/her conduct pursuant to
your real estate transaction and is a member of a local board, you
may contact the Colorado Association of Realtors (303-790-7099)
for further information on filing a complaint.
Q:
What is the "standard" commission charged in Colorado?
A:
There is no established or required rate of commission charged by
licensees for the performance of activities requiring a license.
Commission rates are negotiable. However, a broker is not required
to negotiate. The broker may have established his own rate of commission
and chooses not to deviate from that figure. Commission rates do
tend to vary depending on the type of property offered for sale.
For example, the rate charged for a residential property may be
less than that charged for vacant ground. The length of time a property
may be on the market and the cost of advertising are just two of
the factors brokers consider when setting individual commission
schedules.
Q:
I have had problems with my home since closing. Do I have any recourse
against the seller and/or the licensee(s) for not disclosing these
problems?
A:
Colorado Law requires that brokers disclose all adverse material
facts actually known. Such adverse material facts include facts
pertaining to the title, the physical condition of the property,
material defects in the property, and any environmental hazards.
If you have reason to believe that a broker failed to disclose a
known adverse material fact to you, you may file a complaint with
the Commission. An investigation of your complaint may result in
disciplinary action against the broker(s).
Sellers are also required to disclose adverse material facts, actually
known by them, to buyers. The Commission has no jurisdiction over
sellers. Your recourse with the seller is through mediation, arbitration,
or a civil action (small claims court if under $5,000). Brokers
involved in the transaction may also be able to assist you in resolving
the problem with the seller. You should contact your broker and/or
the listing broker to discuss your problem with them.
While a broker must disclose a known defect, the seller's broker
has no duty to conduct an independent inspection of the property
for the benefit of the buyer and has no duty to independently verify
the accuracy or completeness of any statement made by the seller
or independent inspector.
Q:
Are real estate licenses required to present offers to purchase?
A:
Yes. Licensees are required to present all offers to sellers in
a timely manner irrespective of when they were received. It is up
to the seller to decide what offers they wish to entertain or counter
even if the property is currently under contract.
Q:
Is the verbal acceptance of an offer enforceable?
A:
The Statute of Frauds generally requires all agreements for the
sale or lease (longer then one year ) of real property to be in
writing to be enforceable.
Q:
How can I be sure my offer was presented?
A:
Licensees are required to present all offers. A seller can choose
whether to physically review a written offer or have the licensee
review the offer by phone. A seller is not obligated to counter
an offer or reject an offer in writing prior to its expiration.
Where a property is listed under an exclusive right to sell listing
agreement, the selling broker is required to conduct all negotiations
with the seller through the listing broker. If a buyer questions
whether or not an offer was presented he/she may contact the seller
directly. It is suggested however, that the buyer first discuss
the matter with the selling broker.
Q:
Can I get out of my Exclusive Right to Buy contract or my Exclusive
Right to Sell Contract prior to its expiration date if I'm not satisfied
with the service provided?
A:
A properly executed Buyer Agency Contract is a binding employment
agreement between the buyer and a broker for a designated period
of time, stated in the contract. The contract typically ends
when the buyer purchases a home or the termination date is reached.
The standard forms of these contracts do not provide an option to
the buyer or seller to unilaterally terminate the contract without
potential financial consequences. A request for cancellation
can be made to the broker hired however and the contract can be
terminated early by mutual agreement. Real estate brokers
are not obligated to honor such requests however and may simply
refuse to do so or ask for compensation for the cancellation of
the contract. If the broker is not willing to voluntarily
terminate the contract, consumers are advised to seek legal counsel
prior to taking unilateral action. To help preclude this type
of problem, consumers might consider asking the broker to include
a clause in the contract to reserve their right to terminate the
contract prior to its expirations date without financial consequence.
The Real Estate Commission does not have authority to intervene
in a contractual dispute between broker and a consumer, and can
offer no assistance in these matters.
Q:
I believe I have been denied rental housing because I am a single
mother with two children. Can I be discriminated against in this
way?
A:
This practice may be a violation of Colorado and/or federal fair
housing regulations. The Colorado Civil Rights Division handles
the investigation of practices which constitute a discriminatory
act or unfair practice in housing. Call the Civil Rights Division
at (303) 894-2997 for further information. If your complaint falls
within the Civil Rights Division's jurisdiction, you will be sent
a packet of information and contacted for a personal interview.
Pursuant to
C.R.S. 12-61-113(1)(m.5), a violation of Colorado or federal fair
housing laws is a violation of the Colorado Real Estate Broker License
and Commission Law and subjects the licensee to disciplinary action.
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Q:
Who can I contact if I have complaints about my home inspector?
A:
Home inspectors are currently not regulated in the State of
Colorado. However, you may contact the American Society of Home
Inspectors (303-322-2844), The National Association of Certified Home Inspectors and/or the Better Business Bureau (303-758-2100),
if your home inspector is a member. In addition, you may also pursue
a civil action suit. Finally, you may contact the Attorney General's
Consumer Protection hotline(303-866-5230). Professional engineers
are regulated by the Division of Registrations in the Department
of Regulatory Agencies (303-894-7788).
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Q:
Who regulates Homeowner Association Management?
A:
Allegations of theft or dishonesty against a licensed broker performing
management of associations will be investigated by the Commission.
No license is required to manage the activities of a homeowners
association. Complaints involving management should be brought to
the attention of the elected board members of the association. The
creation and operation of common interest communities is addressed
in the Colorado Common Interest Ownership Act. Homeowner Associations
are typically governed by an elected board. The board, on behalf
of the owners, is responsible for hiring personnel or contracting
for the day to day management (i.e.: collection of dues, maintenance,
snow removal, etc.) related to commonly owned elements in the development.
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The
right and obligations of respective parties are typically spelled
out in the lease. For advice concerning disputes you should contact
an attorney. General information for landlord/tenant issues/disputes
can be obtained from the Community Housing Service at (303) 831-1935
or from the Resident Relations Helpline at (303) 320-1611. The Housing
Information/Referral Service's help line (303) 831-1935 is another
available resource for landlord/tenant types of questions. If the
dispute involves a security deposit, you may want to review the
statute addressing the wrongful withholding of security deposits
(Title 38, Article 12).
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Q:
Is a license required to sell manufactured homes in Colorado?
A:
Manufactured housing dealers are required to register with the Colorado
Division of Housing in the Department of Local Affairs. However,
real estate licensees are exempt from the registration requirement
if the sale is in conjunction with acts requiring a real estate
license under Title 61, Part 12. For further information concerning
this exemption, particularly when engaging in the sale of a manufactured
home on leased property, real estate licensees should contact the
Division of Housing at (303) 866-2033. Individuals selling their
own home and mobile home park owners selling three or fewer homes
per year are also exempt from the registration requirement.
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Q:
Who regulates new home construction and sales?
A:
New home builders are typically licensed or approved to do business
through planning and building departments of local government. The
real estate license law contains a specific exemption for new home
sales which allows the builder to use unlicensed sales personnel
as long as they are regularly salaried employees of the builder.
These sales personnel are not subject to the Commission's jurisdiction.
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Q:
Does property management require a real estate brokers license?
A:
The term "property management" is a general term,
which typically refers to the care and rental of real property for
others. To the extent that the service offered as a property
manager includes the negotiation of a a lease or lease terms, an
active real estate brokers license is required. If a real
estate broker who is in the employ of another broker conducts such
management, all management must be conducted under the employing
broker. The Commission does not have any approved forms for
leases or management agreements but it does have specific trust
account and accounting requirements which brokers need to follow
in handling security deposits and rental receipts. Brokers
engaged in property management are also required to comply with
the brokerage relationship section of the license law and applicable
rules. Brokers must use the exclusive Right to Lease to establish
an agency and/or Exclusive relationship with a property owner.
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