4 Best Ways for Selling a Home in Colorado
Even though the information on this web page is provided by a qualified industry expert, it should not be considered as legal, tax, financial or investment advice. Since every individual’s situation is unique, a qualified professional should be consulted before making financial decisions.
Homeowners have a few options for selling a Colorado property, and this article details four of the most common ways to sell a house in the Centennial State.
We’ll cover those sales approaches in detail and point out some pros and cons for each one.
We’ll wrap up the article by outlining the steps that every homeowner goes through regardless of the sales method selected.
The fastest selling option is the private home sale. Let’s begin there.
#1 How to Sell a House in Colorado Privately
A private sale is an all-cash transaction, and that type of sale speeds the closing process. This method also offers an element of personal privacy when you sell a property in Colorado.
You won’t have photos of your home featured on the internet and in advertisements, and you won’t have strangers routinely taking home tours in the hope you’ll find a buyer.
The next segment discusses who private buyers are and what they offer to homeowners.
What Are Home Buying Companies?
Real estate investors operate home buying companies that buy investment properties in Colorado with cash so the transaction can move quickly to close.
Residential real estate investors purchase a variety of properties from single-family to multifamily homes of up to four units. But there are also investors for commercial and mixed-use properties.
Some investors focus on attached housing or mobile and manufactured properties. Some cash buyers even purchase vacant land parcels, in addition to residential homes.
What do investors do with their purchases? Some prefer buying a home for rental income, while others purchase houses in as-is condition to repair and resell to others.
Colorado property investors buy homes in any condition, from turnkey to a hoarder’s house filled with a collection of junk.
There’s no need to repair or replace anything when you sell to an investor.
Cash investors close rapidly compared with sales to traditional home buyers because they use cash on hand or take hard money loans that don’t require the wait times involved in residential mortgages.
Traditional lending requires sellers to wait while their buyer applies for a mortgage, and then wait additional time while the underwriter reviews the loan application.
While most homeowners would be happy to accept an offer that involves a quick sale, other sellers have a serious need for rapid closing, including people:
- selling a house before it goes into foreclosure
- selling a rental property with a tenant
- selling a house after a bankruptcy discharge
- selling a home that needs work
- selling real estate under probate
- selling a house with a state tax lien
- selling a hoarder’s house
- selling a home during divorce
- selling a house for a job relocation
- selling a property privately
- selling to downsize to a smaller home
Local Colorado investor-friendly title companies typically work with cash buyers, and that also speeds the closing.
Let’s consider the benefits of selling your home to a real estate investor.
Pros of Selling to a Home Buying Company
- Cash investors will help you sell your house fast, sometimes in a matter of only days.
- Sell your Colorado house for cash, and you’ll avoid all the traditional delays of waiting for lenders to approve a mortgage.
- Since cash investors buy homes as is, you can skip all the upgrades and staging that traditional buyers expect.
- You’ll save 5%-6% of your selling price when you and your investor pass on using a real estate agent who’d charge a commission.
- You’ll avoid paying closing costs for sellers. Investors typically pick up that cost!
Cons of Selling to a Home Buying Company
There is one potential downside to selling a home in Colorado to a property investor.
- Cash property buyers in Colorado are probably not going to make an offer that matches the market value.
That’s disappointing, but it’s true. When you consider the reasons, it makes sense. Investors consider the costs of home upgrades and repairs, and they also need to make a profit to stay in business.
But there’s another important side to the offer. You won’t pay closing costs, have out of pocket expenses for upgrades, and you’ll skip paying Realtor fees.
Those savings add up, and your offer may come closer to market value when you add these back to the contract offer price.
So, how do you find a professional home buying company? The next segment has some suggestions.
How to Find an Ethical Home Buying Company
Collecting names and contacts of home buying companies is fairly easy. Simply save advertising mail from companies and copy information from local billboards or from media ads.
You can also ask friends and family if they’ve sold to investors in the past, and if they’d recommend any particular local cash buyer.
Using terms such as “cash buyers near me” or “we buy homes in (your city)” during a web search will also result in finding some local prospects.
After you’ve collected a few companies’ or individual investors’ contacts, it’s time to do some vetting.
While many investors operate professionally and ethically, the fact is, there are some less-than-ethical home buying firms in operation. You can avoid those buyers by doing some basic research.
Examine the website of the investors on your list of prospects. They should feature a page labeled “About Us,” “Our Company,” or something similar that has biographical information.
This page should provide some basic background about the investment firm and a short bio of the investors themselves. Check to see if the company has been in operation for a minimum of three years.
A consumer feedback check is also needed. Look at consumer feedback sites such as Yelp, Real Estate Bees, or the Better Business Bureau to read comments made by former clients.
This takes time and effort, but you’ll need to vet each investor until you locate several professional prospects.
If you want to speed the process, you can always turn to our national platform that hosts local investors ready to make offers on properties.
We’ve done vetting on our partnering investors for you. We look for professionalism, experience, and a history of timely closed sales.
To request a cash offer on your house, simply complete the short online form and wait to be contacted by a local investor.
There’s never a fee, you won’t pay a commission, and there’s absolutely no obligation to sell.
Expert Insight
What should home sellers look for when screening cash house buyers?
Get three things in writing: proof of funds (actual bank statements, not a letter), their purchase price versus market value (most offer 60-75 cents on the dollar), and whether they plan to assign the contract before closing.
Many Colorado wholesalers market as cash buyers but never close themselves. A properly priced traditional sale goes under contract in 15-25 days here. The discount is rarely worth it.
— Bobby Friel, CO Home Equity, Licensed Mortgage Broker & Real Estate Agent
Before selling to a “we buy houses” company, get competing cash offers from at least two sources.
— Sara Garza, LIV Sotheby’s International Realty, Real Estate Broker
#2 How to Sell a House in Colorado Traditionally
The traditional avenue of selling a home in Colorado has homeowners hire a brokerage to take the listing contract, do the marketing, conduct the sales negotiations, oversee escrow and title, and then supervise the final closing process.
All these services require specialized skills. In the next segment, we’ll highlight the expertise offered by real estate agents and brokerages.
Who Are Real Estate Agents?
Real estate agents are experts in selling a house in Colorado. They must take close to 200 hours of formal courses, and pass exams that cover state and property law, contracts, record keeping, trust accounts, and the closing process.
These requirements give your agent the training to devise a sales marketing plan, assist you in setting a competitive price, and the ability to guide you through all the steps involved in selling your home.
Real estate agents using the title of “Realtor” hold membership in the state branch of the National Association of Realtors.
This association offers advanced training to members, and requires them to take an oath to follow ethical practices in representing clients.
Comparing the pros and cons of using an agent can assist you in deciding to use the traditional sales approach.
Pros of Using a Real Estate Agent
- When selling a property in Colorado, you can feel confident that your licensed agent and the supervising broker have followed the real estate laws and regulations.
- Agents have access to proprietary databases to complete an accurate comparative market analysis for your home. This helps you set a price that will correspond to a lender’s appraisal.
- You have the ability to focus on your normal life when you allow your agent to do the heavy lifting of marketing your home. Your agent is your fiduciary.
Cons of Using a Real Estate Agent
- The cost of selling a house with a realtor in Colorado is an eye-opener. Brokerages charge you between 2%-3% for the use of an agent.
- You’ll probably need to wait some time until you find a buyer. In the meantime, your agent will continue to show your house. This means keeping your home in turnkey order.
- Realtors generally bring buyers who need mortgages to purchase a house. This delays your closing while lenders collect applications and appraisals, and there’s no guarantee that your buyer will qualify or your house will appraise at the sales price.
How to Find a Good Real Estate Agent
Finding a qualified agent involves collecting and screening. Ask friends, family, and coworkers for their agent recommendations.
Add the names of local agents from the Colorado Association of Realtors‘ website to that list.
Then use the Colorado Department of Regulatory Agencies’ active-license search feature to make sure your prospective agents are licensed.
You’ll also need to check the agency’s webpage that lists disciplinary actions against licensed agents for any matches to the names on your list of prospects.
The next step is to check your agents against online consumer reviews.
Reading client comments on websites such as Yelp, Real Estate Bees, and the Better Business Bureau (BBB) can offer information about the agents that need to be removed from your list.
The final screening step involves sitting down and interviewing your top three prospects.
Continue the interview process until you find an agent who has good communication skills, a resume of sold homes, and a person you feel you could work with during the sales process.
Our next approach asks you to take control of everything involved in the home sale.
Expert Insight
What should home sellers look for when screening real estate agents to hire?
Don’t just hire the one who says they will get you the most money for your home. Some agents will tell a seller they can list high and sell it, but they often know it will not sell at that price.
They want to wear down the seller to drop the price later. They just agreed to the high sales price now to get the listing. This is a terrible tactic that hurts both the seller and the agent.
— Andrew Fortune, Great Colorado Homes, Owner/Realtor
— Sara Garza, LIV Sotheby’s International Realty, Real Estate Broker
— Bobby Friel, CO Home Equity, Licensed Mortgage Broker & Real Estate Agent
#3 How to Sell a House in Colorado Without Middlemen
Selling without the help of a real estate agent is known as an FSBO, or a “for sale by owner” sales listing.
Homeowners need to take on all the duties of a real estate agent, starting with completing the mandatory disclosures that are given to prospective buyers.
The Colorado Residential Property Disclosure informs potential buyers of any adverse material facts about the property that would negatively impact the value of the home.
The next step involves determining your current home value and setting a sales price.
Before you open your house to a stream of prospective buyers, you’ll need to review federal, state, and local laws to ensure you’re following them.
You’ll also need to develop a checklist of the steps required to open escrow and handle the requirements involved during that process.
The more home showings you can arrange, the greater chance you’ll sell your home. There are a number of ways to attract prospective buyers for showings.
Ways to Market Your House Yourself
- Put a sign on the property with your contact information.
- Film a walkthrough of your home and share it on websites such as YouTube or Instagram.
- Make up a flyer that features images of your house and a list of amenities. Distribute it throughout the mail boxes in your and nearby neighborhoods.
- Create advertisements on websites to sell your home by owner.
If you’re unsure going it alone on your home sale meets your needs, consider the pros and cons of an FSBO sale.
Pros of Marketing Your House Yourself
- The major advantage for most FSBO sellers is the absence of real estate commissions when both buyer and seller forgo the use of agents. Commissions are the lion’s share of the closing costs in Colorado.
- You operate the calendar for your sale, and you make all the decisions.
- You can spend all of your time marketing your property. Unlike real estate agents who have a client list, you are your only client.
Cons of Marketing Your House Yourself
- Real estate sales laws are complex, and you may not have the background or knowledge to ensure you’re meeting all the requirements.
- You won’t have a professional agent to assist you during the sale. Negotiations can be intense, and you’ll have to handle it without help.
- Any delays may have your buyer back out of the sale. Major errors on your part may end with a legal court challenge.
- Closing costs when selling a home by owner aren’t easily translated when you aren’t familiar with the formal terminology. You may overpay your escrow fees when you can’t distinguish between the required and optional charges.
Our final sales option is one homeowners may take when they want to both buy and sell simultaneously.
Expert Insight
What are the common pitfalls when selling a house by owner?
Many of them will not properly fill out the seller’s disclosure, or will not fill it out at all.
— Andrew Fortune, Great Colorado Homes, Owner/Realtor
Missing one means losing leverage or the buyer walking.
— Bobby Friel, CO Home Equity, Licensed Mortgage Broker & Real Estate Agent
#4 How to Sell and Buy a House at the Same Time in Colorado
You’ve fallen in love with a home that’s listed, but your current home isn’t on the market. Listing takes time, and locating a buyer requires even more time. You may lose your new house during these delays.
There’s a solution to this situation — local Colorado iBuyer companies.
iBuyer firms will often buy your home and give you quick access to that cash equity to buy your dream house. You won’t need to find a buyer or wait for your buyer’s mortgage to be funded.
You’ll then take your cash, buy your new house, and the iBuyer will close on your current home with cash. This offers speedy transactions for all buyers and sellers!
The best part is, you won’t need to make a contingency offer on the sale of your dream home that may risk you losing out to another buyer.
Home Sales Process in Colorado
The next segment of the article summarizes the process of how to sell a home in Colorado from the point of the common stages of a real estate transaction.
Before Signing a Purchase Contract
Before you arrive at the purchase contract stage, you’ll need to prepare your home for the sale.
This might involve upgrades such as paint, flooring, decluttering, landscaping improvements, and cleaning. You may even decide to rent furnishings to stage your home.
Typical buyers like listings that resemble images from home magazines — turnkey and perfect.
But professional cash buyers understand they’re buying the house, not the staging. They’ll buy a property in as-is condition. No extra effort by the seller is necessary.
Once your home is ready, you’ll sign a listing agreement when working with an agent.
You’ll need to complete all the legally required disclosure forms regardless of the way you chose to sell.
Our article on how selling a house as is works in Colorado provides more details about the property disclosure and the state requirements.
Marketing the Property
Then comes the promotion and marketing step. You’ll develop a plan that may include advertising, signage, open houses, broker previews, and a strategy for online appeals.
Your plan may not attract buyers, so you may need to revise it to finally interest some prospective buyers to tour your home.
As for investors, they simply need a request to visit to make an offer. No marketing is necessary.
Accepting an Offer
Next, you’ll deal with the sales negotiations. You may make a real estate counteroffer, and recounter and recounter again until the terms and price meet your expectations.
Your buyer will present an earnest money deposit with the offer. This money will be placed into an escrow account after you’ve accepted the contract.
Your agent, you when working as an FSBO, or your investor will then open an escrow account with a licensed, neutral third party who will wrangle the formal contracts and paperwork and handle the monetary transactions.
Buyer Due Diligence Period
Perhaps the most intense period is the due diligence time when your buyer must complete the mortgage process, hire inspectors to examine the house for flaws and defects, hire a title company to search for liens on the property, and locate an insurance company to write a hazard policy on the house.
Cash buyers don’t require the long delay for mortgages, and they won’t bring in a cast of inspectors and then attempt to renegotiate the sale price after reading the inspection reports.
A few days before the final transaction closing, you’ll review your closing costs with the escrow agent.
This list includes commission and closing fees when you sell as an FSBO or with an agent.
Professional investors not only don’t bill for commissions, but they also typically pay your closing costs.
Your buyer will do a final walkthrough of your house a day or two before the final closing.
Closing
Both buyer and seller sign formal documents, and the property’s keys are turned over to the new owner in the final closing step.
The last step in the sales process includes filing the new deed with the county clerk and recorder and completing the Real Property Transfer Declaration (RPTD).
Your escrow officer and real estate agent can assist with this requirement.
Expert Insight
In a traditional real estate sale, which stage is the most complex and time-consuming for sellers and how could they make it easier?
Plan ahead by collecting all of your required documentation and disclosure information prior to going under contract.
The Seller’s Property Disclosure Statement and HOA governing documents (bylaws, CC&Rs, etc.), along with associated budgets, well and septic reports, permits, warranties, etc., should be readily available for distribution upon request as soon as possible after contract execution.
In most areas, including ours, condo association document delivery has been one of the biggest bottlenecks in this process, and being late to provide them may jeopardize an otherwise good transaction.
By having everything in hand early, you will help keep things on track and stay within the time frame you’ve established.
— Natalia Bassova, Resort Real Estate Inc., CEO & Founder
You’re managing inspection negotiations, appraisal contingencies, title work, HOA document delivery deadlines, and loan commitment timing simultaneously.
Sellers who handle it well hire a transaction coordinator or work with a full-service agent who manages communication with the buyer’s lender, title company, and HOA directly.
The biggest mistake I see is sellers going passive during this phase and assuming problems will resolve on their own.
— Sara Garza, LIV Sotheby’s International Realty, Real Estate Broker
Every inspection report will reveal issues with a home. Sellers never really know how difficult a home buyer can be until they reach this point.
The best way to ease this stress is to have your house pre-inspected before listing it.
— Andrew Fortune, Great Colorado Homes, Owner/Realtor
Next Step
You now know the basics of how to sell a house in Colorado and the steps involved in the sales process.
It’s time now to begin collecting the resources you’ll need to complete the sale of your property.
Developing lists of real estate agents, iBuyers, and cash investors is a jumping-off point for your sales journey, and we can assist with that.
We have a number of prescreened local investors who are interested in making an offer on your home. We’ve vetted them for their expertise and the ability to close a transaction quickly.
Request cash offers from our partnering buyers online. It’s a simple process.
It’s also free! There are no commissions, and you’re never under any obligation to accept any of the offers you receive.
