Homes in the program follow a set home sale process.

The Home Sale Process

Are you working with a real estate agent?

Most buyers and sellers work with a real estate agent, but this is not required. The program recommends working with an agent, especially for those new to buying and selling homes.

Buyers usually do not need to directly pay an agent because sellers usually cover the compensation costs for both agents. A 2.5% fee (1.25% for each agent) is added into the price of the home to pay these fees. This is lower than what is typical in the industry to help keep homes affordable into the future.

Most agents accept this lower rate, but some may request more. You should discuss this fee with your agent before moving forward as the home price cannot be increased and any additional fee would be the seller’s responsibility.

Sellers have the option to use an agent (recommended) or independently market the home, schedule showings and open houses, and review the purchase contract (For Sale by Owner or FSBO). The program cannot help with FSBO real estate tasks. Without a seller agent, the price of the home will be increased by 1.25% (vs 2.5% with a seller agent) to pay the buyer agent. In addition, $550 will be added to the price to help cover some of the seller’s marketing costs. Review the For Sale By Owner Checklist to learn more.

With either option, $650 is added to the price to help cover some of the closing costs. Sometimes this does not cover all the closing costs. Any extra needed will be paid from the sale proceeds.

Inspections

Owners in the program must maintain their home in good, safe and habitable condition. Before a home is sold the program requires a home inspection. If the home does not meet the program standard the owner needs to make repairs, or the resale price will be reduced by the amount needed to make repairs.

Home inspections, by certified inspectors, are done during the sale process and there are two times an inspection can be completed; before the home is listed for sale (optional) and once the home is under contract (required). The inspection(s) is used to verify the home meets the program standard.

  • If the seller chooses to have an inspection before the home is listed for sale, the seller has an opportunity to make repairs, or price will be reduced if repairs are not made. This option can cause a delay of 2-4 weeks in listing the home to allow the extra time needed for this process.
  • The buyer is always required to obtain an inspection. This is the only required inspection and will happen even if the optional pre-sale inspection explained above is done.
    • The contract to buy also has an inspection section. After the inspection, the buyer can ask for repairs to be made. If and how these happen is negotiated between the buyer and seller. The program is not involved in these negotiations.

Notice of Intent to Sell

Owners need to let the program know when they want to sell. Owners should complete the Intent to Sell form at least 65 days before they hope to complete the sale.

After the form is received the program will determine the maximum resale price and owners will be assigned a direct contact to work with throughout the resale process.

Website Marketing Form + Photos

Owners looking to sell must complete the Website Marketing Form and submit photos of their home. Your agent can assist with this process.

The home will be listed on the program’s website within 5 days of receiving the complete marketing form and photos; this starts the required 30-day marketing period (see below). In addition to the website, the program may advertise the home through email or other channels.

Sellers must also list the home on a Multiple Listing Service (MLS) to more broadly advertise the home. Most real estate agents can access an MLS to list the home. If not listed in an MLS, sellers need to explain how they will advertise the home (other websites, flyers, distribution lists, etc.) in the marketing form.

30-day Marketing Period

All homes go through a required 30-day marketing period. During this time the home is advertised, and potential buyers visit the home. Sellers need to allow showings by appointment, hold open houses or both during this time.

Buyers are required to visit the home. They may not enter the selection process if they have not.

If only open houses are being held, they must meet program requirements.

  • A minimum of two open houses are required.
    • One of the two must be during the first week of the marketing period.
    • One must be on a weekend during the day and the other must be on a weekday evening.
  • Sellers must keep a list of open house attendees
  • Sellers are encouraged to make arrangements for those who cannot attend one of the two open houses.

For example, this would meet the requirement:

  • Open House 1 – First week of open marketing period on Thursday from 4 to 7 p.m.
  • Open House 2 – Last week of open marketing period on Saturday from 11 a.m. to 2 p.m.

At the end of the 30-day marketing period the Fair Selection Process is used to select the buyer.

Frequently Asked Questions

In the program, the Fair Selection Process is used to select a buyer.

This differs from market rate transactions where the seller selects a buyer.

While not required, the program recommends working with a real estate agent.

Given that the maximum price is fixed, some may not think they need an agent, but agents do more than negotiate price. Agents help schedule showings and evaluate properties, develop and review contracts, manage closing timelines and tasks, negotiate price (although maximum prices are capped for homes in the program), repair items, payment of other costs, closing dates, etc.

Real estate agent fees are typically paid by the seller out of the proceeds; there is no direct fee to buyers. These fees are included within the maximum resale price.

The program does not endorse specific real estate agents and buyers/sellers can work with any agent they choose. Agents do not need to be approved to work with the program.

Some buyers/sellers ask family or friends for the names of agents they have worked with; you can also reach out to agents who have listed homes for sale on the city’s website. It is helpful for agents to be familiar with the program. If they are not familiar with the program, they can learn about it through the city’s website. Agents can also contact the program with questions.

When a home enters the program, a maximum resale price is set. The maximum resale price of each home is based on the formula in the home’s Permanently Affordable Covenant.

Each year, the value of homes in the program can increase a small amount. This is called appreciation. The amount added is 1% to 3.5% of the home’s purchase price. The allowable appreciation changes each year and is based on the general economy.

Example:

TransactionPrice
Purchase Price $200,000
Year 1 Appreciation (1%) $2,000
Year 2 Appreciation (2%) $4,000
Year 3 Appreciation (1.5%) $3,000
Home Value After 3 Years $209,000

Sometimes owners make improvements to their homes. For example, they may replace carpet with hardwood floors. The program calls these capital improvements and some of the cost for these improvements can be added to the home’s value with pre-approval. The Capital Improvement Policy describes the process for pre-approval and lists improvements that are eligible.

Example:

TransactionPrice
Purchase Price $200,000
Year 1 Appreciation (1%) $2,000
Year 2 Appreciation (2%) $4,000
Approved capital improvement for replacing carpet with hardwood floors. $6,000
Year 3 Appreciation (1.5%) $3,000
Home Value After 3 Years $215,000

Finally, as explained above, some money is added to the home’s maximum resale value to help cover a portion of marketing and closing costs.

Example:

TransactionPrice
Purchase Price $200,000
Year 1 Appreciation (1%) $2,000
Year 2 Appreciation (2%) $4,000
Approved capital improvement for replacing carpet with hardwood floors. $6,000
Year 3 Appreciation (1.5%) $3,000
Real Estate Compensation (2.5%) $5,375
Closing Cost Allowance $650
Maximum Resale Price $221,025

Over time similar homes may end up with different prices. There are a few reasons this happens.

  • Homes enter the program at different prices to target different levels of income. The program aims to have homes for a variety of incomes and there could be two homes that are the same that start at different prices.
  • Homes enter the program at different times and original prices are dictated by the general economy.
  • Value can be added to a home for capital improvements. The more improvements done, the higher the maximum resale price.
  • Each time a home is sold marketing costs and agent fees are added which increases the price. The more times a home is sold the higher the price.

Owners can submit a request to the program to find out the current value of their home. Please fill out the Current Value Request Form to ask for a current value. This will not include agent fees or closing cost allowance.

When an owner turns in the Intent to Sell Form, the maximum resale price is calculated. This does include agent fees and closing cost allowance and is the list price of the home.

It typically takes 65-75 days to sell a home in the program however, if there isn’t interest in the home, it could take longer than 75 days.

Once an owner submits an Intent to Sell form, it takes 5 days to prepare the listing, there is a required 30-day marketing period and once a buyer is selected there’s a second 30-day period (dependent on contract dates) to complete the sale.

Full details of this process can be found on the Fair Selection Process and Sales Contract pages.

Yes. Owners can show their home by appointment, hold open houses or both. These options are explained in detail above.

Yes. Each owner agrees to maintain their home in a “good, safe and habitable” condition when they sign the Permanently Affordable Housing Covenant.

At the time of sale, the program will follow the inspection process described above to determine if this standard has been met. If the standard has not been met repairs need to be made. If repairs are not made the home price will be reduced.

No. As explained above, owners need to make repairs or lower the price of the home. In some cases, the buyer may take on the repairs, but the seller remains responsible for the cost of repairs. Payment is usually in the form of a seller credit at closing.

Most of the time there is more than one household that wants to buy each home, but occasionally homes do not sell right away. Sellers may choose to lower the price or add other incentives to find a buyer.

If no buyer goes under contract after the Fair Selection Process, homes become ‘Immediately Available’ to qualified buyers. The program gives priority application processing to households who are interested in Immediately Available homes. This means they do not need to enter the application wait list and can apply right away.

After a number of months without a buyer the program may offer financial assistance to help attract a buyer.

Explore Homeownership Programs

Contact Homeownership Program

Phone

303-441-3157

Email

homeownership@bouldercolorado.gov

Address

PO Box 791
Boulder, CO 80306
United States