So you want to sell your house, or you want to buy one. In the first situation, you’ll interview two, three or more real estate broker or agents, select one and sign a contract to list your home. In the second instance, you’ll find a real estate agent to help you explore the market. You may or may not sign a contract. But you will be given a disclosure explaining the different relationships a real estate agent can have in the state of Colorado.
It’s complicated. You’ll see terms like “Transaction Broker” or “Agent.” These words in the contract have specific legal meaning, and you need to understand what they mean. Unless you’re a lawyer, you may not have a clue. Of course, when you see these terms or any unfamiliar terms in the contract ask your agent or broker to explain them to you.
My purpose here is to help you understand the role of the broker or agent for you. States have different real estate laws and regulations. You need a real estate practitioner who lives and breathes them. That way when you ask questions, you’ll get an accurate understanding to help you with Colorado’s regulations and the various roles of the professional real estate practitioner can have in Colorado.
Let’s examine the Broker role first and then the Agent role.
The term “Transaction Broker” means that the broker acts more like a referee to assist the client through the selling or buying process and works independently for both the buyer and seller. The broker knows all the rules and ensures that they are being followed. She explains procedures, ensures that correct and accurate information are available to both parties. For example, the broker can arm the buyer with statistics and comparative house prices. In no case will the broker help the buyer or seller negotiate a better “deal” at the expense of either the buyer or seller. In Colorado, the default role is that of a “Transaction Broker.”
The “Agent” role means that the agent is responsible for helping his or her client get the best deal possible. The agent works for the client. The agent will promote the interests of the buyer, assist in getting the best price and terms and provide counsel regarding any material benefits or risks in the transaction. In short, the Agent reviews offers helps negotiate offers and plays a part in counteroffers, so that the client will get the best possible deal, etc.
Can roles change? You betcha!
The buyer may see a property that’s listed by his agent. Remember, “Agent” not “Transaction Broker.” His agent may also have an agent relationship with the seller of the property. Obviously, this puts the agent and both sets of clients in a bind. She can’t be an advocate for both the seller and the buyer. What does she do? She writes a Status Change contact for both the seller and buyer that converts her to a “Transaction Broker.” Problem solved.
