Important things to know about Realtors®

Colorado Real Estate Brokers

In order for a real estate broker to use the word "REALTOR®" they must belong to the National Association of Realtors®.  Every member of the National Association takes a mandatory class on ethics, makes a pledge to abide by those ethics and to conduct business in such a manner as to appropriately represent the standards of the National Association of Realtors®.  Failure to do so may result in discipline by the Colorado Real Estate Commission, and by the National Association of Realtors®, and any local Real Estate Board to whom the broker may be a member.  Brokers who choose to be members of a local Association, the State Association, and the National Association are held to a high standard of professionalism.

In the state of Colorado, all real estate agents are "brokers" who function as either agents or transaction-brokers. Whether they are an independent broker or work within a large firm, they will fall into one of these two categories depending on the negotiated relationship with a client.And, of course, we all earn our money from the commissions paid for completing real estate transactions (closing the deal).  Since the seller usually pays the commissions, it is not uncommon for a seller or their representative to try to convince you that you don't need your own representation.  Please don't fall into that trap!  Real estate transactions are a complex legal process and you will be best served by having a trained, licensed professional working for you!

When working with a real estate agent or broker, there are four types of working relationships prescribed by Colorado Law.  You should become familiar with these relationship definitions and decide which one works best for you.

Seller's Agent

A seller's agent (or listing agent) works solely on behalf of the seller to promote the interests of the seller with the utmost good faith, loyalty and fidelity.  The agent negotiates on behalf of and acts as an advocate for the seller.  The seller's agent must disclose to potential buyers all adverse material facts actually known by the seller's agent about the property.  A separate written listing agreement is required which sets forth the duties and obligations of the broker and the seller.

In other words, the Seller's Agent is working solely in the seller's best interest.

Buyer's Agent

A buyer's agent works solely on behalf of the buyer to promote the interests of the buyer with the utmost good faith, loyalty and fidelity.  The agent negotiates on behalf of and acts as an advocate for the buyer. The buyer's agent must disclose to potential sellers all adverse material facts actually known by the buyer's agent including the buyer's financial ability to perform the terms of the transaction and if a residential property, whether the buyer intends to occupy the property.  A separate written buyer agency agreement is required which sets forth the duties and obligations of the broker and the buyer.

In other words, the Buyer's Agent is working solely in the buyer's best interest.

Transaction-Broker

A Transaction-Broker assists the buyer or the seller, or both, throughout a real estate transaction by performing terms of any written or oral agreement, fully informing the parties, presenting all offers and assisting the parties with any contracts, including the closing of the transaction without being an agent or advocate for any of the parties.  A transaction-broker must us reasonable skill and care in the performance of any oral or written agreement, and must make the same disclosures as agents about all adverse material facts actually known by the transaction-broker concerning the property or a buyer's financial ability to perform the terms of a transaction and if a residential property, whether the buyer intends to occupy the property.  No written agreement is required.

In other words, a Transaction Broker helps to "facilitate" the transaction between the parties, equally, without r epresenting one party in favor of the another.

Customer

A customer is a party to a real estate transaction (a buyer or a seller) with whom the broker has no brokerage relationship because the party has not engaged a broker, either as the party's agent or as the party's transaction-broker. Of course, since there is no relationship or representation, there is no written agreement required.

In other words, a customer has no representation and is on their own to take care of their own best interest.

Remember, selling or buying real estate is a very complex and sometimes overwhelming endeavor.  It is usually the largest investment or purchase the average person makes in their life.  A professional Realtor can help take the mystery out of the process, help protect your interests and make the experience a pleasant one!

About Colorado Brokers:

Real Estate Agents in Colorado are all known as Brokers. There are three basic types of Brokers:

Employing Brokers are the head of a multi-broker agency.

Broker Associates work for an agency and an employing broker.

Brokers are independent agents who work for them self or are a partner in an agency where another partner is the Employing Broker of record.

There is no standard Agent Commission set for the Industry.  Each Broker will negotiate the commission structure for each individual listing.

When working with a broker, get everything in writing.  If it is not in writing, it did not happen.  Implied and verbal contracts are messy and difficult to prove.  It is for everyone's protection.