The sentence that has stopped many a date in its tracks. This conversation will be much easier, I promise, but not less important if you want to protect your financial interests. The working relationship you adopt with your real estate agent will outline their responsibilities and your risk. In the state of Colorado, there are 4 defined and allowable types:
- Seller's Agent. A Seller's Agent is a representative of the seller, advocating for her client and looking out for their best interests. She prepares necessary documents and advises the seller on process and negotiations. Everything a client tells a seller's agent must remain confidential, and anything pertinent the agent discovers about the buyer must be reported back to the seller. The agent works on behalf of the seller with the utmost good faith, loyalty and fidelity. An agreement must be signed in order to create this relationship.
- Buyer's Agent. As you can probably guess, the Buyer's Agent is a representative of the buyer. She advises, negotiates and protect the interests of her client, just as a Seller's Agent does. Everything discussed between the buyer and buyer's agent must remain confidential, and the agent must follow the buyer's directions as long as they are not illegal. An agreement must be signed for this relationship, as well.
- Transaction Broker. A TB is a neutral facilitator of a transaction, and in the absence of a seller or buyer agency agreement this is the default relationship. Once an agent begins to act on behalf of another person, this relationship kicks in. The TB prepares documents and must keep information confidential, but they cannot advise a client on what to do or advocate on their behalf. This relationship may be retained if a client is uncomfortable with making a commitment to only working with one agent, or during a double-ended deal. This is when the agent is working for both the seller and buyer on the same transaction. In the state of Colorado, Dual Agency is not allowed, meaning the agent cannot be an advocate for both parties. The stats commission feels there is no way to accomplish this without a conflict of interest, but they do allow a TB to perform every other act necessary to complete a real estate transaction.
- Customer. A customer is a party that an agent may be helping but with which she has none of the relationships above. An example of this would be an unrepresented buyer attending an open house that a Seller's Agent is hosting. If the customer requests it, a Seller's Agent can help the buyer draw up an offer for the property but remains loyal to the seller. This is permitted as long as the customer understands the restrictions of the situation and is comfortable representing themselves in the transaction.
Real estate agents are required to provide this information to a potential real estate contact as soon as possible during an encounter that may result in a business relationship. To protect the public, agents are encouraged to have these definitions printed at open houses and signed before touring houses together or otherwise exchanging any information besides pleasantries. If the agent you encounter doesn't explain the relationships above in some fashion before making inquiries into your real estate needs, this should be a consideration as you make decisions about with whom to work.
I would love to help you with your real estate journey.
Please contact me at 303-917-7143 or robbin@elevatedrealestate.com
