Colorado Buyer, Seller Agent and Transaction Broker
In Colorado all real estate agents are actually brokers. There are employing brokers and associate brokers. The main difference is the employing broker actually "employs" the associate broker. I put employs in quotes because associate brokers are independent contractors that hang their license under the employing broker.
What is a Seller's Agent?
The seller's agent is also called the listing broker. They are the ones that list your home, market your home and advise you on the things you need to know during the selling process. They work solely on the seller's behalf to promote the interest of the seller with the utmost good faith, loyalty and fidelity. The broker negotiates on the behalf of the seller and is an advocate for the seller. What does all this mean? The broker is your best friend while you are selling your home. You can tell him everything. The only thing he is obligated by law to disclose is a material fact about the property. A material fact may be something like your foundation is slowly sliding down the mountain or your leaks too much so you want buyers to only see it on sunny days. Other than things of that nature the broker can not disclose any other information. He can't tell a buyer or buyer agent that you are going through a divorce so you may take half of what you are actually asking.
What is a Buyer's Agent?
A buyer's agent is the broker that works strictly with promoting the interest of the buyer. With the same good faith, loyalty and fidelity that the listing agent does with their client. The broker negotiates on behalf and acts as an advocate for the buyer. Just like the seller's agent has material facts they must disclose by law, so does the buyer's agent. The buyer's must disclose if the buyer is unable to fulfill their financial obligation to buy the property. In other words they must tell the sellers if they know that the buyers have been shot down by their lenders or if the buyers say "we don't have the money needed at the closing table and we don't think we can get it". The reason for this is it isn't fair to the seller to keep their home off the market for 2 months if the buyers have no ability to close the transaction. Another thing the buyer agent must disclose is weather or not the buyer plans to occupy the home or not. This one I imagine is for the truth in lending. Most mortgage companies base their rates on the type of occupancy such as investment property, second home or primary residence.
What is a Transaction Broker?
In Colorado a transaction broker is a broker that "holds the hand of both parties" through the transaction. They assist both buyer and seller by performing terms of any written or oral agreements, fully informing both parties, presenting all offers and assisting all parties with any contracts including closing of the transaction without being an agent or advocate for any of the parties. The broker still must use reasonable skill and care just like the other brokerage relationships. They also must disclose any of the above mentioned material facts for either party.
Does Colorado have dual agency?
Nope! Colorado does not have dual agency. This is one thing I strongly agree with the Colorado Real Estate Commission with. Never could figure out brokers could truly be a good dual agent and represent both sides fairly. How can someone tell one person "list your home for $500k" and tell the other person "that homes only worth $475k"? That never made much sense to me so I am glad that the commission got rid of dual agency.
This is a basic lesson in the types of agency available by most Colorado brokers. If you have any questions or concerns I suggest you call me or your attorney to explain these better to you.
This isn't legal or real estate advise. It's just he views of a Realtor.