When you buy or sell a home in the Boulder area, there are different ways to engage with real estate professionals. The state of Colorado has a great document, Definitions of Working Relationships, that explains the difference between Seller’s Agents, Buyer’s Agents, Transaction Brokers, and Customers. In this blog, I will share these definitions and some insights.
When looking to purchase a home with the help of a Realtor, people will often hire a Buyer’s Agent. According to the Definitions of Working Relationships:
“A Buyer’s Agent works solely on the 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.”
When would you want to engage a buyer’s agent? If you want a real estate professional to advise, advocate and negotiate for you in the purchase of a property, you should engage their services through a buyer’s agreement before you start house hunting so that if and when you find a home, you are able to have them advise and advocate you! I also advise having an agency agreement in place before you share any financial or personal information.
Although some people do not know this, you can also hire a Buyer’s Agent to guide you through the purchase of a new-home build. Often, the builder will only allow this representation if you bring your Realtor with you when you first visit the builder. Otherwise, the Builder’s Representative will represent the Builder and treat you as a customer, leaving you to negotiate for yourself. Having a professional in your corner is invaluable when buying a new-build or an existing home!
When looking to sell a home with the help of a Realtor, people will often hire a Seller’s Agent. According to the Definitions of Working Relationships:
“A seller’s agent (or listing agent) works solely on behalf of the seller to promote the interest 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.”
If you are looking for a real estate professional to assist you in selling your home and want that Realtor to not only guide you through the process of listing and selling your home, but to strategize, advise, advocate and negotiate for your best interest, you will want to hire a Seller’s Agent, also known as a Listing Agent. There is a state form for this called the Exclusive-Right-to Sell Listing Contract.
By law, a transaction broker is neutral and cannot act in the seller or buyer’s interest. The role of the transaction-broker is defined in the Definitions of Working Relationships as:
“A transaction-broker assists the buyer or 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 use 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 a 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.”
If you prefer this very neutral approach then this might be the best option for you. However, a lot of buyers and sellers want someone they can rely on and feel like is really in their corner.
It is important to note that if you do not have a signed Buyer’s areement, your relationship with your Realtor is, by default, a Transaction-Broker!
The final term defined in the Definitions of Working Relationships is the Customer:
“A Customer is a party to a real estate transaction with whom the broker has no brokerage relationship because such party has not engaged or employed the broker, either as the party’s agent or as the party’s transaction-broker”.
This could happen, for example, when a person is selling their property as an FSBO (For Sale By Owner) and the buyer has engaged the services of a Realtor to assist them. To learn more about For Sale By Owners, check out my blog here!
How Can I Help?
Do you have further questions regarding choosing between a Transaction Broker vs. Buyer’s Agent or Seller’s Agent? Please reach out to me! As we start this new year, I want my clients to know I am here for them. I am still keeping social distancing guidelines when it comes to showings for my listed properties as well as taking the utmost care when showing my buyers homes. If you have any questions or concerns, please feel free to reach out and contact me! I will continue to provide my clients with interesting and up-to-date information so they can make informed decisions. If you are planning on buying or selling a home in the near future and you think that my expertise and positive attitude might be of service to you don’t hesitate to reach out and contact me!
If you would you like more information about the Boulder area or the real estate market specifically, click here to download my current market report on the area or visit this link – http://elisabethnelsonrealestate.com/market-report-newsletter/
Luxury Home Specialist & New Home Specialist
Coldwell Banker Realty
(303) 916 5859