When you work with a real estate professional in Colorado, there are 3 types of relationships available between that broker and you. These relationships are established when an agency agreement is signed between you and the broker. The definitions below are per the Colorado Real Estate Commission (CREC) and can be found on the Definitions of Working Relationship form that they provide. I have attached a copy here for you to download as well.
There’s a common theme throughout that I feel is important to call out: as an agent, it is our duty to show the utmost integrity and work with honesty in all of our dealings. For me, I go into every transaction with the intention of closing. I believe in thoughtful transparency and collaboration across the board. While there may be a buyer and a seller in a transaction, we all represent the real estate industry and every person we work with, whether we have an agency agreeement with them or not, deserves respect and the best possible experience.
When we work together, you will hear me refer to this as a win-win. It is my negotiation style to find a solution for both parties. Value is not just a price tag and can be found in other ways.
CREC DEFINITION: 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.
REAL ESTATE SIMPLIFIED: If you are a homeowner, this is the agent that will list and sell your home on your behalf. If you are a buyer, this is likely to be the agent on the other side of the transaction and the point of contact for the agent helping you to buy.
Worthy of note here is that while the seller’s agent has fiduciary responsibility to protect they best interests of the seller, they must also disclose any adverse material facts even if the seller chooses not to.
In most transactions, the seller pays the selling agent, who then splits that commission with the buyer agent.
CREC DEFINITION: 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.
REAL ESTATE SIMPLIFIED: If you are buying a home, this is the agent that will help you with your search and will negotiate on your behalf. If you are selling your home, this is the agent representing your buyer who submits the offers to your listing agent.
Just as is the case with a seller’s agent, while a buyer’s agent has fiduciary responsibility to protect the best interests of the buyer, they must disclose any adverse facts that would prevent the buyer from completing the transaction.
In most transactions, the buyer is paid by the seller’s agent, who is paid by the seller.
CREC DEFINITION: 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
REAL ESTATE SIMPLIFIED: A TB, as we call it, assists in a transaction and can be on either the buyer or seller side. A TB is not an advocate, they do not have agency, and thus should not be privy to any information that would require fiduciary protections. Instead, think of a project manager simply guiding parties through a transaction. However, like an agent, they must disclose any known adverse materials.