You’re thinking about buying Denver Real Estate and you’re ready to hire a broker to represent you. What you need to know is that we have very specific rules here in Colorado about disclosing and explaining the rules of Agency to our clients and customers.
There are 3 very important reasons to understand the Colorado Agency Rules before you get started:
1. Is Your Broker a Coach? I like to explain to people that an Agent (a Buyer Agent or a Listing Broker) is like a coach. We have a fiduciary obligation to represent your best interests, negotiate on your behalf, uncover issues with the property that are discoverable and disclose any pertinent information we might have or learn. Your coach puts you in the game, advises you how to play and roots for you all the way.
2. Is Your Broker a Referee? If your agent is working for you as a Transaction Broker (sometimes called a TB) then you can think of her as the Ref. The referee runs up and down the field and makes sure the game is played fairly. A TB will owe you the duty of honest and fair dealings, but will not be able to advise you or represent your interests. It’s required that a broker who is working with both the buyer and seller either be a TB or keep the Agency relationship with one client and treat the other as a “customer” – someone he has no brokerage relationship with at all. It’s not inherently bad to have your broker be a TB, but always ask in what capacity is your agent working with you.
3. Do You Have Anyone in Your Corner? If your broker is representing the other party as an Agent and treating you as a customer, you might want to rethink that relationship and get some help and advice. I’m always amazed at the people who will walk into an open house, say they want to make an offer, but also say they want to do it on their own to, “save the co-op commission.” People, really! This is probably the most complex and expensive purchase of your life! Get someone who understands the ins and outs of real estate to help you. If you like the broker at the open house, ask her if she can be a TB (her sellers would have to agree.) You can also ask her to make a referral for an outstanding Buyer’s Agent. You might even want to engage the services of a crack real estate attorney. We aren’t required to use attorneys in Colorado transactions, but someone should be in your corner.
For more information on Colorado Agency Rules, you can visit the Colorado Real Estate Commission site. And one more thing – these disclosures are supposed to be made in writing! Ask your broker for the Definitions of Agency if you’d like a more thorough description.