by Dana Garrett
Colorado is a bit unique in that we are a single-license state. Once you have your real estate license, you are an associate broker. Colorado requires new licensees to be supervised by an employing broker for the first two years after licensure. After two years of experience, there is the option of upgrading to an independent license or, with enough experience, taking some more education and becoming an employing broker.
As a broker, we create agency relationships with our clients. In Colorado, the default is to a transaction broker, meaning you are a broker for the transaction and have no agency agreement with either buyer or seller. Think of this as being a referee for the parties. You can do the paperwork but cannot negotiate or advise either party. As a referee, you are making sure the game is played by the rules to the outcome. Also, a few personal relationships preclude being a transaction broker, such as working on your transaction with a family member, close personal friends, business associates, and repeat clients. It isn’t easy to remain a neutral party when you have a relationship with confidential knowledge of such a party.
Even with the default of transaction brokers, we still have uniform duties we must provide to buyers or sellers. These include using reasonable skill and care, informing actual knowledge about the transaction, presenting all offers, following instructions, disclosing information like adverse material facts, and accounting for any money and documents. There are also things you cannot reveal, like motivating factors of why you want to buy/sell this property.
You have now become a coach for your client. You can now advise and counsel them about the benefits and risks and work to promote their interests. You can create a buyer or seller agency agreement with a written agreement between the client and broker,
A listing agent is responsible for “listing” property for sale, meaning you are working with someone to sell their property.
A buyer’s agent works with the buyer to find and facilitate property purchases. Sometimes you will see this as a selling agent, meaning you are working to sell a property to a buyer.
Dual agency is not allowed in Colorado, meaning you cannot have an agency agreement with the buyer and seller. If you have a previous agency relationship with either a buyer or seller, that party can either choose to have you become a transaction broker as allowed, or you can treat the other party as a customer. A customer is someone with no agency relationship. Still, as a broker, your obligations to a customer in a transaction include honesty and fair dealing, reasonable care and skill, and disclosure as needed.
