When you buy or sell real estate in Colorado you have two relationships you can have with your Colorado agent. Your agent can be a Transaction Broker or a Buyer or Seller Agent.
Transaction Broker Relationships
Most agents prefer to be a neutral third party and act as Transaction Brokers. Sometimes they don’t point out that you have options and will only offer to work with you as a Transaction Broker. As a Transaction Broker, there is no obligation to do the utmost to work on your behalf. They only owe you honesty and fairness regarding your transaction. Their job is defined as assisting Buyer and/or Seller with the transaction but not working as an advocate for either party.
Our preference is to represent you as a Buyer’s or Seller’s Agent. That means that we are your advocate working with your best interest in mind. We must look out for you at the same level we would if we were buying or selling our own property. We love to be a bulldog, working on your behalf. A Transaction Broker must be neutral, meaning that they cannot pass on confidential information on either side. As a Buyer’s or Seller’s Agent we will tell you about any additional motivation of which we are aware and at the same time, will not reveal your motivations to the other side.
There is a third type of relationship known as a Customer. That Colorado agent relationship is basically no relationship at all. You are on your own with no guidance from an agent. To have this type of relationship, the agent would already have a working relationship with the Buyer or Seller. Anything you tell them could certainly make it back to the party they are working for.
A Sports Analogy
Another way to look at the difference between the Colorado agent relationships is with a sports analogy. A Transaction Broker is like a referee making sure both sides play by the rules. They have no stake in who wins as long as you finish the game. An Agent is like having a coach. The coach is going to do everything possible to help his or her team not only finish the game, but win. As a Customer, you are a team without a coach. Sometimes that can feel like you are getting your plays from the water boy.
Would you prefer to have a coach, referee or water boy helping you with your real estate transaction?
Ultimately, it’s your choice. The amount paid to the agent is generally the same regardless of the Colorado agent relationship. By default, you are in a Transaction Broker relationship. You must sign a contract to have an Agency relationship. It’s important for you to know that signing a contract doesn’t necessarily mean you have an Agency relationship. Make sure you understand your broker relationship and know how you are being represented.