Agency – Ways a Realtor Can Work for You

Introduction
You should understand from the beginning of your relationship with your real estate agent what type of relationship exists. In Colorado, real estate agents (both brokers and associates alike) are required by law to let consumers know whether they represent the buyer or seller.

Brief History of Real Estate Agency in Colorado
In the past, real estate agents represented the seller exclusively, whether the agent helped a seller to market and sell the home or helped a buyer find and purchase the home. In other words, agents were at one time legally bound to represent the seller in a residential real state transaction. In that same scenario, the seller paid both the listing agent and the agent who brought the buyer. However, in today’s real estate market, you can choose between a wide variety of options for representation.

Types of Agency

SELLER’S AGENT:
A seller’s agent works solely on behalf of the seller and owes duties to the seller which includes the utmost good faith, loyalty, and fidelity. The agent will negotiate on behalf of and act as an advocate for the seller. A separate written listing agreement is required which sets forth the duties and obligations of the parties.

BUYERS AGENT:
A buyer’s agent works solely on behalf of the buyers and owes duties to the buyer which includes the utmost good faith, loyalty, and fidelity. The agent will negotiate on behalf or and act as an advocate for the buyer, promoting the buyer’s best interests. A separate written Buyer Agency agreement is required as well.

TRANSACTION BROKER:

A transaction broker assists the buyer, seller, or both with advice, contracting, and closing, without being an advocate for any of the parties. A transaction broker does not work on behalf of the buyer OR seller and does not promote either’s interests.

How agency looks in real life:

Example 1: You see a house advertised on the internet or with a yard sign and you contact the Listing Agent (this is who will be advertising the home) and make an appointment to see the house. The Agent is friendly, informative, and tells you what you believe to be everything about the house. You should realize that the Agent represents the seller, not you.

Example 2: You are working with an Agent, who shows you 25 different homes over 3 weekends. The Agent buys you lunch twice, knows all 4 of your children by name as well as all of your personal likes and dislikes, but does not offer Buyer Agency. You feel comfortable with the Agent, revealing important personal information. Without Buyer Agency, “your” Agent does not represent you, owes you no loyalty, and any information you reveal
to the Agent can be relayed to the sellers.

Who cares if the agent represents the seller?

“Okay,” many buyers say, “so the Agent represents the seller and not me. Is that a big deal?” Maybe not, but it is important to understand that if the Agent represents the seller, they cannot reveal certain things to you, as the buyer. These include:

• The reason for selling (unless the seller specifically authorizes it)
• Any concessions, in price or otherwise, that the seller may be willing to give up.
• Any conversations that the seller and the Agent may have had.
• Any information that could be detrimental to the seller, or give you, the buyer, an advantage.

Other Benefits of having a Buyer’s Agent in Colorado
Buyer agency turns the tables. If a buyer’s agency agreement is struck between you and the Agent, it is YOU rather than the seller, who has the representation from the Agent with whom you are working. If you are represented by the Buyer’s Agent, some of the potential benefits include:

• Save you time searching the market
• Coordinate showings and accompany you, providing helpful analysis
• Help you explore different financing options so you can make the best decision
• Prepare a CMA (Comparable Market Analysis), revealing at what price similar properties in the area have been listed for and sold for.
• Research and provide any information about the seller that the Agent has been able to ascertain. This may include reasons for selling, potential concessions, or other information that may be to your advantage.
• Provide information about property value trends that may
  influence your decision about a certain area can be relayed to you.

Summary
Is it necessary to have a Buyer’s Agent? No. But it is important that you understand your options so that you don’t unintentionally accept less representation than you want.

Buyer Agency is one of the specialized services I provide so please call or write if I can be of any help.

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