Buyers Agent vs Transaction Broker Back to Previous Page GO TO MAIN INDEX PAGE
The Colorado Real Estate Commission in 1994 adopted two new ways that a real estate agent could act on a buyers behalf. Prior to this time, the norm throughout the United States and in Colorado, was that Buyer had no representation from the real estate community. Often buyers thought that the agent that was taking them to see houses was "their agent" while in fact that agent was the agent of the "sub - agent" of the seller.
Now there is the BUYER'S AGENT option that can be created ONLY with a signed contract, and the TRANSACTION BROKER option that can be in writing or by mutual understanding between the Buyer and the Colorado Real Estate Agent.
BUYER'S AGENT: A buyer's agent works solely on behalf of the buyer and owes duties to the buyer which include the utmost good faith, loyalty and fidelity. The agent will negotiate on behalf of and act as an advocate for the buyer. The buyer is legally responsible for the actions of the agent when that agent is acting within the scope of the agency. The agent must disclose to potential sellers all adverse material facts concerning the buyer's financial ability to perform the terms of the transaction and 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 parties. This agreement must be made prior to the real estate agents taking an active role on the buyers behalf.
TRANSACTION BROKERAGE: A transaction-broker assists the buyer of seller or both throughout a real estate transaction with communication, advice, negotiation, contracting and closing without being an agent or advocate for any of the parties. The parties to a transaction are not legally responsible for the actions of a transaction-broker and a transaction-broker does not owe those parties the duties of an agent. However, a transaction-broker does owe the parties a number of statutory obligations and responsibilities, including using reasonable skill and care in the performance of any oral or written agreement. A transaction-broker must also make the same disclosures as agents about adverse material facts concerning a property or a buyer's financial ability to perform the terms of a transaction and whether the buyer intends to occupy the property. No written agreement is required. The Colorado Real Estate Commission does have a written Transaction-Broker Agreement for parties wanting a written agreement.