Agency
- Per CO law a Broker is required to advise you of the different types
- Agency or Transaction Broker
- We assume the responsibility and liability of being your "Seller's Agent"
- We will be a transaction broker only if we have a buyer.
When buying or selling real estate, you may decide to hire a real estate broker to assist you. At the time you begin a serious discussion of your real estate needs with a Colorado real estate broker, the broker should discuss brokerage services with you. The broker is required to advise you of the type of services the brokerage is going to provide. Colorado Law recognizes these services as the brokerage relationship.
There are two primary types of brokerage relationships: Agency and Transaction Brokerage. In this section, buyer also means tenant and seller means landlord.
Agency
Agency is a legal relationship resulting from an agreement that one person, called the agent (broker), shall act for and be subject to the control of another person, called the principal (buyer or seller). The fact that a real estate broker performs some acts for a purchaser or seller in a transaction does not itself create the agency relationship. In Colorado, the agency relationship can only be established through a written contract which constitutes the employment agreement between the principal and agent.
Both buyers and sellers can hire agents to represent their interests in a real estate transaction. Agency relationships include Buyer Agency and Seller Agency. The agency contract commonly binds you to a working relationship with that broker for a specified period of time. A broker engaged by a buyer or seller in an agency capacity has specific duties and obligations.
Buyers often use the services of the seller’s broker to prepare and submit an offer on property. In this instance, the broker is still responsible for making a disclosure to the buyer concerning their working relationship. If the broker assisting the buyer is representing the interests of the seller only, the broker must give the buyer a written disclosure to this effect.
Transaction Brokerage (Non-Agency)
If you do not choose to hire a broker to represent you in an agency capacity, a broker may assist you as a transaction broker. A transaction broker is one who assists a buyer, seller, or both throughout a real estate transaction without being an agent or advocate for the interests of either the buyer or seller.
Unlike Agency, Transaction Brokerage does not have to be established through a written contract. Transaction brokerage can be established through written disclosure. The disclosure defines the broker’s duties and responsibilities and is not a contract. The transaction broker disclosure does not limit you to the services of any one broker. If done through a written contract, the contract is an employment agreement which binds you to the broker for a specified period of time.