Home Buyer Representation in Colorado
Will your 'Agent' have your best interests in mind? Many buyers assume that aside from personality traits and experience, Realtors are all the same. It’s no wonder why so many folks have had a bad experience with real estate agents. Much of it boils down to whether or not the agent is an effective communicator. As a buyer, you can’t possibly know all that is involved within a transaction and what to look out for. Therefore, you instill trust in the agent you work with to help guide you through the process and who has your best interests in mind, right? But guess what? It’s becoming more common that agents do not have your best interests in mind. Let’s get this cleared up, shall we?
There are two main ways a real estate agent can serve a buyer in Colorado; as a ‘Buyer’s Agent’ or ‘Transaction-Broker’
Click here to see the actual state document with full definitions.
A Buyer’s Agent “works solely on behalf of the buyer to promote the interests of the buyer with the utmost good faith, loyalty and fidelity. The agent negotiates on behalf of and acts as an advocate for the buyer." A written “buyer agency agreement is required” for a real estate agent to look out for your best interests.
A Transaction-Broker “assists the buyer or seller or both… without being an agent or advocate for any of the parties…. No written agreement is required.”
If a Colorado real estate agent is serving as a ‘Transaction-Broker’ then they are not able to look out for your best interests. They become a referee rather than a coach that wants to see you succeed throughout every step of the transaction. They aren't able to advise and counsel you, promote and protect your best interests, point out reasons not to buy, negotiate the best price and terms for you or assist with writing an offer with your best interests in mind.
Here are a few tips on interviewing agents:
- See if the agent offers you the ability to terminate your working relationship at any time if you’re not satisfied for any reason.
- Let them do the talking and see if they bring up to you how they’ll be serving you (as a Buyer’s Agent or Transaction-Broker). If by the end of the meeting, they haven’t brought up which way they’ll be serving you, it ought to be cause for concern because they haven’t explained the most basic thing you want to know; are they looking out for your best interests or not?
- See if the agent is prepared and has a specific process in place when assisting buyers, including a complete questionnaire that is designed to benefit both you and the agent to help clarify your needs, wants, expectations and time-frame.
Considering that there are literally hundreds of tasks involved in a typical transaction, it’s a big red flag if the agent is going off the cuff with your initial consultation and likely means that he or she doesn’t have the systems in place to ensure that you’re receiving the highest level of customer service throughout your transaction.
- Although the term “Buyer’s Agent” gets used a lot, don’t assume that the agent is serving you as one. It’s also assumed that all agents are “Realtors” but did you know that only about half of the real estate licensees in Colorado are Realtors (there are currently about 46,000 real estate licensees and only about 24,000 of them are Realtors)?
- As long as there is no paperwork establishing a working relationship, then the real estate agent is serving as a Transaction-Broker, so make sure that is what you want.