UNDERSTANDING BUYER
AGENCY IN COLORADO
Thinking about buying a home
in the Denver area? The seller will have professional representation...Will you? You
see, sellers list their homes with real estate agents to assure
professional representation throughout the home selling process. As a
buyer, you deserve the same kind of service.
Real estate agents &
REALTORS® may
represent either the buyer, the seller or the transaction. Is your agent
working for you? How do you know? How can you be sure that someone is
looking out for your best interests?
In Colorado, most listing agents, sellers and/or homebuilders compensate the
buyer agent's brokerage firm that leads to successful closing. There is no "standard" compensation amount or
% - everything is negotiable between parties to the contract. I encourage
you to pay close attention to the contracts because sellers, listing
agents and builders offer a wide range of compensation to the buyer
brokerage firm. Do not sign anything until you fully understand what
your financial obligations are. The stakes are too significant and
potentially too costly - so never assume anything. Work with a
REALTOR® who refuses to rush you
through the process because its a decision you may eventually regret.
Count on Anthony to be patient and walk you through everything and
answer all of your questions - especially things you never knew were
important. I have you back!
In the interest of transparency and full disclosure, Colorado law
requires
agency disclosure to prospective buyers. Every real estate agent must disclose
the types of agency through which he/she can represent you. If you do not sign
a buyer agency agreement, then you are NOT being represented. Don't make this
mistake. Consider your options and outcomes. Here are some facts:
Duties & Obligations |
Using Your Own Buyer's Agent |
Using the
Seller's Agent (aka Listing Agent) |
Arrange Property Showings |
|
|
Keep your bargaining & financial position confidential |
|
Must
inform seller of adverse conditions affecting your buying ability
|
Monitor transaction to closing |
|
|
Assist with financing |
|
|
Disclosure & information |
|
|
Provide accurate information |
|
|
Advise & Counsel |
|
No! |
Promote & Protect your Best Interests |
|
No! |
Exposure to both listed & Unlisted Properties |
|
No! |
Point out Reasons NOT to Buy |
|
No! |
Negotiate the Best Price & Terms |
|
No! |
Writing an Offer with your Best Interest in Mind |
|
No! |
What does hiring a Buyer's Agent do for you? It creates a fiduciary relationship which is one based on trust because
the agent owes the following duties to the client: Loyalty,
Obedience, Diligence, Disclosure, Confidentiality, Accountability and
Reasonable Skill & Care. A duty of loyalty is one of the most
fundamental fiduciary duties owed by an agent to his client because it
obligates a real estate agent to act at all times solely in the
best interests of his client to the exclusion of all other interests,
including the agent's own self-interest.
Real Estate Commissions : How Are Agents Paid?
Navigating Beyond the Headlines to Understand
"How the Sausage is Made"
Now let's address
the headlines and internet memes announcing "Death of 6% commissions
in Real Estate". Many clients, friends and family members have
reached out asking for opinions on how all of this negative media
coverage will impact my business. In order to fully understand what
all the headlines are about, let’s talk about "how the sausage is
made". A lawsuit filed in 2019 in Missouri (aka the
Sitzer-Burnett case with home sellers alleging they should not have to pay a
buyer's agent commission and that the real estate industry was
colluding to keep commissions high by transparently advertising in
the MLS + every single real estate website in the world (zillow,
redfin, realtor.com, remax, etc…) how much a buyer’s agent would be
paid if they were to cooperate ("co-op") with the listing agent and seller by
bringing a buyer to the closing table. This class-action lawsuit was
immediately followed by copycat suits around the country with the
same claim that the National Association of Realtors (NAR) and real
estate brokerage firms were conspiring to set commissions at 6%,
which violated the Sherman Antitrust Act of 1890. In October 2023,
the case went to a jury and after only a few hours
deliberating, the jury ruled in favor of the plaintiffs (home
sellers). In early 2024, NAR along with several brokerage firms
settled with the plaintiffs for hundred of millions of dollars and
agreed to implement two new rules effective in August 2024:
1) Sellers and listing agents would be prohibited from advertising
a buyer's agent co-op commission in the MLS (Multiple Listing
Service) or any website that receives its data from the
MLS
2)
Buyer Agents are now required to have a Buyer Broker Agreement
signed with a buyer that outlines compensation, duties and both
party's rights and responsibilities... YES and NO...keep
reading:
*Colorado has
offered a Brokerage Disclosure to Buyer or Buyer Listing Contract
for decades.
Unlike many parts of the country, Colorado Law does NOT
require buyers to a sign a agreement before touring homes.
Therefore, any
agent that refuses to show you a property unless you sign a
document first is not being truthful and may actually be in
violation of the law. Make sure you fully understand what the
document says and if the agent passes it off as mandatory or
something they are required to do by law, respectfully decline
and understand that by signing, you may be locked you into a Buyer
Broker Agreement that obligates you to work with that agent or
company for a specified period of time (1-day to 1-year) AND
compensation agreement detailing the amount of money (expressed
as % or $) that you will be responsible
for paying. Proceed with caution. If you ever feel
like an agent is
pressuring you to sign a document just to show a home that, I
encourage you to please call the The Colorado Division of
Real Estate at 303-894-2166
Here is the Colorado Real Estate Commission's
Brokerage Disclosure to Buyer (effective August 14,
2024)
Colorado law does not
require buyers to sign an agreement for compensation before
touring a property. However, if you want a broker to represent
you as a buyer agent, you will eventually need to sign an
Exclusive Right to Buy Listing Contract with them. This
agreement defines the relationship between you and the
Agent/Realtor, establishes expectations, and protects both
parties. It can also help build trust between the two parties by
ensuring that your agent is looking out for
your best interests.
Should You Hire a
REALTOR?
Everything You Need to Know About
Hiring a Buyer's Agent
Buyer Broker Agreements
Buyer Agent Compensation &
Disclosures
Real Estate Agent Commissions
Mortgages, Loans &
Investment Protection
Buyer 24-Month Investment
Protection Program
Financing Options - Understanding mortgage terms and options
Monthly Mortgage & Payment Calculator
How Much Can You Afford?
Down Payment
Assistance Programs : metroDPA | metroDPA Social Equity
Pre-Qualify for a Mortgage Loan
Now!
* Union Home Mortgage - Tiffany
Swisher @ 303.884.4137
* Home
Mortgage Advisors - Deana
Hollstein @ 303.818.0522
* Nexa
Mortgage - Lainie
Chambers @ 720.495.2788
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REMAX
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