Imagine finding your ideal home with the help of a superhero – in real estate terms, that would be your Realtor!
In Colorado, new licensees are known as associate brokers and must be under supervision by an employing broker for two years prior to being allowed an independent license. With further education and experience comes an upgrade.
Buyer Agency Agreement
Home buying can be an enormously consequential decision, so having a buyer agency agreement in place is essential. This helps both parties understand what to expect of each other while giving your agent assurance they will assist you in finding your dream home. Furthermore, this ensures they won’t compete against other real estate agents for your business and focus on you instead of competing against them for your business.
A typical buyer agency contract will include a clause outlining termination rights. It’s essential that this section be carefully read as it should cover a range of scenarios; such as grounds for termination, required notice periods and whether any additional fees are owed to your broker. Reviewing it together is key so both parties are clear about how the relationship will conclude.
In your buyer agency agreement, your agent should detail their responsibilities to you in this section. These typically include aiding with home search efforts, scheduling open houses, writing offers and submitting them, as well as negotiating mortgage paperwork. Some contracts also allow your agent to act as a transaction broker who works on both sides without advocating for either party in any particular transaction.
Some contracts will also include details regarding how your agent will be compensated. Usually, home sellers are responsible for paying both listing and buyer agent commissions in most instances; however this may differ. There may also be a compensation section detailing this matter further as well as details on how to calculate commission amounts.
Another key area to keep an eye on is term length. You have complete freedom over how short or long you want the term to be and should discuss this with your broker prior to entering into any contract agreement with them. While some contracts only last 90 days or two years at most, so make sure your agent discusses options that best meet your needs when selecting your term length.
Seller Agency Agreement
A Seller Agency Agreement, also referred to as a listing agreement, is a written contract that establishes a relationship between a homebuyer and their agent. It details their respective duties and responsibilities to one another as well as compensation due. Furthermore, this legal framework ensures a smooth real estate experience.
A listing agreement will outline all of the tasks that an agent can carry out for you, such as finding properties to view and attend open houses, submitting and negotiating offers on your behalf, helping with closing paperwork and other details of the transaction, as well as your rights if not satisfied with services being rendered. It will also detail cancellation or termination if services provided do not meet expectations.
Your listing should also contain details of the property that you are selling so the real estate agent can market it effectively to prospective buyers. This ensures they can see first-hand its true condition and understand your asking price.
Dependent upon the brokerage you work with, your agency agreement may specify whether or not your broker is acting as either a seller’s agent, buyer’s agent or transaction broker. Historically in Colorado many brokers operated as both seller’s agents and sub-agents for buyer clients – creating legal complications and subjecting all parties involved to liability risks. Since 1994 however Colorado has established a clear framework that distinguishes roles such as seller’s and buyer’s agents from that of transaction brokers.
If you’re concerned that a real estate agent does not meet your expectations, ask them to include a term length of at least 90 days in their contract so that if things go sour with service received you can cut ties before it ends and find another agent; most brokerages won’t hold it against you for seeking another agent out before their term has expired.
Exclusive Right-To-Buy Contract
Homeowners traditionally would contact their local real estate agent and grant them exclusive rights to sell their home. This allowed the agent to place it on the market and receive commission for their efforts; however, this arrangement comes with some drawbacks; such as not getting what you want out of marketing efforts or finding suitable buyers – you won’t have another real estate agent until your contract’s duration has run its course (unless your contract allows cancellation options).
This type of agreement ensures that agents will get paid if a home is sold, regardless of which buyer brings them to closing table. It may make more sense for sellers who cannot afford to lose out just because they dislike how their property is being promoted, and also can benefit buyers who might otherwise feel reluctant working with agents who are not exclusive.
Buyers also have the right to terminate an exclusive contract if it no longer meets their needs, but should understand its financial repercussions before doing so. Agents still owe commission even if you buy property without using them as your representative.
Broker Beatrice meets with prospective buyer Buyer Bob to discuss the terms of an exclusive right-to-buy contract. However, Buyer Bob is unrealistic about his budget’s availability so doesn’t think anything will come up soon enough for purchase. Nonetheless, Buyer Bob agrees to an exclusive right-to-buy agreement but won’t sign until he finds something suitable.
Buyer Bob begins looking at properties with other agents during his property search, which goes against his exclusive right-to-buy contract with Broker Beatrice but it’s common practice among homebuyers to investigate various homes with multiple agents before making their choice. Luckily for Broker Beatrice, her contract allows this as it contains a clause stating that Buyer Bob may collaborate with multiple agents if he or she hasn’t entered into an exclusive contract with any specific seller of a given property.
Commission
Real estate agents play an invaluable role in the home buying and selling process. They provide expert guidance, help clients understand complex issues, negotiate on behalf of their clients and comply with state regulations. In addition to adhering to ethical standards and disclosing all material information to clients without discriminating based on race, religion, national origin or gender.
Opting for the appropriate agent can save both time and money when it comes to your next real estate transaction. Before hiring one, however, it’s essential that you fully comprehend their commission fees – they are determined by average home prices, state of housing market and other factors as well as type of property and individual circumstances; such as if a home needs to sell quickly when priced competitively an agent might negotiate lower commission fees with potential sellers.
Colorado real estate agents must obtain a license before conducting business, with this process including 168 hours of pre-licensing education and passing an exam comprising of 100 national questions and 70 state-specific ones; applicants can take this exam online or at approved schools, with those taking pre-licensing coursework enrolling in an exam prep course for increased chances of success.
Once an individual has obtained their real estate license, they can either work through a broker or directly for their client. Depending on the role played by an agent, commission may be earned from both seller and buyer transactions; should their broker fail to pay this commission as promised, an agent can file a claim under Colorado Commercial Real Estate Commission Security Act.
Real estate industry changes are rapid, but its foundation remains steady: buyer and seller representation are core principles that remain relevant in today’s real estate marketplace. Both buyers and sellers stand to benefit from professional guidance, negotiation expertise and other aspects offered by dedicated real estate agents.