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Buyer Agency: The Role of a Buyer’s Agent

Posted on March 26, 2013 by Curt Schreiber in Uncategorized

Buyer Agency
 

The Role of a Buyer’s Agent

Before 1994 in Colorado, both listing agents and selling agents represented the Seller, who normally paid the commission, in a real estate transaction. Today, listing agents still usually represent the Seller and Buyers can be represented by an agent or be assisted by a transaction broker who does not represent them. Buyers have a choice! Sellers still pay the real estate commission to the listing broker. That broker normally pays one half of the commission to the office of the selling broker, who then pays part of the commission to the selling agent. In Colorado, a Buyer’s Agent can be (and usually is) paid essentially by the Seller so a Buyer’s Agent costs you nothing.

Colorado has a written Agency Disclosure which is required to be given to all Buyers when they begin to work with an agent. There is an acronym frequently used to summarize the duties of a Buyer’s Agent and it is CARLOAD.

carloadfull

These duties of a Buyer’s Agent give the Buyer some very significant benefits and advantages:

  1. Buyer Agent’s total commitment to the Buyer
  2. Levels the playing field for the Buyer in a transaction
  3. Results in a “Market Wise” Buyer
  4. Buyers receive maximum effort from Agent on their behalf
  5. Buyers receive exposure to the entire market
  6. Strongest possible protection for Buyer’s interests
  7. Assurance of privacy for Buyer’s information
  8. Advice from Buyer’s Agent in negotiating
  9. Peace of Mind for the Buyer

 

Is a written agreement required?

Yes. In order to protect Buyers, the State of Colorado has determined that a Buyer Agency must be created in a written agreement which defines the Agent’s responsibilities and services to the Buyer. The State of Colorado requires the use of its standardized form by all real estate agents, unless an attorney for the Buyer or the broker drafts a different form. We use the Colorado approved form and simply insert any special requirements of the Buyer, as is allowed by the state.

What about new condo or townhome developments?

I can represent the Buyer here as well. Builders all over Northern Colorado seek out the assistance of Realtors and Buyer’s Agents, since we generally sell 50% or more of their product. Many times, special incentives are announced to Realtors for their clients.

It is tempting to drive around on your first visit to the area and stop at model homes and open houses. In order to be represented by an agent, Buyers must have the agent with them when they first visit the model or open house. If you are asked to register, tell the onsite salesperson that you are working with an agent and you will return to register with your agent if you are interested in their development.

Remember: The onsite sales person represents the Builder and so a Buyer should have representation as well.

Frequently, builders use a purchase contract drafted by their attorney rather than one approved by the State of Colorado. Obviously, their contract protects them more than it does you and a Buyer’s Agent can alert you to potential pitfalls and help protect your interests.

“Buyer Beware” is no longer sufficient to assure an informed decision is made where real estate is concerned. Each state has different laws, regulations, costs and customs. There are contract addendum, deadlines, disclosures, inspections, title commitments and mortgage approvals to be concerned with. Representation for the Buyer is critically important today!


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