Transaction Brokers vs. Buyer or Seller’s Agents

Are you a Colorado homeowner looking to buy or sell? Do you know the difference between a real estate agent and a broker? Are you curious about how an attorney can assist you in the home-buying or selling process? GLO provides one-hour consultations to help you review offers and contracts, strategize negotiations, and prepare customized solutions that prioritize your needs.

What is a Transaction Broker?

Transaction brokers are unique to a few states, such as Colorado, and may not be as well-known as other agent roles. But don’t worry, we’re here to help you understand what they do. In Colorado, a transaction broker is an individual who assists one or more parties in a real estate transaction by providing advice, negotiating, and communicating. Their primary goal is to facilitate your sale or purchase and act as a knowledgeable guide for the parties involved.

It’s crucial to understand that transaction brokers don’t represent you or the other party in a transaction. Instead, they serve an advisory role. A transaction broker maintains neutrality and cannot advise you or any other party about whether you’re getting a good or bad deal, tell you what to do, or disclose confidential information.

What Makes an Agent Different from a Transaction Broker?

If transaction brokers provide guidance during the buying or selling process, you might wonder what agents can offer. Agents essentially act as your representatives during a real estate transaction. In contrast, transaction brokers remain neutral parties, while agents typically represent a single party involved in the transaction. As an agent’s client, you’ll receive advocacy, direction, negotiation, and informed advice regarding potential risks associated with the transaction. 

Can a Transaction Broker Also be my Agent?

Yes, a transaction broker can act as your agent, but you must ensure it’s in writing. Colorado law mandates that any broker form a written agreement with a client to establish an agency relationship. Until a written agreement is signed, a broker remains a non-agent. Therefore, the only way to obtain a broker as your agent in Colorado is to enter into a written contract. Avoid assuming that a broker automatically represents you, as this can lead to misunderstandings and errors.

As with any contract, it’s crucial to seek legal advice before signing anything. At GLO, we can review any written agreements between you and a transaction broker to ensure that a proper agency relationship is being created and that you are being treated fairly.

Why Do I Need a Lawyer When Buying or Selling Real Estate? 

When buying or selling real estate, it’s crucial to consider adding an attorney to your team. While agents can assist you in choosing the right home, finding a suitable location, and negotiating the price, they lack legal expertise and cannot provide any legal advice. Similarly, transaction brokers primarily facilitate the transaction process without any legal involvement.

However, there are some limited exceptions for agents under Colorado law. The primary exception allows agents to interpret and complete state-approved forms for buyers and sellers, such as listing agreements, purchase contracts, and disclosures. These forms strongly advise buyers and sellers to seek legal counsel before signing. For instance, a purchase contract in Colorado carries a prominent headline stating, “This form has important legal consequences” and suggests that the parties should consult legal counsel before signing. For more information on the importance of legal guidance when buying or selling, read our blogs Selling Colorado Real Estate - an Attorney’s Role and Buying Colorado Real Estate - an Attorney’s Role.

Consider the significance of buying or selling a home—it involves numerous contracts and substantial financial transactions. Having an attorney to guide you through the process and help you comprehend the legal implications of your transaction is essential to ensure compliance with the law and make informed decisions that benefit you and your family.

How GLO Can Help

If you are buying or selling real estate in Colorado and want to know more about your rights and obligations, GLO reviews contract terms and ensures that either side understands the process.

If you are buying or selling a home and want an attorney to help modify your contract for a more client focused, customized solution, GLO prepares contracts to buy and sell real estate.

Please fill out an Intake Form to inquire about working with GLO.

GLO has prepared this blog to provide general information on legal issues that may be of interest. This blog does not provide legal advice for any specific situation and this does not create an attorney-client relationship between any reader and GLO or its attorneys. GLO engages clients only through specific fee arrangements and signed engagement letters. GLO does not guarantee any results. 

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