Seller's Representation: Why it Matters & What are the Options

There are two basic ways a real estate broker can work with a Seller.  They can act as a transaction broker or as a seller’s agent.  So, what’s the difference?

Transaction Broker
According to the Division of Real Estate’s definitions of working relationships, “A transaction-broker assists the buyer or seller or both throughout a real estate transaction by performing terms of any written or oral agreement, fully informing the parties, presenting all offers and assisting the parties with any contracts, including the closing of the transaction without being an agent or advocate for any of the parties. A transaction-broker must use reasonable skill and care in the performance of any oral or written agreement, and must make the same disclosures as agents about all adverse material facts actually known by the transaction-broker concerning a property or a buyer’s financial ability to perform the terms of a transaction and, if a residential property, whether the buyer intends to occupy the property. No written agreement is required.”

Although a transaction broker does not advocate, they must still use reasonable skill and care in carrying out statutory duties and responsibilities including:  Use reasonable skill and care, deal honestly and fairly, provide proper disclosures, respect the confidentiality of the parties, account for property or things of value, and disclose material defects.  A transaction broker may write contracts, prepare CMA’s and inform customers of possible choices; however, they cannot provide recommendations (such as which choice to make or what price to offer).

Seller’s Agent
According to the Division of Real Estate’s definitions of working relationships, “A seller’s agent (or listing agent) works solely on behalf of the seller to promote the interests of the seller with the utmost good faith, loyalty and fidelity. The agent negotiates on behalf of and acts as an advocate for the seller.  The seller’s agent must disclose to potential buyers all adverse material facts actually known by the seller’s agent about the property. A separate written listing agreement is required which sets forth the duties and obligations of the broker and the seller.”

An agent works FOR their client.  They owe their clients the fiduciary duties of obedience, loyalty, disclosure, confidentiality, accounting and the use of reasonable skill and care.  This relationship allows the real estate professional to provide professional, ethical and expert real estate services by promoting the interests of their clients, seeking a price and terms that are acceptable to their client, and counseling their client about any benefits or risks the agent knows about.

A good analogy I once heard is that a transaction broker is similar to a referee, whereas an agent is more like a coach.  Most sellers prefer the additional duties an agent provides because it gets their property sold at the best price and terms possible.  And, most real estate professionals prefer to work as agents rather than brokers because it allows them to provide the best possible service to their clients.  However, it is entirely up to you and your real estate professional as to which way you want to work together. 

Colorado Springs Real Estate Professionals – TEAL Pro Team backed by EXIT Realty Mountain View

Natalie Olmsted and Jennifer Mencl are motivated REALTORS® specializing with Future First Time Home Buyers and Last Time Home Sellers located in the following areas; Colorado Springs, Pueblo, Monument, Peyton, Fountain, and surrounding areas. Natalie and her team strive to provide you the very best service to make your real estate experience stress free. Call Natalie Olmsted at 719.287.8067.