How does a REALTOR become your agent? or your broker?
Is there a difference?
The real estate professional you have been talking to only becomes your agent through a contract. This can make it hard in some situations, because a lot of people shut down when they have to sign a contract. But in reality, this contract is probably one of the safest for a potential buyer out there.
So let’s start by identifying the roles. Basically what it boils down to is that a real estate professional can either be your Agent, or your Broker. The real difference is something called “Fiduciary Responsibility”.
Fiduciary Responsibility is a term in agency law (the group of laws that define what agency is) that states that an agent has the responsibility of acting in their client’s (you) best interests at all times. An agent has the fiduciary responsibility of their client, while the broker does not.
In other words, an agent always has to look out for you and help you make the right choice in every way they can, a broker does not.
How do you know which one you have?
This is the first part of the contract that you sign together in order for this person to represent you.
Beyond that, the agency agreement is pretty straight forward. There is an area that defines the term of the contract (how long you will look for houses), how much the agent will make (it is very rare that you will actually pay an agent to buy a house. The agent is almost always paid with the money that the seller makes from their sale), your responsibilities and the agent’s responsibilities, the price range you want to look for. Very thorough, but clean cut.
But if it seems like your agent is in a hurry to get this signed, it’s because of three reasons. The first is that they cannot do anything for you without this contract being signed, legally not even give advice. And the second reason is that this contract is super easy to get out of without being penalized – all you have to do is say that you want out! As long as you are not engaged in a contract to buy a home, it’s as simple as that!
But the biggest reason is that this contract is not something that is written by him, or his company. This is written by the Colorado Real Estate Commission. Actually, any contract written by a real estate professional and not the CREC is deemed Voidable and is not enforceable. So you know that it will not have some hidden clause about taking your car on sundays for a couple hours, or you having to go over to his ma’s once a month for some meatballs.
And that is the agency agreement!
Here you can find all of the contracts that real estate professionals in the state of Colorado are allowed to use.