Written by: Sara St. Laurent, Associate Broker with The Mountain Group - Keller Williams Realty Southwest Associates, LLC.
As a new agent in Montrose, Colorado, I have been getting numerous questions about the process. Questions like: How is it going? Is it scary to have waiting periods between paychecks? Have you sold your first house? Have you had trouble adjusting to the job and your lifestyle? How is the market?
The truth is, I would love to sit and answer all of those questions for people. I want to personally chat with everyone about how it is going. Firstly, I am not just a Realtor. Even though sales are part of the job, my job is really about building relationships and empowering my clients through their journey and making sure they feel supported and understand the services and duties available to them.
These services and duties are given to my clients throughout the process of making an agent an exclusive agent to buy or sell a home. Let’s dive deeper into what it means to choose an agent and all that entails.
What are fiduciary duties?
As an exclusive agent, we have legal obligations to follow, called fiduciary duties. Fiduciary duty in real estate requires realtors to act in the best interests of their clients. This includes disclosing any conflicts of interest and negotiating in good faith for BOTH a seller and a buyer who sign an exclusive right to buy or sell the contract. As Scott Peterson put it “when you give someone a fiduciary you give them the highest form of law to support them.”
Fiduciary duty in real estate consists of six parts:
Obedience
Loyalty
Disclosure
Confidentiality
Accounting
Reasonable Care
These are qualities of mine that I am great with. Furthermore,
When will a “client” NOT receive fiduciary duties from an agent?
An example of this would be when you walk into an open house with no agent representation. In this scenario, you are a buyer, and I am an agent representing a seller's interest, through an executed exclusive right to sell contract.
My duty to my client is "fiduciary" (legal obligation to put my client's needs above my own") and to look out for my seller's best interest in the transaction by knowing legalities for them, and myself included. This type of agency also includes negotiating offers and advising clients about whatever questions they have or are concerned with. It also solidifies me as YOUR personal and ONLY agent, so my work efforts do not get compromised down the road with other agents.
This contract, in this example, restricts me from advising you, as a buyer, to represent your best interest. My duty would be to treat you, the potential buyer, as a customer, but not as your advisor. (which is why it's so important to have an agent representing you).
I can as a selling agent have other buying documents ready for your knowledge and provide papers (like the cost of waiting, lock and list information, and temporary buydown options potentially.)
Documents a lender would want you to have when you're looking to buy, but those are not required as an exclusive agent representing the selling party. It just makes the buyer's agent's job easier for them and makes knowledge more attainable to buyers who may or may not have representation.
What is a Transaction Broker Relationship?
In the State of Colorado, we do have what is called a Transaction Broker Relationship as well. This is something as an agent we can switch into to help a sale between you (the buyer), and the seller. This is a process that does need a change of status document to be signed by and agreed upon with the seller, as they would need to acknowledge the position change and realize their fiduciary duties would be gone.
We would not be able to advise help to another party for the duration of the transaction. Both of you, the buyer and the seller would be considered customers and lose fiduciary duties from me to advocate for your part of the transaction. Which is commonly necessary for transactions.
The transaction broker type of agency is considered more neutral to the average public, more like agents “pushing papers” through the system to make a sale "effortless and easy", “but in no way can a Transaction Broker advocate, advise, or support your interests like an Exclusive Agent!” “Colorado license law only holds fiduciary duties to Exclusive Agents”. (Scott Peterson)
It is also informative to know transaction brokers may not have as much experience dealing with other kinds of real estate, as they are more known to just facilitate transactions and not have the skills developed enough to be an advocate for you, or they end up legally confusing the description of duty and instead of staying neutral they counsel both parties. Which can lead to contract confusion later in your contracts and service.
I think this topic needs to be more understood as it is important for you to understand the difference in agency relationships, and to also have a great agent by your side,
representing YOU and your specific needs!
This is why I strongly advocate for myself here and say make me your Exclusive Agent, whether buying or selling a property. I want to be your advocate and want to negotiate what's right for YOU!
I'm not just here to sell your house or make compensation. My ultimate goal as a new agent is to provide you with the happiness and dreams you've been searching for. I want to get to know you and build a relationship with you, to help us both get a better understanding of what you need, where you're going, and how to get you there according to YOUR plans. Not mine.
Next time you're looking for representation or curious about the market and what we can do for you. Remember me! I'd love to help you through the "real estate rollercoaster."
Thanks to you all for reading, I hope it helps, especially when you get asked next time, why we as agents ask to have our exclusive rights contracts signed before we put work into your transaction. Not only do we value you and your needs, we also value ourselves as agents and what we provide to you.
I take pride in my job and know that I do it well, and you should know these contracts are for your guarantee of deliverance in our productivity to you!
To contact Sara St. Laurent, call 603.491.3721 or email Sarastlaurent@kw.com.
Article Inspiration came from attending a lectured class called:
Wake Up with YPN- taught by Scott Peterson- General Counsel for CAR (Colorado Association of Realtors).
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