The Rules Have Changed – What to Know Before Viewing a Listed Property

Prior to August 17 of this year, if you wanted to see a property listed for sale, you simply called any real estate broker and most were happy to show you the property, no strings attached. The National Association of Realtors put a new rule in place which applies to any broker that belongs to the National Association of Realtors or uses a Realtor owned Multiple Listing Service (which is the vast majority). Prior to showing property to a buyer, the broker must have a written agreement in place stating the compensation they will receive if the buyer purchases the property. In other words, the compensation to the buyer’s broker must be discussed and negotiated up front prior to touring properties. In Colorado, this can be a Buyer’s Agency Agreement, which establishes an agency relationship between buyer and broker and obligates a buyer to the buyer’s broker, or a less formal document from the Colorado Division of Real Estate called a Brokerage Disclosure to Buyer that simply outlines the compensation structure without obligating the Buyer to that Broker.

Ways You Can View an Available Listing

• Visit an Open House – You can visit an open house without any written agreements in place.
• Call the Listing Agent – You can contact the listing agent and the listing agent can show you the property. It is important to know that unless the listing agent has agreed to work with you as a Transaction Broker in writing (which allows the broker to help both the buyer and the seller), the listing agent has an agency relationship with the seller.
• Sign a Simple Disclosure Outlining the Buyer Broker’s Compensation – You can sign the Brokerage Disclosure to Buyer which includes information about the buyer brokers relationship with you and the compensation the buyer’s broker will receive if you purchase the property. This agreement does not obligate you to work with the buyer’s broker. However, the seller may pay the buyer’s broker compensation, but if not, the buyer is required to pay.
• Sign a Buyer’s Agency Agreement with Your Buyer’s Broker – You can enter into a Buyer’s Agency Agreement with the buyer’s broker. This establishes an agency relationship with your broker and obligates you to that broker for a certain length of time. The buyer’s broker is now working solely on your behalf. This agreement outlines the compensation the buyer’s broker will receive if you purchase the property. The seller may pay the buyer’s broker compensation, but if not, the buyer is required to pay.

Confused Yet? If you are interested in starting the search for a new property, give us a call. We will be happy to sit down with you and explain all of the new rules.