Working with a REALTOR®

Not all agents or brokers are REALTORSŪ.

As a prerequisite to selling real estate, a person must be licensed by the state in which they work, either as an agent/salesperson or as a broker. Before a license is issued, minimum standards for education, examinations and experience, which are determined on a state by state basis, must be met. After receiving a real estate license, most agents go on to join their local board or association of REALTORSŪ and the NATIONAL ASSOCIATION OF REALTORSŪ, the world's largest professional trade association. They can then call themselves REALTORSŪ.

The term "REALTORŪ" is a registered collective membership mark that identifies a real estate professional who is a member of the NATIONAL ASSOCIATION OF REALTORSŪ and subscribes to its strict Code of Ethics (which in many cases goes beyond state law). In most areas, it is the REALTORŪ who shares information on the homes they are marketing, through a Multiple Listing Service (MLS). Working with a REALTORŪ who belongs to an MLS will give you access to the greatest number of homes.

Using an agent and the obligations that are owed to you

An agent is bound by certain legal obligations. Traditionally, these common-law obligations are to:

  • Put the client's interests above anyone else's;
  • Keep the client's information confidential;
  • Obey the client's lawful instructions;
  • Report to the client anything that would be useful; and
  • Account to the client for any money involved.

Establish brokerage relationship:

When you have decided what type of broker relationship and services meets your needs, and after having interviewed enough brokers to feel comfortable with your decision, it's time to finalize your decision with the broker you have chosen to work with.

Your broker may ask you to sign an exclusive right to buy agreement to formalize the brokerage relationship. All Colorado approved forms advise parties to seek legal counsel if you are not sure about the meaning of consequences of the agreement. If you choose not to sign the agreement, the relationship between you and your broker will be "transaction-brokerage" by default according to Colorado License Law.

Different types of Agency

In Colorado, your broker must advise you that you have a choice of relationships. If you don't make a choice, it will be decided for you by law. Read about different brokerage relationships here.

How to evaluate an agent

In making your decision to work with an agent, there are certain questions you should ask when evaluating a potential agent. The first question you should ask is whether the agent is a REALTORŪ . You should then ask:

  • Does the agent have an active real estate license in good standing? To find this information, you can check with your state's governing agency.
  • Does the agent belong to the Multiple Listing Service (MLS) and/or a reliable online home buyer's search service? Multiple Listing Services are cooperative information networks of REALTORSŪ that provide descriptions of most of the houses for sale in a particular region.
  • Is real estate their full-time career?
  • What real estate designations does the agent hold?
  • Which party is he or she representing--you or the seller? This discussion is supposed to occur early on, at "first serious contact" with you. The agent should discuss your state's particular definitions of agency, so you'll know where you stand.
  • In exchange for your commitment, how will the agent help you accomplish your goals? Show you homes that meet your requirements and provide you with a list of the properties he or she is showing you?