Most people have some concept of agency, although a lay person may not understand completely the legal definition and ramifications of agency. To confuse the issue, many people refer to a licensed real estate professional as a real estate agent, without considering or appreciating the legal significance of the term "agent."
In Colorado, not all real estate brokers or sales associates are agents. There are 2 relationships a real estate broker can have when working with a buyer or seller, that of agent or transaction broker. Transaction brokerage is unique to Colorado and a handful of other states. Actually, I know of only one other state, Florida, that has transaction brokerage. There may be others, so please inform us if some of you are in states that recognize this legal status. Also, just to clarify, in Colorado, "broker" is used for all real estate professionals licensed to engage in real estate brokerage activities and services, whether they be owners, managers, employing brokers, supervising brokers or associates (called "broker associates' or "associate brokers"). Still, the public or consumer generically and broadly refer to all real estate brokers as "agents," which adds to the confusion.
So, what the heck is a transaction broker? Well, let's start with agent, whose duties are derived from Common Law. An agent "represents" only one party, either a buyer or seller, by advocating, directing, negotiating on the client's behalf and advising the client as to the benefits and risks of a proposed transaction. The agent represents the interests of the client above the interests of the other party. If an agency relationship exists, then the buyer or seller is the real estate brokers "client."
A transaction broker, on the other hand, "assists" a buyer or seller. Taking the definition directly from the Colorado Real Estate Manual, a transaction broker "means a broker who assists one or more parties throughout a contemplated real estate transaction with communication, interposition, advisement, negotiation, contract terms and the closing of such real estate transaction without being an agent or advocate for the interests of any party to such transaction. In other words, a transaction broker assists a party or both parties to the transaction without representing either of them or being their agent. A buyer or seller that has a transaction brokerage relatinship with a broker is also a client. There, that's clear as mud, isn't it?
I think the best analogy I've heard to help distinguish between an agent and a transaction broker ("TB") is that an agent is more like a coach whereas a transaction broker is more like a referee. A coach can tell his or her client what to do or what they should do. A TB is a neutral, observer, and just interprets the rules and calls the shots without any obligation on the part of either side. In the situation of a real estate transaction, a TB will give out information, explain procedure, supervise and facilitate the transaction, while assisting one of the parties or both, without taking sides.
If a real estate broker is an agent for a party, then the broker has no relationship and, hence, no obligation toward the other party, who is considered to be and referred to as a "customer." So, if a real estate agent or broker calls you a customer, then you know that the broker has no professional or working relationship whatsoever with you, and hence no duties or obligations, and that the broker will be acting on behalf and protecting the interests of his or her buyer or seller only.
In Colorado, the default relationship is that of TB. The only way a real estate broker can become an agent for a buyer or seller is under a written contract. So, unless you, the consumer (buyer or seller), is willing to enter into a written contract (usually the listing agreement or buyer agency agreement), or you've been advised that you are just a customer and the broker is the agent for the other party, then the relationship you will have with that broker is one of transaction brokerage.
Because the consumer may be confused or assume agency when working with a broker, Colorado law requires that the broker reveal to the buyer or seller at the outset what relationship that broker has with the buyer or seller. This is done in writing, as either set forth in the proposed written contract (e.g., listing agreement) or by way of a mandatory disclosure form promulgated by the Colorado Real Estate Commission (CREC). Click here to view the broker disclosure to buyer/tenant form. There is a separate, similar disclsore form for sellers selling their home by owner (FBOSs) or bank or REO sellers who do not use the CREC listing agreement. The broker will ask the buyer or seller to sign the disclosure just to confirm its receipt. It is not a contract and does not obligate the party to the broker in any way, which fact is spelled out in the form. so, if you are asked to sign such a disclosure form, don't be afraid of it. We need to have proof in our files that we made this disclosure to our prospective buyers, tenants, sellers and landlords.
A few other things to keep in mind about transaction brokerage in Colorado are as follows:
A broker who, under a written agreement, is an agent, may change his or her status to that of a transaction broker if the broker has or enters into a transaction brokerage relationship with the other party. The ability to change status will be specified in the written listing or agency contract. This usually happens when an agent has a buyer that becomes interested in a property the agent has listed, or an agent representing a buyer later gets a listing that the existing buyer client wants to buy. If that happens, then the broker is required to give both parties a written notice of the change in status.
A broker within a multi-person company who is designated to assist or represent the buyer or seller is the only one that has the defined relationship with the client. It does not extend to the other brokers in the office of company.
So, now the question is, who decides what relationship a broker and buyer or seller may have? Well, it's negotiable between the consumer (buyer or seller) and the broker. However, some brokerage companies have a policy establishing the relationship they will have with a buyer or seller. Most of the time, it's transaction brokerage. That's because most real estate companies work with both buyers and sellers and, also, because they believe there is less liability involved as a TB than as an agent. That may be true, unless a TB acts like an agent. If a company has a policy, it doesn't mean they can't make exceptions, but if they don't, then the buyer or seller will not have the option for agency with that company or one of its broker associates, even with a written contract.
This is unquestionably a confusing concept, especially for those that do not regularly buy and sell in Colorado, whether you are a consumer or real estate broker. I hope, however, that this post helps explain and clarify what is transaction brokerage and how it differs from agency in Colorado. Your Colorado real estate broker will, of course, be happy to explain further and answer any questions.
I have viewed hundreds of homes now in the Montrose area of Colorado, between the weekly broker tours, showing various homes to buyers, visiting the homes of potential sellers, and, of course, the homes of neighbors and friends. One issue that regulalry arises is the homeowner who has overbuilt or over-remodeled, which makes us think (or say out loud to each other), "What were they thinking?!"
Many of these situations happen because the homeowners had no thought of selling anytime soon, if ever. The house they built or the remodeling they did was for their own use and enjoyment, consistent with their personal tastes and preferences. Unfortunately, things can suddenly change for a homeowner, such as divorce, death, job transfer, job loss, and in recent years, a terrible downturn in the economy and real estate market which has resulted in the wiping out of much if not all of the equity gained over several years of ownership.
Whether you intend to live in your home indefinitely or are looking to spruce it up to sell, it is very important to keep in mind the resale value of your home when you buy or build it and the cost-to-value of any remodeling project, because, well, you just never know. I realize that certain trends change over the years and that it may be difficult to predict what will be fashionable in 10-20 years or more. But some things or features will always be important or desireable, e.g., location, orientation, energy effeciency, square footage, room size, number of bedrooms, existence of garage or storage. I would say that as a general rule, the more "mainstream" for the time you can be (or become at time of sale), the easier it will be for you to sell and the higher price you can expect to get. Don't make the mistakes of these real cases I've seen:
The 3,000 square-foot, 5 bedroom, 4 bath custom-built home that cannot be sold for even the cost to build because it was overbuilt for the neighborhood, which is mostly made up of 3 bedroom, 2 bath, 1500 square-foot homes.
A huge home with small bedrooms, including a skimpy master suite, not to scale with the overall square footage of the home.
A gorgeous, new custom home built next to a transfer station, a landfill, or a scruffy, 5-acre parcel with an old singlewide on it.
The beautiful, rambling custom ranch home with expansive views to the southern mountains, but which also overlooks the feedlot down below.
A horse property, complete with barn, pasture, arenas, fencing, irrigation water, in a very desirable location with a darling, 2200 square-foot custom home with upscale, artistic finishes, impressive great room, spacious, state-of-the-art kitchen, inside art studio, and five-piece master suite, but which suite was the only bedroom (this property eventually sold, but finding a lender to loan on a one-bedroom home was very problematical).
A unique, well-built, energy-efficient home appropriate for the neighborhood or area, but with a supersized workshop or accessory building that cost almost as much as the house to build and is the focal point, for which the average buyer is unwilling to pay the premium.
A multi-level modern, custom home with trendy finishes and bright, wild paint, with colored cement flooring and stainless steel staircase and railings, nautical port-hole windows, and other such "unique" touches, nestled among the beautiful Ponderosa trees on a mountaintop where one would expect to see a log home (and where other log and timber homes are seen).
The older, Craftsman home in town that has been freshly painted inside and out, with remodeled kitchen and bathrooms with high-end cabinetry, hardware, plumbing fixtures, tiling, granite countertops, but the foundation still slants and ondulates wildly.
A remodel that turns the 2-car garage into a family room that still looks like the former garage and now leaves the property with no garage or room to build another one.
A half million-dollar, brand new, beautiful spec home in an established neighborhood or subdivision, with absolutely no landscaping, fencing, on a bare adobe dirt lot.
An elegant, 3-story, 4,000 square-foot home, with high-end interior finishes and amenities, including gourmet kitchen, butler station, central vac, sound system, game room, library, and much more, but with white vinyl siding on the exterior.
An older home in a very desireable, rural subdivision, all on 2-acre+ lots, which, unlike other homes in the area, has not been updated since it was built 30 years ago, with original blue, formica kitchen countertops, blue shag carpet, old-fashioned wall paper, dark walnut cabinets, doors, and trim, old harvest gold appliances and electric stove-top, popcorn ceilings, . . . and no one is buying the "retro" pitch.
A darling, remodeled, upgraded Victorian home in town, but with overgrown trees and shrubs swallowing up the house, cracked, crumbling, and slanted cement or stone walkways, old, dilapidated backyard fence, and front picket fence in serious need of repainting, with a detached one-car garage, the former "coach house" of an eyesore.
The list, of course, could go on and on. In all these cases, the homes sat on the market for quite some time before they eventually sold for considerably less than their original asking price or well below market. Some are still for sale, some never did sale, and others went into foreclsoure.
In sum, homeowners and sellers, do give some serious thought to the cost-to-value and resale value of any purchase, construction or remodeling. It is especially imperative in this real estate market that is very competitive and when home values are flat to falling. The days of the easy fix and flip are gone. As far as what can and should be done to get the best value for your investment, here are some good, recent articles I found on the internet:
And when the market improves, home values once again soar, fixing and flipping is feasible, and demand outstrips supply, these cost-to-value and resale considerations should still be made.
While the Montrose area real estate market continued to present its challenges in 2009, in my office, we saw a slight improvement over 2008, enjoying even greater activity the last half of the year. In November, while nationwide home sales were up 7.4%, in Montrose, per the MLS, they were up 53%!
So, as of January 1, 2010, here are the MLS stats for home sales in 2009 and the current market of active home listings in Montrose:
2009 Statistics--Homes Sold
Num Sold Num Listed Avg List Price Avg Sale Price % Sold
412 1,097 $219,632 $208,395 37.56
Sale Price/Listing Avg Days on Avg List Price % Expired Price Ratio Market Unsold
94.88% 166 $352,434 45.85
Current Market--Homes for Sale
Total Active Listings Avg List Price Avg Days on Mkt
644 $335,574 239
What can you glean from this for the Montrose, CO market?
In 2009, you had about a 38% chance of selling your home, and that will probably remain the same in 2010.
In 2009, nearly 46% of the home listings were market rejected (i.e., expired), with an average unsold price of about $350,000.
Homes that sold and will probably continue to sell into 2010 are those with a price point in the low $200,000’s.
If you price your home competitively to sell, it should sell within 4 months, unless you are in the higher price points, and if you’re closer to the average current list price or unsold list price in 2009, it may take you over 6 months or longer to sell, if you sell at all.
If you are a seller, it is absolutely imperative you price your home competitively.This is no time to “test the market.”It’s been tested, and those that don’t price to sell, lose (i.e., don’t sell).I’m also telling my prospective sellers, if they don’t have to sell, don’t, but be prepared to wait at least 2-3 years, or more, before seeing the market improve enough to get what they need or want out of their homes.
If you have to sell, or want to because you want to buy something else, then I’m advising you list it for sale now and price it competitively.If you wait till spring or summer, then you will lose out on the homebuyer tax credits and the interest rates that are predicted to remain low while the tax credit remains in effect, but will increase after the tax credits expire.In fact, we’re already seeing interest rates creeping up.
Additionally, it is predicted that foreclosures in our area will double, if not triple or quadruple (as anticipated nationally).Homes that sell after being foreclosed upon at decreased, bargain prices will serve as comps, thereby diminishing the value of your home.
For these same reasons, we definitely are encouraging buyers to buy NOW!You will not see in a very long time, if ever, a better opportunity for home purchases than in this first quarter of 2010 .Although we do expect more foreclosures in 2010, the benefit of decreased values may be wiped out by increased interest rates if you wait till later in the year to buy.So, get realistic and seize the opportunities!
There may be a pot of gold at the end of the rainbow after all. After months of hearing nothing but bad to worse news concerning the real estate industry and the economy in general, we're finally receiving positive news that things are improving, with new home sales up across the nation. Click here to read such a report from REALTrends.
Certainly, here in the Montrose area, we're seeing a lot more activity, especially for homes in the $200,000 and under range. We're also seeing a greater number of short sales and foreclosures, which is spurring interest from investors and bargain hunters, although patience is definitely a virutue and a requirement to close any of these sales.
For the seller, the good news is that if the property is priced right (i.e.,"competitively"), we have actually experienced a few bidding wars or multiple offers. In general, a well-priced home in good condition with good curb appeal, that offers a quick close to the buyer who cannot wait, is selling.
Of course, the best bargain that Montrose has to offer is the subperb quality of life. It makes selling real estate in Montrose fun and gratifying, if not just yet easy. Cheers from Montrose, and enjoy the rest of your summer!
I consider myself to be socially liberal and fiscally conservative. I realize any universal health plan will come with a price tag, but I firmly believe we already pay a huge price under the current plan, which is no plan. Most of us in the real estate industry are self-employed and are either without insurance, under-insured or pay dearly to be adequately insured, only to discover sometimes that we are not as protected as we believed. If you want to know why we cannot rely on private, for-profit insurance companies to fulfill our health care needs, read Ken Gordon's blog post, Nothing Good Just Happens.
Anyway, most of what I've recently heard in opposition to the proposed health care reform sounds more like hysterical hyperbole, political rhetoric, and fear mongering, not to mention just mean-spirited name calling. I haven't been able to respond or debate the issue because of my lack of real knowledge about the proposed bill (House of Representatives Bill H.R. 3200) or alternatives. So, I am now on a mission to study the various health care reform proposals so that I can engage in intelligent, reasoned discussion and debate on this extremely important issue and decide what I can and cannot support. What I want, and what we all need, are the real facts and a rational, non-partisan analysis of any proposed health care plan.
One great source I have discovered is PolitiFact.org, a project of the St. Petersburg Times, whose stated mission is to help us find the truth in American politics. They fact-check statements by members of Congress, the White House, lobbyists and interest groups and rate them on their Truth-O-Meter. I checked the Truth-O-Meter on the subject of health care. This confirmed for me that the assertions I've heard made by the opponents of health care reform are mostly false or misleading. Some were found to be so outrageously false, they were given the "Pants on Fire" rating. I found a good analysis and rebuttal of the anti-health reform arguments at Health Care for America Now web site. Click here to read it. Of course, the best source is the source itself, i.e., H.R. 3200, which, unlike some of our political leaders, we should all read. I admit, 1017 pages is rather daunting, but I've at least saved it for now for ready reference whenever I receive something from here on out that references a section or page number in the Bill to support an argument or assertion.
Since I am a member of the National Association of REALTORS (NAR), I decided to check its site (www.realtor.org) to see what NAR was doing and saying about health care reform. NAR has not yet taken a definitive position for or against the Bill, although it is seeking to ensure any reform addresses the needs of small businesses and the self-employed. It is also urging lawmakers to pass the Small Business Health Options Plan Act and the CHOICE Act, and it opposes any effort to alter the mortgage interest deduction to help pay for health care reform. NAR encourages all REALTORS to become active and to be heard. To learn more, read VP Gary Thomas' blog post, Health Care Hot on the Hill and then check out and check regularly NAR's newly created Health Care Reform landing page.
Like NAR, I want to make sure that I have thoroughly researched and analyzed any proposed new legislation concerning national health care reform and then make myself be heard by my Congressional leaders. I welcome your comments, opinions, analysis, debate and suggestions for additional resources for further research and education on this issue. But please, can we avoid the partisan divisiveness?
I'm just having fun, now, but if you've heard, we've had a rash of summer thunder storms across Colorado. Yesterday, at home in Ridgway, one of the biggest downpours, with all the trimmings hit me at home. Here's a short video I took out my back yard (my first video upload)!
The 2nd annual Pickin' in the Park in Ridgway, CO is underway. This is my first year attending, and what a fun event! This is a free 4-concert series that combines musical acts from around the country with local and regional opening acts. The music, of course, is the main event, and the 2 concerts I've been to so far have been fabulous. Last Thursday, I especially enjoyed Carrie Rodriguez, a singer, songwriter, and fiddler from Austin, TX. She's really more of a rocker who also plays guitar and electric mandolin with a fantastic backup band. I was quite impressed that Ridgway could attract such a renowned artist. And Carrie said that she was quite impressed with the "prettiest view from a stage" she'd ever seen.
The week before, I enjoyed the very unusual but very entertaining music of California based Fishtank Ensemble. As described by Pickin' Productions, this quartet's music is rooted in gypsy jazz, featuring familiar and unfamiliar instruments played by colorful, energetic virtuosos. I couldn't describe it better!
As great as the music is, equally, if not more entertaining, is just watching all the local folk (with a few tourists thrown in) and running into friends and neighbors. Kids run around having fun with the costumes and hula hoops provided for their entertainment. Every fathomable type of dog can be seen strolling or hanging out with its owner(s). Food and beer vendors add to the entertainment. Plenty of room in front of the stage allows for dancing. And, of course, the venue in Ridgway's Town Park cannot be beat.
Next up is a popular, local Bluegrass Band from Panoia, Sweet Sunny South with local picker, David Sneed opening the show. If you're in the area, do come out and enjoy the music and fun. It starts at 6:00 p.m. and goes till dark. This will be the last of the 4 concerts in Ridgway, but 4 more concerts will be held in the Paonia Town Park starting in August. Be sure to check out the Pickin' Productions' website for the line-up in Paonia.
A special thanks to our Ridgway Town leaders for bringing this free event to Ridgway with the help of Pickin' Productions and our local public radio stations KVNF, along with several other sponsors! It's great to be a Ridgway resident.
I love blogging. And I love reading other blogs, and commenting, and teaching about blogging and social networking. I feel the power, the potential, and truly do enjoy the connection and the shared knowledge. But I don't blog or read or comment enough, at least, not as much as I should or people tell me I should. I compose blog posts in my mind and make mental notes of good subjects to write about. And then ... poof! It's all gone as I get derailed with distractions, and my topics are no longer timely or novel or something I'm motivated to write about. I'm thankful for those of you who can do it--post often and timely. And I hope no one will think less of me if I lurk, don't post comments, or write except every 3-4 weeks.
So, briefly, all's well on the Western Slope of Colorado. Real Estate is picking up. We're actually closing deals, although it takes a lot longer with greater effort, frustration, and not so much help from the lending industry. For buyers, despite the challenges with financing, it truly, definitely, most assuredly is the best time to buy. For sellers, not so bad here if you plan to buy something in replacement. If you don't have to sell now but are thinking about it, it's a crap shoot. You may be better off waiting. But if you do, and the market picks up, then so will interest rates and others getting into the game (i.e., more sellers and inventory). And I'm talking about the Montrose area, which may be quite different than nationally. What will not change is that we in the Montrose, Colorado area have a most incredible place to live and work and play. And I do love living, working, and playing here.
The 2009 15th Annual Partners Challenge Ride (and Weekend Get-Away) has been set this year for the weekend of September 26-27. This 2-day, 104-mile mountain bike ride is truly challenging, but a lot of fun, traversing some of the most spectacular mountain terrain and scenery in the country. It is not a race. Riders are supported all along the way by volunteers who work at the aid/food stations, patrol the route with sag wagons, and provide bike mechanic services. Click here for more information about the event and course description from last year. Below is a map of the course.
Partners of Delta, Montrose and Ouray is a 501(c)(3) non-profit organization that mentors children in our area. Youth aged 6-17 are referred to the program and then screened and matched with a trained adult volunteer. The pair make a commitment to spend at least three hours a week together for one year. The staff of Partners supports this relationship with weekly contact, monthly recreational activities and educational workshops. Another component of the program focuses on teenagers through Art Partners. Youth aged 12-17 are matched with a professional artist or crafter in a supported 3-month mentoring apprenticeship. Partners has been in existence in our area since 1987, providing a huge value to our youth. Partners does not charge for its services, but rather, relies on volunteers and donations. For a good newspaper article on Partners, click here.
I am proud that my company this year will be entering a corporate team, which will be made up of 5 riders, including myself. In addition, the non-riders will be volunteering to work the ride and/or help us to raise funds for Partners. Our goal as a team is to raise at least $1,500. If you would like to help us meet our goal, we would truly appreciate your tax deductible donation in any amount. Please make your check payable to Partners and mail or deliver it to my office at 1245 E. Main St., Montrose, CO 81401, Attn: Partners.
Alternatively, if you'd like to take the challenge, register as an individual or corporate team to participate in the ride. The fee for individuals is $300, and for a team, $1,300, limited to 5 riders. You should be able to download the registration form soon from the Partners' website at www.Partners-West.org. As of this post, it is not yet online, but should also be available soon through www.active.com. Until then, feel free to call me, and I'll be happy to mail you a registration form. The ride is limited to the first 100 riders, but there's no limit on donations! I'll keep you posted as I find more online about this event, and also, about my training. I rode one day in the event 2 years ago, which convinced me I needed a new bike and a lot more training! I've got the new bike, and have started the training.
~Ninah
My agents, Kylee Smith & Betsy Spitzer on Partners' Ride 2007 coming down Owl Creek Pass, Chimney Rock in background
I was pleasantly surprised to see an upsurge in real estate activity, beginning in April. I thought it might be just a fluke, but I'm happy to report, since then, we've been experiencing a steady flow and increase in activity, by which I mean more buyers are looking, more buyers are buying, and more sellers are listing. I will admit, some of those listings have also been a result of an increase in foreclosures. Of course, lending continues to be a big challenge, making it harder and longer to close deals, sometimes causing a transaction to fall out completely (as I experienced just last week). Ah, sigh! We will get through this! So, buyers, don't get discouraged, and sellers, please be patient. Basically, the financial institutions are dictating the closing date. In general, I'm encouraged by what appears to be a combo of continued low interest rates, buyer incentives (i.e., the first time home buyer $8,000 tax credit), a boost in consumer confidence, and just the usual high, summer selling season.
So, to give you a feel for our market, here are the following MLS residential sold statistics for May and 2009 year-to-date (as I obtained from our regional CREN MLS):
No. of ListingsAvg. PriceMedian PriceAvg. Days on Market
YEAR-TO-DATE
MONTROSE COUNTY
146 $210,516 $190,050 148
DELTA COUNTY
90 $175,334 $165,000 226
OURAY COUNTY
7 $421,571 $272,000 238
MAY 2009
MONTROSE COUNTY
39 $205,463 $202,000 152
DELTA COUNTY
27 $174,070 $160,000 209
OURAY COUNTY
2 $277,000 $277,000 319
Overall, we're down anywhere between 40-50% in sales volume over last year, but then we were down about the same last year relative to 2007. However, values have remained fairly level, down in some sectors, and up in others. County Assesors are scambling to explain why assessed values are up while recent real estate markets are down (see my earlier post on valuations). In general, we're blessed on the Colorado Western Slope not to have experienced the huge pendulum swing downward as in other areas of the country. What hasn't changed are our fantastic quality of life and beautiful climate and scenery. Now is a great time for anyone to buy here, whether a first time homebuyer, retiree, second/vacation home buyer, or investor.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
There may be a pot of gold at the end of the rainbow after all. After months of hearing nothing but bad to worse news concerning the real estate industry and the economy in general, we're finally receiving positive news that things are improving, with new home sales up across the nation. 
by Pickin' Productions, this quartet's music is rooted in gypsy jazz, featuring familiar and unfamiliar instruments played by colorful, energetic virtuosos. I couldn't describe it better!
;)
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