How do I explain and sign a buyer agreement in Colorado?

A buyer agreement is the written deal between a buyer and a brokerage: what the broker will do, for how long, in what area, and how the broker gets paid. Since NAR's 2024 practice changes, agents who are MLS participants need one before touring a home with a buyer. Colorado also has Commission-approved forms and brokerage relationship rules. Here's how I explain it so buyers sign happily instead of nervously.

The short answer

In Colorado, buyer agreements are written on Commission-approved forms, with exclusive and nonexclusive versions. The agreement names the brokerage (not just a team), sets the brokerage relationship (often transaction-brokerage or buyer agency), the term, the property type and area, and the compensation in a clear amount or rate. Sign it at the buyer consult, before the first tour. Explain it in plain words, and let the buyer ask questions or take time to read it.

Step by step

1. Do the consult first. Learn the buyer's goals, timeline and money. See buyer consultation.
2. Give the brokerage relationship disclosure. Colorado requires brokers to disclose the working relationship options in writing. See transaction broker vs agency.
3. Choose the form. Exclusive (the buyer works with your brokerage only, in the agreed area and time) or nonexclusive. Your brokerage may have a preference. Use current Commission-approved forms.
4. Fill in the key terms together.
   • Brokerage name (the firm, not just your team)
   • Relationship type
   • Start and end dates
   • Property type and area
   • Compensation amount or rate, and how it may be paid
5. Explain how pay works. The seller may pay some or all through an offer of compensation or a concession. Any shortfall is the buyer's, up to the agreed amount. See commission after the NAR settlement.
6. Talk about ending it. Explain how the agreement can end and what happens with homes shown during the term.
7. Sign before touring. In person or e-sign. Give the buyer a copy.
8. Register with builders. For new construction, register the buyer on the first visit. See builder contracts.

Key terms at a glance

How to explain it to your client

Watch-outs

• No open-ended compensation. State a clear amount or rate.
• Use current forms. Forms changed after the settlement. Use your brokerage's current versions.
• Name the brokerage. Team names are marketing names. The firm is the party.
• Don't pressure. A rushed signature leads to an unhappy client.
• Not legal advice. Buyers with legal questions should talk to an attorney.

Further reading

• Brokerage disclosure on kennarealestate.com
• Why buyers bring their own agent to the builder on kennarealestate.com

This is training for real estate agents. It isn't legal advice. Check with your managing broker.

Frog tip: The deals go to the agent who's still there on conversation six. Most agents quit after one voicemail. That's your opening. Learn more →

Questions

Do buyers have to sign an agreement to see a house?

Under NAR's practice changes, agents who are MLS participants need a written agreement before touring with a buyer. Check your MLS and brokerage rules.

Is the agreement exclusive?

It can be exclusive or nonexclusive, depending on the form chosen.

Can a buyer end the agreement?

The agreement explains how it can end. Read the termination section together.

Is the fee negotiable?

Yes.

Where do the forms come from?

The Colorado Real Estate Commission approves standard forms. See dre.colorado.gov.

Brian Lee Burke is the founder of PadLeaders, a Colorado real estate broker licensed since 2003, team leader of The Kenna Group at Keller Williams DTC (formerly Kenna Real Estate Group) and the author of Mastering Real Estate and The Real Estate Playbook. More about Brian.