Agents moving to Colorado from other states get tripped up here. A transaction broker in Colorado is the default working relationship, and Colorado doesn't use traditional dual agency. Knowing the difference between transaction-brokerage, single agency and designated brokerage matters every time you talk to a buyer, a seller, or both. Here are the basics. Your managing broker and the Colorado Division of Real Estate are the final word.
The short answer
Under Colorado law, a broker is considered a transaction-broker unless a single agency relationship is set up in a written agreement (C.R.S. 12-10-403). A transaction-broker helps one or both parties complete the deal but doesn't advocate for either side, and owes limited statutory duties. A single agent (buyer's agent or seller's agent) advocates for one party under a written agreement. When one brokerage works with both sides, Colorado allows designated brokerage, where different brokers in the same firm each represent one side (C.R.S. 12-10-408), or the broker can work as a transaction-broker. Colorado doesn't allow traditional dual agency.
Step by step
- Disclose early. Before you engage in brokerage activity with someone, give them the Commission's required disclosure of brokerage relationships. Your brokerage has the current form.
- Explain the options. Single agency (advocate for one side), transaction-brokerage (help without advocating), or customer (no brokerage relationship, limited help).
- Put it in writing. Listing and buyer agreements state the relationship. See buyer agreements in Colorado.
- Know your duties. Single agents owe more, including advocacy and promoting the client's interests. Transaction-brokers owe statutory duties like honesty, reasonable skill and care, and disclosure of known adverse material facts. Read the statute and the form.
- Handle in-house deals carefully. If your buyer wants your own listing, talk to your managing broker. Options may include changing to transaction-brokerage with written consent, or designated brokerage with another broker. Follow your firm's policy.
- Protect confidential information. Whatever the relationship, don't share a client's confidential information, like their top price or motivation, without permission.
- Use neutral roles where it fits. Some situations, like a divorcing couple selling together, often fit transaction-brokerage. See divorce home sale basics.
Relationships at a glance
| Relationship | Advocates for | Written agreement |
|---|---|---|
| Seller's agent | Seller | Yes |
| Buyer's agent | Buyer | Yes |
| Transaction-broker | Neither (helps one or both) | Default unless agency is agreed in writing |
| Designated brokerage | Each designated broker represents one side | Disclosed in the written agreement |
| Traditional dual agency | Not allowed in Colorado | N/A |
How to explain it to your client
"In Colorado, there are a couple of ways I can work with you. As your agent, I advocate for you and your interests. As a transaction-broker, I help get the deal done fairly and honestly, but I don't take sides. This form explains both. If you ever want to buy one of my own listings, we'll talk about how that works before anything happens, and you'll sign off on it in writing."
Watch-outs
- Disclosure timing matters. Give the relationship disclosure before brokerage activity.
- Don't say "dual agent." That's not how Colorado works.
- In-house deals need care. Get your managing broker involved early.
- Confidential info stays confidential.
- Not legal advice. Read the statute and current Commission rules, and check with your managing broker.
Further reading
This is training for real estate agents. It isn't legal advice. Check with your managing broker.
Questions
Is transaction-brokerage the default in Colorado?
Yes. Under C.R.S. 12-10-403, a broker is a transaction-broker unless single agency is set up in writing.
Does Colorado allow dual agency?
Traditional dual agency isn't used in Colorado. Designated brokerage and transaction-brokerage are the options when one firm works both sides.
What is designated brokerage?
When the employing broker designates different brokers in the same firm to represent each side. See C.R.S. 12-10-408.
What duties does a transaction-broker owe?
Limited statutory duties, such as honesty, reasonable skill and care, and disclosure of known adverse material facts.
Where can I read the rules?
At the Colorado Division of Real Estate, dre.colorado.gov, and in C.R.S. Title 12, Article 10.
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.
- Agent training by Brian Lee Burke, The Kenna Group at Keller Williams DTC
- Colorado Division of Real Estate (https://dre.colorado.gov)
- Brokerage disclosure on kennarealestate.com
- Colorado Division of Real Estate