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Real Estate Transaction Agents: Definition & Duties

Instructor: Ian Lord

Ian is a real estate investor, MBA, former health professions educator, and Air Force veteran.

In this lesson we will define and discuss the role of a transaction agent. Special attention is given to the differences between transaction agents and traditional real estate agents.

Time to Move On

Joe is moving away from Colorado and needs to sell his home. He feels confident in his ability to negotiate with potential buyers and doesn't feel that he needs to hire a real estate agent to handle all the details. However, there are some particulars of selling real estate that he doesn't feel he can handle. For one, he isn't sure where to start to figure out how much his house is worth. Who should Joe contact for help?

Urgency and Agency

Joe does some research and finds out about different types of real estate professionals in Colorado.

Transaction agents assist buyers and sellers in real estate transactions without representing any party's financial interests. They act as neutral third parties in real estate deals but are still bound to act according to the law and industry ethical principles. Florida and Colorado were among the first states to authorize the work of transaction agents; however, they are not permitted to work in every state. In states in which transaction agents exist, they have generally replaced dual-agency real estate agents, or agents who work in the financial interests of both buyers and sellers in real estate transactions. (As you can imagine, working on behalf of two different parties in a real estate deal could create a conflict of interest. The transaction agent role eliminates this problem because agents work as information sources and facilitators rather than advocates.)

The majority of traditional single-agency real estate agents have a contract with one client to act with fiduciary responsibility. A fiduciary responsibility requires the agent to do what is financially best for the client. Sometimes that means doing something that isn't in the best interest of the agent. For example, just because a client can pay more for a property doesn't mean an agent should attempt to influence a higher purchase offer for the sake of a higher commission. Agents from single agency brokerages will primarily perform two kinds of services for a client - they will either list a house for sale and represent the seller or work as an exclusive representative for a buyer and help him find property to purchase.

After considering his options, Joe decides to make an appointment with a transaction brokerage near his home in Colorado.

What Does a Transaction Agent Do?

Joe meets with Peggy, a transaction broker at the firm. (In Colorado, 'transaction broker' can be used interchangeably with 'transaction agent' or 'transaction coordinator.') She outlines for Joe the type of services she can provide. She says that generally transaction agents provide the same real estate services as traditional single-agency real estate agents. They can help buyers write purchase offers. They can run comparative market analysis for sellers to figure out what property is worth. They can pass information between buyers and sellers and facilitate sales transactions. However, transaction agents cannot advocate for clients or assist in price negotiations because they are legally neutral. Additionally, their lack of fiduciary status means that if something goes wrong in a deal they may not be held legally liable.

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