In Summit County, low supply and high cost can make housing a difficult decision for some first-time buyers. 

That’s where real estate brokers come in. In essence, these industry experts help facilitate the buying and selling process, often representing both sides of a transaction. But there are key differences to know and factors to consider when working with a broker. 

Realtor versus real estate agent 

Many use the term Realtor as a catch-all to describe anyone who helps sell and buy a home, but it actually has a very specific meaning. 

Realtors are members of the National Association of Realtors, a 1.5-million-member trade group. The organization provides additional credentials on top of the state-mandated license that every broker must have to work in the industry. 

“It essentially provides an additional layer of continuing education and guidelines to function,” said Dishon Lutz, an associate broker for Real Estate of the Summit and president for the Summit Association of Realtors. 

Brokers who are not members of the organization are more commonly referred to as real estate agents and typically only carry a state license. 

Lutz said working with a Realtor can have its advantages, including providing homebuyers with deeper market insights and the knowledge that those brokers are held to a stringent set of ethics and guidelines. 

How brokers are paid

Hopeful buyers who are new to the housing market may assume they need to pay for a broker. But oftentimes, the service comes with no out-of-pocket costs. 

“In your mind you think, ‘I’m getting additional service, I’m going to have to pay for that,'” Lutz said. But that can be a common misconception, he added. 

Brokers work for commissions and those are typically agreed upon between a seller and broker before a house even goes on the market. That means sellers, not buyers, are usually the one’s paying the broker. 

In rare instances, sellers won’t agree to pay the full commission on a home and will ask a buyer to foot the rest of the bill. That provision will always be listed in the home’s advertisement, Lutz said, and buyers will be made aware that they’re on the hook for a broker’s commission before entering an agreement. 

Transaction broker versus agent 

Another factor for buyers to consider is whether they’re working with a transaction broker or an agent. 

Dana Cottrell, a Summit County broker who will serve as the next president of the Colorado Association of Realtors in 2024, said she likes to think about the two roles in the context of a sports game. 

“A transaction broker is like a referee, they know all the rules and are going to keep the game going forward,” Cottrell said. “An agent is like a coach.”

Breaking that analogy down further, Cottrell explained that a transaction broker’s role is to simply facilitate a transaction without favoring the interests of either the buyer or the seller. 

An agent is more personable with a buyer, advocating for their needs and providing opinions. That’s not to say transaction brokers don’t give input, Cottrell said, but that input is typically data-driven and market-based, rather than subjective opinions. 

The role of a broker, rather that be as transaction broker or agent, is usually decided with a seller before the home is listed, according to Lutz. 

But those roles can also be open to negotiation, Lutz said, and there are times when a buyer can seek a specific role from the broker. 

Making sure it’s a good match 

While knowing these differences can help prospective homebuyers take their first steps into the housing market, there’s a simple question they can ask themselves when interacting with a broker: Does it feel right?

“Do you feel confident in asking questions, big or small, and getting the appropriate answer?” said Lutz. “I think the biggest thing is don’t be scared to reach out to real estate officials and ask questions. It’s not like an agent is going to send you an invoice for asking a few questions.”

Buyers should feel confident expressing what they want with a broker and not feeling pressured into making a decision they’re unsure of. 

As home transactions slow and inventory increases, albeit slowly, Cottrell said she’s confident the market is continuing to rebalance itself and providing buyers more time to weigh their decisions. 

“Real estate’s a very personal investment, a very personal purchase,” Cottrell said. “Ultimately, the advice to the buyer is this is totally your decision.”