The Exclusive Right-to-Buy contract and other buyer/tenant agreements

Bottom line: a buyer agreement is the buyer's version of a listing. It says what the buyer's brokerage will do, how long it lasts, and who pays. Since 2024 buyers across the country are routinely asked to sign one before touring homes, but that is a national practice, not a Colorado statute I found in the sources.

What the Exclusive Right-to-Buy contract is

The Commission rules name an Exclusive Right to Buy contract as a type of listing contract (4 CCR 725-1 Rule 1.33). An Exclusive Tenant contract is the same idea for renters. The buyer hires one brokerage, and that brokerage is paid if the buyer buys during the period, whichever broker or website found the home, unless the contract carves out exceptions.

The buyer's broker can serve as a single agent (buyer's agent; loyalty, advocacy, confidentiality; C.R.S. 12-10-405) or as a transaction-broker (neutral; C.R.S. 12-10-407). A single-agent relationship exists only once a written agreement is made; otherwise the broker is a transaction-broker (C.R.S. 12-10-403(2)). The relationship lasts until the work is done. If the deal is not completed, it ends at the earliest of: an agreed expiration date, termination by the parties, or one year after the engagement (C.R.S. 12-10-409(1)).

Why the written agreement is now standard

A national settlement by the National Association of Realtors (NAR) in 2024 changed MLS rules so that offers of buyer-broker pay can no longer be posted on the MLS, and most buyers' brokers must have a written agreement with a buyer before touring a home. That is a national industry rule and court settlement, not a Colorado statute. In Colorado, the Commission rule I found requires writing for seller and landlord listings (Rule 6.14.C). Colorado law does require writing for one buyer relationship: a single agent working for a buyer acts under a written agreement (C.R.S. 12-10-405(1)(a)). A transaction-broker may work under a written or oral agreement (C.R.S. 12-10-407(2)(a)). The pre-tour signing habit is an industry rule, so say "industry rule" when you teach it. The 2023 rules on broker engagement contracts are SB23-077 (2023), Colorado General Assembly, now in C.R.S. 12-10-403.5.

Who pays the buyer's broker

Colorado law lets a broker be paid by the seller, the buyer, the landlord, the tenant, a third party, or by sharing between brokers (C.R.S. 12-10-410(1)). Key points:

• Payment does not make the payer the broker's client (C.R.S. 12-10-410(2)). A seller who pays the buyer's broker does not get a buyer's broker working for the seller.
• A buyer's agent must get the buyer's written approval before proposing to the seller's side that the buyer's broker be paid by sharing the seller's compensation (C.R.S. 12-10-410(5)).
• Before a brokerage or listing agreement or a sales contract, the identity of anyone paying a broker must be disclosed to the parties (C.R.S. 12-10-410(6)).
• A broker paid by more than one party needs written consent from those parties before the contract (C.R.S. 12-10-410(7)).

Common pay structures

• Percent of price: a set percent, often with the seller's offered pay credited toward it.
• Flat fee: a fixed dollar amount.
• Retainer: an up-front fee paid to the brokerage to start work. A retainer may be credited against the final fee or be non-refundable; the contract should say which.
• Hourly: rare for buyers.
• Shortfall clause: the buyer pays the difference if the seller's offered compensation is less than the agreed fee.

Term, exclusivity and protection

Like a listing, a buyer agreement must have a definite termination date (Rule 6.14.D). It can be exclusive (the buyer may use only this brokerage) or non-exclusive (the buyer may use others; the broker is paid only when the broker produces the home). A protection period works like the seller holdover: after the agreement ends, the broker may still be owed pay for a home the broker showed. In Colorado that clause must cover only properties on which the broker negotiated during the term and whose addresses were given in writing to the consumer during the term (Rule 6.14.E).

The agreement cannot bind future owners, assign the service rights without the owner's notice and agreement, or create a lien; those lien terms are void and may be a deceptive trade practice (C.R.S. 12-10-403.5).

Tenant agreements

For renters, an Exclusive Tenant contract works the same way: the brokerage helps find a rental, the fee is often paid by the landlord through a leasing commission, and the same duties apply.

Typical sections

• Parties, and the brokerage and broker assigned.
• Relationship chosen and explained.
• Term and end date.
• Services the broker will provide.
• Compensation and who pays, including retainer, shortfall and protection period.
• Buyer's duties: work only through the broker, give honest financial information.
• Termination and the broker's duties after (account for money, keep confidential what the client asked to keep confidential; C.R.S. 12-10-409(2)(b)).

Standard forms

Use a Commission-approved form when it exists and fits (Rule 7.1.A). Don't change printed text unless chapter 7 allows it. Tell the client the form has legal effects and that they may want a lawyer to read it (Rule 7.1).

What to tell a buyer before they sign

• The fee is negotiable. Ask what the broker will accept and write it as a number or percent.
• Say who pays if the seller offers nothing, and what the shortfall could be in dollars.
• Say how long it lasts and how to end it early, and whether a protection period applies.
• Say which relationship you are offering (single agent or transaction-broker) and what each means.

A client who signs without understanding these is the client who files a complaint later.

Example with real numbers

A buyer in Boulder County signs an exclusive right-to-buy contract: fee 3% of price, $1,000 retainer credited at closing. The buyer buys a $500,000 house. The listing offers the buyer's broker 2.5%.

1. Agreed fee: $500,000 x 0.03 = $15,000.
2. Seller pays: $500,000 x 0.025 = $12,500.
3. Shortfall: $15,000 - $12,500 = $2,500, owed by the buyer under the shortfall clause.
4. Retainer credit: the $1,000 already paid reduces the shortfall: $2,500 - $1,000 = $1,500 due at closing.

If the seller's offer were 0% (the seller will pay nothing), the buyer would owe $15,000 - $1,000 = $14,000. This is why buyers need the pay terms in writing before they tour.