What you need to know about the Colorado law change effective August 12, 2026
If you’re planning to buy a home in Colorado, there’s an important change to the home-buying process.
Effective August 12, 2026, Colorado law requires real estate brokers to establish either a transaction-broker or single-agency relationship through a written agreement before performing certain licensed real estate activities. The agreement must also conspicuously disclose the amount or rate of compensation to be paid to the broker.
What does this mean for home buyers?
In practical terms, buyers should expect to discuss and sign a written agreement with their broker earlier in the process.
The agreement establishes the type of brokerage relationship, identifies important terms of the relationship and explains how the broker will be compensated.
Rather than viewing this as simply another form to sign, buyers can use the agreement as an opportunity to understand how they and their broker will work together before getting too far into the home search.
Transaction-Broker or Single Agent?
Colorado recognizes different brokerage relationships, and it’s important to understand which applies to you.
A single agent represents the interests of the buyer within the duties and obligations established by Colorado law.
A transaction-broker assists the parties with the real estate transaction without being an advocate or agent for either party.
Your broker can explain the brokerage relationships and the services associated with each so you can understand the relationship being established.
What should you understand before signing?
Before entering into a brokerage agreement, buyers should understand:
- The type of brokerage relationship being established
- The services the broker will provide
- The length or term of the agreement
- How the broker will be compensated
- Whether the buyer could be responsible for any portion of that compensation
- The provisions concerning changing or ending the agreement
Ask questions about anything you don’t understand before signing.
Why does the written agreement matter?
Buying a home involves substantial financial and contractual decisions. Establishing the brokerage relationship in writing at the beginning provides greater clarity about the relationship, the broker’s services and compensation.
For many Colorado buyers, signing an agreement with a real estate broker before beginning certain parts of the home-buying process may feel different from what they remember from a previous purchase.
The important thing is simply to understand what you’re signing and ask questions before moving forward.
Thinking about buying a home in Colorado?
I’m happy to explain the home-buying process, the different brokerage relationships and what you can expect before we begin looking at properties.
This article is provided for general informational purposes only and is not intended as legal, tax or financial advice. Real estate laws, regulations and contract forms can change, and individual circumstances vary. Consumers should consult the appropriate attorney, tax professional, lender or other qualified professional regarding their specific situation.
