Which of the following describes what is required to avoid being a transaction-broker by default in Colorado?

• A. Verbal Disclosure
• B. Written Brokerage Disclosure to Buyer/Seller
• C. No Disclosure Needed
• D. Written Disclosure to Lender

Answer: (B)

In Colorado, the default brokerage relationship is a transaction-broker, meaning the licensee can assist both parties without fiduciary duties to either. To avoid that default, the licensee must provide a written brokerage disclosure to the buyer and the seller. This written disclosure explains the nature of the relationship and allows the parties to choose a different arrangement (such as single-agent representation for one party or designated broker for the transaction). It should be given at the first substantive contact and acknowledged by both parties, ensuring they understand and consent to the chosen representation. Verbal disclosure isn’t enough, and disclosure to a lender doesn’t change the broker’s relationship with the buyers/sellers.