## Facts

- Beneficial owned a residence in Arvada, Colorado and listed it for sale through a listing broker in a multiple listing service (MLS).
- Odell and Kathy Stortroen worked with a cooperating broker’s associate (through another brokerage) to locate and purchase a home.
- The Stortroens submitted an offer that included a contingency; Beneficial issued a written counteroffer with an acceptance deadline and a requirement that acceptance be “communicated to the seller” by that time.
- Before the deadline, the Stortroens signed a written acceptance that removed the contingency and delivered it to the cooperating broker’s associate.
- Before the listing broker received word of that acceptance, Beneficial received a higher offer from competing purchasers.
- The listing broker telephoned the cooperating broker’s office and left a message withdrawing Beneficial’s counteroffer, and Beneficial proceeded to accept the higher offer.
- The Stortroens sued for specific performance and related relief; the trial court granted summary judgment for Beneficial on the ground that the cooperating broker was the buyers’ agent, so notice to her was not notice to the seller and no contract formed before revocation.

## Issues

1. In a residential real estate sale conducted through an MLS, whether the cooperating (selling) broker or salesperson is, absent a written agreement to the contrary, an agent/subagent of the seller through the listing broker or an agent of the buyer.
2. If the cooperating broker is within the seller’s chain of agency, whether the buyers’ timely written acceptance communicated to that broker satisfies a counteroffer term requiring acceptance be “communicated to the seller,” thereby forming a contract before attempted revocation.

## Decision

- The Colorado Supreme Court reversed the summary judgment and remanded.
- The court held that, in an MLS residential transaction, the cooperating broker or salesperson is, absent a written agreement creating a different relationship, an agent of the listing broker and thus within a chain of agency to the seller.
- Because the cooperating broker was in the seller’s chain of agency, communication of the Stortroens’ timely acceptance to the cooperating broker’s associate constituted notice to the seller.
- The Stortroens’ timely acceptance formed a binding contract before Beneficial’s attempted withdrawal and subsequent acceptance of the competing offer.

## Legal Principles

- In residential MLS transactions, absent a written agreement establishing a different agency relationship, the cooperating (selling) broker is a subagent of the listing broker and, through that relationship, an agent of the seller.
- Notice given to an agent acting within the scope of the agency relationship is imputed to the principal.
- A counteroffer term requiring acceptance be “communicated to the seller” may be satisfied by communication to the seller’s agent within the established chain of agency.

## Conclusion

The court held that MLS participation generally places the cooperating broker within the seller’s chain of agency unless a written agreement provides otherwise; therefore, the buyers’ timely acceptance delivered to the cooperating broker gave effective notice to the seller and created a contract before revocation, requiring reversal of summary judgment and further proceedings.


Stortroen v. Beneficial Fin. Co. of Colo., 736 P.2d 391 (Colo. 1987)