Co-broking is a common practice among real estate agents, although it is not considered an official and widely-acknowledged practice. It is an activity where real estate agents become “partners” in selling a property. There are benefits of partnering up with another agent to make a sale but it doesn't always go your way.
Our article today highlights 3 key advantages and disadvantages of co-broking:
- Selling properties you don't have a right to
This is common among real estate agents with potential clients who are interested in buying a new development but the agent does not have a link to.
The agent will find another agent who have the rights to sell the property or visit showroom, befriend another agent who has the rights to sell the development and strike a deal with them.
Ideally, once the sale is made, an agent will split the commission with the other agent. Yet sometimes the commissions aren't paid and there is nothing the other agent can do about it.
- Selling another person's property
Another common situation involves the sale of a second-hand property which the buyer is not interested in but expresses an interest in viewing other units within the same area.
This agent will then survey the neighbourhood to look for other units for sale and contact the respective agents of those units.
Once contacted, the agent can connect with the other agent for the prospect of co-broking. If you do this, remember, there is nothing you can do if you don't get a share of the commission.
- Share-of-commission disputes
Disputes of how much an agent owes the other agent often occurs in the event that a co-broke property has been sold.
One agent will want half of the commission, yet the agent who made the sale may pay less than the initial amount, on the account that he did most of the work.
As there are no official documents stating the agreement for the shared commission, you can only accept what has been offered to you.
Working with other agents is a great way to close more sales. There may have been occasions where these partnerships have gone wrong. But there were also partnerships that went well, resulting in long-term working relationships. If you are keen to explore this option, do get to know your partner well before working with them. After all, it is great to have someone helping you out with selling your property and getting half the commission than having nothing at all.
