Co-broking is a common practice among property agents, although not an officially acknowledged one. It is a practice whereby property agents, quite often just passing acquaintances, become “partners” in selling a property. There are a number of reasons for doing this, and here are some of the advantages and disadvantages to be found in doing so.
Selling properties you don’t have a right to
This is a common problem among property agents, especially when the agent has potential clients who wish to buy a new development which the agent does not have a link to. In this case, the property agent will either seek out an acquaintance who might have rights to sell the property, or visit the other showroom, become ‘friends’ with another property agent who has the rights to sell the development, and strike a deal with them.
Considering that the commission for new developments are higher, this is usually a win-win situation. In an ideal situation, once the sale has been made, the developer agent will split the commission with the introducer.
Unfortunately, it is a very common scenario for the developer agent to play the introducer agent out – and there will be nothing that the introducer agent can do.
Selling another person’s property
This is another scenario similar to the one above. A common situation is that when selling a subsale property, your prospect is not interested in your unit but expresses an interest for viewing more units within the same area.
What an agent can do here is to survey the neighbourhood, look for all the other units for sale in the area and contact their respective agents. Once contacted, the agent can attempt to discuss co-broking with the other agent.
Once again, there have been many cases of agents being playing out – so if taking this step, please beware; as there will be nothing you can do if the other agent refuses to give you your share of commission.
Commission disputes
Another issue that many agents face are disputes in the shared commission. In the event that a co-broke property has been sold, there have often been disputes of how much one agent owes the other.
Usually the introducer agent will want at least half of the commission, as after all, fair is fair. However, it is very common for the agent who made the sale to pay less than the agreed upon amount, on account of his having to do most of the work.
In this case, there is nothing the other agent can do either, as there are no official documents to back the dispute up. And in this scenario, all the agent can do is accept what the other agent agrees to pay them.
Cases of co-broking partnerships gone wrong are plentiful, leaving behind much hurt feelings and a bad taste in the mouth. The worst of the cases have sometimes even involved the customers, leaving them in an extremely uncomfortable position.
Nevertheless, despite the many cases of co-broking gone wrong out there, there are just as many that went exactly as they were supposed to. Many agents have even built friendly long term working relationships through co-broking with other agents.
So for those who are looking to explore the partnerships of co-broking, get to know your potential partner well before partnering with them to avoid the unpleasant situations above, and treat them well. Trust is after all too precious a commodity to lose, and having someone help you out with selling your property and getting half the commission is better than nothing at all.
Images sourced from Getty
Diane Foo Eu Lynn, Senior Content Specialist at PropertyGuru, edited this story. To contact her about this or other stories email diane@propertyguru.com.my
