5 Ways to Know if a Listing Broker Really Cooperates
Since I started in the brokerage business over 20 years ago, it was intuitive to me that it was important to cooperate with other brokers in order to fulfill my fiduciary obligation to my clients AND to maximize the value of their property. In my experience, listing brokers who actively cooperate with other brokers are insuring that the ultimate buyer is the one that will pay the highest price with the best terms which is in the best interest of the seller. At Progressive Real Estate Partners we take great pride in the fact that our firm has a strong reputation for cooperation within the brokerage community and is known as being highly responsive, equitable with fee sharing and deal oriented.
Unfortunately, there are brokers that put their interests above what is best for their client in an attempt to minimize their effort and maximize their personal reward. Many will tell you that they cooperate with other brokers meaning if another broker brings an offer they will work with that broker. What they don’t share is the obstacles they put in the way to avoid broker cooperation.
Here are 5 ways to tell if a listing broker really cooperates:
- Does the Broker Pay a Fair Co-Brokerage Fee? A fair co-brokerage fee is one that gives a strong incentive to a co-broker to represent a buyer for a property. This may be up to half of the total fee but in all likelihood, the fee will range from 30% to 50% of the total. If the listing broker recommends against offering a co-broker fee OR offering a much smaller fee they really don’t want to work with other brokers.
- Does the Broker Return Other Broker’s Calls and Emails? It doesn’t matter what the fee is if the broker doesn’t promptly return phone calls or email inquiries. Other brokers in the industry know the reputation of the listing broker so ask around to learn how the broker handles their business dealings. Figuring out whether the broker returns calls or emails may be tricky, but failing to be responsive is clearly how a broker avoids cooperating.
- Does the Broker Use Confidentiality Agreements? In my opinion, confidentiality agreements provide virtually no protection for the seller since generally speaking there are very few secrets in our business. However, they are effective at creating a “brick wall” for other brokers to learn about a property. How can a broker get a buyer interested without good information? Most confidentiality agreements require the broker to identify their buyer in order to get the package, but the co-broker might represent several potential buyers and until they review the information, they don’t know which clients might be interested. It is a chicken and egg situation with the seller getting a rotten egg.
- Does the Broker Tell Co-Brokers the Truth About Property Availability? Often times listing brokers who don’t want to cooperate tell the potential co-broker that the property is not available, under contract, or has a lot of offers and therefore it wouldn’t be a productive use of time for them to present the deal to their buyer. Again, it can be challenging to find out, but by asking around you can learn a lot about a broker’s reputation and business practices.
- Does the Broker List the Property on Electronic Websites and Make It Easily Available to Download the Marketing Materials? The easier a listing broker makes it to access the offering memorandum, the higher the probability other brokers will be able to share this information with potential buyers. Most buyer rep brokers research sources such as Costar, Loopnet, and Xcelligent as well as the websites of the most active listing brokers. Ask the broker if all of their listings are posted on these websites. If not, they aren’t looking out for the client’s best interests.
You may be wondering why a listing broker wouldn’t want to actively co-broker if it is advantageous to their client. The answer is working with co-brokers means a lot more time responding to package inquiries, answering questions about the property, and responding to more offers. And, all of this extra effort comes at the cost of sharing the listing broker’s fee.
However, an experienced broker knows that welcoming broker cooperation is a “win-win” AND what is best for the client. It also ultimately builds loyalty and a positive reputation resulting in more listings and greater earnings for the broker.