Anyone who’s looking to sell their home in NYC will want the services of an excellent real estate broker. One of the first things you’ll discuss with them is their commission. Everything in real estate is negotiable, but once you’ve agreed on a commission, let’s say, 6%. You will then need to ask is if they are a REBNY member and co-broke. It is one of many little tricks when it comes to agreeing on a commission. 80%+ of real estate deals in NYC done as co-broke deals, as all reputable and large and small participate.
When your agent participates in the universal co-broke agreement, it ensures your property’s marketing exposure, maximized.
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What is a Co-Broke Agreement?
Co-brokering occurs when two agents agree to work together on a sale. One is representing the buyer and the other the seller, with the commission split between the two. By agreeing to work with another agent and divide the commission, a listing broker will get the advertisement out to a broader market. It includes back-end listings that are only visible to other realtors.
The good news for the people of NYC is that reputable large and small real estate firms are members of the Real Estate Board of New York (REBNY), which means; required to co-broke. It is all covered in the RLS Universal Co-Brokerage Agreement, which sets out the rules and regulations regarding the sharing of exclusive listings. Every leading agency in the city is a part of REBNY, and with approximately 50,000 licensees, a seller’s property is certain of getting the exposure it deserves. However, this is less common with smaller brokerages. If your agent doesn’t co-broker or lies about it, you’ll end up losing both time and money.
How do co-broke agreements benefit buyers, sellers, and agents?
Buyer’s brokers rely on their commission to earn their pay. If they find a listing that is not co-broke, they’ll need to collect the commission from the buyer. However, this is a rare occurrence; in such cases often, the price of the property is negotiated down to offset the fee.
It works similarly for sellers. If their agent doesn’t co-broke, the property will be getting a lot less attention than it might otherwise. The key to getting the best offer is to attract the most buyers possible. Co-brokering also shows that the agent is working with your best interests in mind.
Although it mightn’t seem so at first, co-broker can also be beneficial for the real estate agents. They’ll be getting less of a commission, but in exchange, they’ve expanded their network by working with another agent they wouldn’t have otherwise. The agent is likely going to think of them the next time they’re looking to co-broke.
Why would an agent not co-broke?
The best way to know if whether your real estate agent does co-brokering is to directly ask them in the interview, “What will you do to ensure my listing reaches the widest market possible?”. If they give a long answer by saying how long they’ve been in the business or how vast their network is, you can be sure they are trying to avoid having to co-broke.
Also, in today’s world of online-apartment hunting, it’s straightforward to monitor your apartment’s presence – or lack thereof. Another thing you’ll want to consider carefully is how much commission you are paying them. Smaller brokers will sometimes accept a commission of 3-4% rather than the usual 6%. If so, then brokers from larger firms might be less willing to show their clients the listing since they know they’ll only make a commission of 1.5 or 2%. As such, it’s better not to negotiate a commission so low that it hurts the agent’s ability to co-broke and maximize your property’s exposure.