Definition
A cooperating broker is a real estate broker who works in collaboration with another broker primarily for the purpose of facilitating a property transaction. Typically, a cooperating broker is the one who represents the buyer in a real estate deal where another broker, known as the listing broker, represents the seller. In these scenarios, both brokers agree to share the commission earned from the sale; this agreement is referred to as a commission split.
Examples
- Example 1: A homeowner lists their property for sale with a listing broker. A different broker brings a buyer who is interested in purchasing the property. The brokers come to a mutual agreement to share the commission once the sale is completed.
- Example 2: In a commercial real estate transaction, a brokerage representing the property owner collaborates with another brokerage that has a client interested in leasing the space. Both brokers agree to divide the commission based on their roles in facilitating the transaction.
Frequently Asked Questions (FAQs)
What is the difference between a listing broker and a cooperating broker?
A listing broker is the real estate professional who lists the property and represents the seller, while the cooperating broker typically represents the buyer and cooperates with the listing broker to facilitate the transaction.
How is the commission split?
The commission is usually split based on an agreement made prior to or during the transaction. The split can vary widely but is often predetermined by listing agreements or multiple listing service (MLS) arrangements.
Is a cooperating broker always representing the buyer?
Most commonly, the cooperating broker represents the buyer, but it’s possible for a cooperating broker to work on behalf of the seller in other types of collaborative arrangements.
What happens if the deal falls through?
If the transaction does not close, brokers typically do not receive a commission. The specifics can depend on the contractual agreements in place between the brokers and the respective clients.
Are there any legal implications of cooperating in brokerage?
Yes, cooperating brokers must adhere to legal and ethical standards set forth by real estate regulatory bodies. This includes fiduciary duties, fair representation, and honest disclosure.
Related Terms
- Listing Broker: The broker who obtains the listing from the property owner and represents the seller.
- Commission Split: The division of commission between two or more brokers involved in a property transaction.
- Co-Broker: Another term sometimes used interchangeably with cooperating broker.
- Dual Agency: When a broker represents both the buyer and the seller in the same transaction, which can be closely related but differs from cooperating brokerage.
Online Resources
- National Association of Realtors (NAR)
- Real Estate Commission Definitions
- U.S. Real Estate Broker Regulations
References
- National Association of Realtors. “Real Estate Brokerage and Cooperating Brokers.” Accessed [Date].
- Real Estate Commission. “Commission Splits and Brokerage Relationships.” Accessed [Date].
Suggested Books for Further Reading
- “Your First Year in Real Estate: Making the Transition from Total Novice to Successful Professional” by Dirk Zeller
- “The Millionaire Real Estate Agent: It’s Not About the Money…It’s About Being the Best You Can Be!” by Gary Keller, Dave Jenks, and Jay Papasan
- “Real Estate Success in 5 Minutes a Day: Secrets of a Top Agent Revealed” by Karen Briscoe
