Cooperating Broker

Definition of "Cooperating broker"

Written by

Kim Andrews

EXP Realty

A cooperating broker or agent defines a real estate broker who helps another broker in a private property transaction. Typically, the cooperating broker represents the seller and is responsible for finding a buyer. The client will offer to purchase real estate, which, however, was listed with a different listing broker. 

Assisting brokers can also represent buyers, tenants, or even landlords. In short, they facilitate the sale and purchase of a house. 

Cooperating broker’s compensation

Cooperating agents receive their commissions after the closing day. Generally, cooperating brokers don’t sign a contract with the seller, so they have no contractual relationship. By definition, the cooperating broker can’t ask for a commission from the seller, only the listing broker or agent. 

Listing brokers negotiate with property sellers about their share after a successful sale. After negotiations, they sign the listing agreement. For this reason, listing brokers have the upper hand in determining the amount of compensation for cooperating realtors, either in the form of a substantial sum or percentage from the sale.  

In other words, terms of payments and premiums should be stipulated in an agreement with the listing broker. Negotiations between the listing and cooperating brokers should not affect the contract between the broker and the seller.

Cooperating vs. listing brokers

As a result of nowaday’s increased buyers’ demand and a booming real estate market, a heated debate commenced centering on the topic of cooperating brokers’ fair compensation. After all, their input in finding a clientele is essential, while often listings aren’t entirely satisfactory. 

All parties agree that there are specific differences in buyers’ and listing agents’ marketing strategies. Still, a listing is an essential element of doing business in real estate.

Marketing strategies for brokers

In a digital age, practical marketing tools assist listing agents in engaging a large clientele. Still, cooperating agents can pursue leads by hosting open houses or testing creative ways to generate more leads. They will argue that they accomplished a considerable part of a successful transaction by themselves.

However, a cooperating broker is disposed to give up a part of their commission under exceptional circumstances. For example, the listing agent invested significant effort and time in marketing the property. 

Responsibilities of brokers’ involved

Local real estate agents and brokers must, under all circumstances, represent their customers’ very best interests. A selling client has the right to be informed about the cooperating brokerage’s compensation before signing a listing contract and registering their property on the multiple listing service. In addition, cooperating brokers must not withhold relevant information from a buyer based on their payment amount. This unprofessional behavior constitutes a breach of Article 1 of the real estate Code of Ethics.