Question Details

Terry Sanford,  in Boston, MA

Referral Fee vs Co-Broke Fee

Asked by Terry Sanford, Boston, MA Wed May 6, 2009

When you list a home for sale. Would you rather pay a co-broke fee and work with a buyer represented by another agent or pay a slightly smaller referral fee and work with a direct buyer.

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dp, there should be a selection for 'investor' or something like that. Your input is always reasonable and informative and so much more interesting than some of the other raves posted.
0 votes Thank Flag Link Thu May 7, 2009
Lori, although I'm not an agent, you're correct that I'm VERY active (in multiple markets). I'm an investor who invests in commercial and residential RE.

Besides working on deals, I try to spend at least an hour or two per day devouring any reading material that I can about anything real-estate related. I want to know what other investors are doing. I want to know what agents, mortgage brokers, RE attorneys, bankers, and any other RE professionals are doing. I'm scouring every marketing or sales related data that I can find, and the list goes on.

I opted for "other" when I signed up, because Trulia didn't have a selection specifically for investor. Later, Trulia added "buyer and seller" and appended "just looking" to "other", and I didn't feel the need to change the tag. Besides, I trust that others will be able to discern--as you did--that I know what I'm talking about, and that I'm actively shopping.
0 votes Thank Flag Link Thu May 7, 2009

I'm still confused about you being a real estate agent or not! You know too much to not be active!
0 votes Thank Flag Link Thu May 7, 2009
Terry, your intent isn't entirely clear, because the way you framed your question leaves room for lots of (mis-)interpretation. Several of the agents here have interpreted your question as a request for dual-agency. However, I (as an investor) see a few other ways to interpret your question: 1) a wholesale or assignment transaction, 2) bird-dogging combined with using your own buyers list, or 3) a flat-fee listing combined with wholesaling or using your own buyers list.

In any case, I don't view the situation as an either-or one. Instead, I view it as a both-and one: I like to structure my transactions to have the maximum amount of exposure. Stated another way, I do all of the above--not necessarily all at the same time. Whether or not I work with a flat-fee listing service or full-service broker, I'll provide him/her/them an exclusions list if I already have a buyers list and/or other self-placed advertisement (that's specially coded so that I may track the buyers' information source) in place.

The reason I do things this way is not to "save a buck"; I view co-broke, referral, and other fees simply as some of the costs for doing business. Instead, I do things this way for 2 reasons: 1) to maintain a certain level of consistency (since I invest in multiple markets, and since agents/buyers in different areas are used to various local customs), and 2) to maintain and further develop relationships that I already have. After all, sometimes a broker on one deal might become a co-sponsor or one of the investors--as well as the broker--on another deal. I'm perfectly fine with this, and I make sure that we'd disclose all of this (via the PPM) to any potential participants for that deal.
0 votes Thank Flag Link Thu May 7, 2009
Hi Terry
When you list your house for sale you definitely want a listing agent (his agency) to share the commission with with the co-operating buyer's agent (his firm,agency).
in this market you want as many professioal realtors as possible show your house in order to sell it in a timely manner.
Good Luck.

Broker Associate
561-843-7010 Mobile
0 votes Thank Flag Link Wed May 6, 2009
do you mean having a listing agent pay the buyer's agent a fee to remove him from the picture? Can't imagine any buyer's agent or buyer agreeing to that.
0 votes Thank Flag Link Wed May 6, 2009
WOW do not get that choice here can not imagine why an associate with a buyer as a customer would agree to that!
0 votes Thank Flag Link Wed May 6, 2009
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