Cobroking has many terminologies known as co-brokerage, co-brokering and co-agency. Most agents in the market prefer using the short form term “co-broking” but there are some corporate agencies who prefer using the term “co-agency” because it sounds more professional. All the terms possess the same meaning.
Cobroking in the real estate agency industry is a vital practice. Cobroking means two or more real estate agents connecting buyer and seller within the same real estate transaction. The core concept of cobroking is to utilise a wider human network to match a buyer and a seller. The more agents involved theoretically increase the chances of matching.
Buyer agent is more valuable in cobroking
The position between a buyer agent and seller agent is not equal in a cobroking relationship. A buyer agent usually possesses more authority because there are more sellers than buyers in the market. Buyers are scarce resources. This empowers buyer agents to choose which selling agent to cooperate with. A buyer agent can easily identify listings online and to contact the selling agent for coagency. Most seller agents are willing to share their commission with buyer agents to collaborate on possible cobroking.
Buyer do not usually pays a buyer commission
Most buyer agents prefer to work with a seller agent who can offer the highest commission when cobroking. Many inexperienced buyers are not aware their interests are no longer protected when not paying their buyer agent. This will end up them not receiving critical advice and often end up overpaying for problematic properties.
Below is a summary table on buyer and seller interest vs who pays the commission
| Commission Payer | Buyer’s Interest | Seller’s Interest |
| Only Seller | Not priority to protect | Priority to protect |
| Only Buyer | Priority to protect | Not priority to protect |
| Both Seller & Buyer | Buyer agent to protect | Seller agent to protect |
Most agents reject above 2 parties co-broking
Distortion of information is the main reason why most agents reject above 2 parties cobroking arrangements. Below is an example of how a 3 parties cobroking arrangement can distort information.
Buyer’s information will never transmit fully to the seller. Vice versa. If there are even more agents in between the dealing, then more information distortion will occur. Miscommunication between a potential buyer and a seller must happen resulting in a series of problems such as misrepresentative, negligence and unprofessionalism. Agents view this as time wasting because they rarely close deals on these arrangement.
Other reasons why agents reject above 2 parties cobroking
Some may argue lesser commission split is the root of agents rejecting above 2 parties cobroking. This is not true. Most agents are willing to cobroking with multiple layers of agents to earn a commission instead of earning nothing.
Other reasons cobroking practice is not preferred are because
– buyer and seller agents cannot reached each other promptly
– unfair commission splitting
– fragile working relationship
Rejecting the chance to cobroke does cause agents to lose potential income. Maybe the above 2 parties cobroking could work with the help of technology.
The co-broking revolution with customised ERP
In China, Beike’s Agent Cooperation Network (the ACN model) is something every real estate agency in the world should study. The listed company in the NYSE, USA fundamentally has proven to the world that with the help of technology, complex co-broking mechanisms can work. Their ERP software allows up to 10 real estate agents to cooperate on the same transaction. This system transmit information more accurate. Utilizing a large human network to match potential buyers and sellers can generating more sales not possible before. Many companies are now embedding variants of this ACN business model to their practice.
The China ACN model is only one of the customised ERP approach to the concept of cobroking. There are many other possible approaches with the help of technology that were not possible before.
Other possible cobroking solutions in Malaysia
Listingmine’s groupware approach on cobroking is another possibility. The CRM equip private groups with essential tools to refine leads for coagency.
Appiliate is a cobroking technology specialised in primary market properties where buyer agents can find reliable launches. All property information and commissions are clearly specified. There is also a sales assistant function to help the buyer agent to serve their potential buyers if needed. This works wonders when the buyer agent is not familiar with the property.
Proptech has had a great impact on the cobroking industry. We expected to see more innovation in this field in the near future.
