WHAT IS CO-AGENCY?

 

A Co-agency is usually a cooperative framework in which two or more realtors or agency firms collaborate on the same property deal. Listing firms represent the Listing Agent (LA) and Cooperating Firm by the Co-agent (CA). 


How does Co-agency work?

  1. Both agents should sign the agreement first before commencing the work. Agreement will prepared by the Listing Firm because they are legally appointed by the vendor to go and sell and market their property. 
  2. Both parties must agree with all the terms and conditions in the agreement and sign it before proceeding to the next step. 
  3. The Listing Agent (LA) will collect the deposit once the deal is closed. The listing Firm will issue the fees to the Cooperating Firm and that's how they get their commissions. 






How much does the Co-agency share?

In a standard way, it's a 50-50 sharing. Somehow, it depends. Some LA will say they are collecting 3% and if any agent wants to do co-agency with them, the fee sharing is 1% so the LA gets 2% but of course, provided both agents agree in whichever format they want to do. But somehow, there are some LA who pay more as an incentive. 


Generally, the LA will determine how much the fee sharing is in this procedure. 


Who Holds the Earnest Deposit?

Generally, No One! 

Co-agent (CA) represents the buyer, not an appointed buyer. Appointed buyer agent means the buyer will pay a fee and act for him to become buyer agent so the agent will have the right to collect the earnest deposit. 

But nowadays, the CA will share with the LA, so who's gonna pay the fee for the CA? For sure gonna pay by the Listing Firm or by the Vendor which is the LA represents the seller because the seller is paying the fee. 

So, next time if you want to do a Co-agency and you are the CA, it is advised that you do lots of work for the buyer and make them appoint you as an agent because when you are their agent, you can collect the fee from them and the LA will collect the fee from the vendor so both of agent will maximize their fee. 


But, how to ask the buyer to pay for the fee? 


If you are the Co-agent, you can say " I represent the seller, and so I cannot protect your interest but if you appoint me as an agent and you pay me 3% or 2% I can protect your Interest and I can negotiate on your behalf the price that you're looking for" 


So, back to the question, who hold the deposit? - It's the Listing Agent (LA). It is the Listing Firm that hold the fee unless the vendor says, they allow the Co-agent to hold the money. 


Who issues the Co-agency letter?

The Co-agency letter issued by the Listing Firm, which serves as the official representative in this collaborative real estate transaction. 


By outlining all co-agency agreement provisions explicitly, the Listing Firm facilitates a clear and efficient process including accounts of responsibilities as well as commission division among the parties concerned.






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