If you're a selling or buying a place in New York City, you've probably heard the expression "co-broke" thrown around a bit. But what does it mean? And how can it help you/save you money? Here's what you need to know:
What it is: Co-broking is a practice in which a seller’s broker works together with a buyer’s broker to complete a sale, rather than handling the entire thing—and bringing in an unrepresented buyer—themselves.
How it works: As a seller, to get the highest price for your home, you’ll want to reach as many would-be buyers as possible, and you’ll want to make sure that the buyer who eventually purchases your place has a professional broker guiding him, too, so everyone has someone representing their best interests. By agreeing to co-broke (a Real Estate Board of New York rule), the seller's broker will send out info about the apartment to thousands of other brokers out there in NYC who might bring in these interested buyers.
What it costs the seller: Typically, sellers pay a 6 percent commission, which is split equally between the seller’s broker and the buyer’s broker. But if the buyer isn’t working with a broker of his own, then the seller’s broker can keep the entire commission. This actually creates a financial incentive for them not to co-broke a deal, and sometimes it means you can pay them a little bit less since they're keeping the whole commission for themselves.
How you can protect yourself: While the majority of Manhattan brokers are REBNY members, and therefore are required to co-broke, this is not the case in all boroughs.
But it's in your best interests for your broker to co-broke. It means more eyes on your property. So try and keep tabs on your broker to make sure he or she is actively shopping your listings around on major websites like StreetEasy. And if they’re not? It may be time to find a new one.
For more, read “What is co-broking, and why does it matter? A primer for sellers.”
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