Real estate brokers through both formal and informal arrangements have by custom joined their efforts to procure buyers. For the most part these cooperative efforts have resulted in benefits to all concerned with the transaction. Most importantly, the seller receives faster service than might otherwise have been the case. Although the listing broker must share his fee, marketing costs are reduced and the seller is pleased with the service received. The selling broker through co-brokerage is given a greater inventory from which income may be derived and a relationship with the buyer, who immediately becomes a potential seller, is established.

Co-brokerage is recognized as being a valuable marketing tool, however, extraordinary care must be exercised in such a transaction. The potential for misunderstandings is increased substantially when the listing broker is not working directly with both parties to the transaction. Under such conditions, the listing broker should be confident that the selling -broker will be working in the property ,owner's best interest and will not make careless representations with regard to the property. Remember, the seller employs the listing broker placing special trust in his ability. As a result, the listing broker may usually delegate some of the mechanical services but he will not be relieved of the responsibility accompanying the agency relationship created.

The alternative, when you are unfamiliar with the ability of a would be co-worker, is to work directly with the selling broker through the showing and all negotiations. Or it may be safer to accept the referral and conduct the showing and all negotiations yourself.

Although situations may arise wherein you feel your clients' interests would not best be served by co-brokerage, you have a legal obligation to submit all written offers to the seller. When transmitting the offer you also have an obligation to point out to your client the reasons why 'you feel he should or should not accept the offer.

Inspecting the coin from the flip side, a selling broker must also take extraordinary precautions. A selling broker must always keep in mind that his fee will be paid by the seller and as a result the seller's best interests must be promoted at all times. The seller must always guard against aligning himself too closely with a prospective buyer. Rather than lose a prospective buyer an offer should be encouraged, however, the broker should not suggest that the seller would accept anything less than the terms of a listing. If a buyer makes an offer and the selling broker receives the impression that the prospective buyer would make a better offer, this fact must be conveyed to the listing broker and in turn to the seller. The risks of rejecting an offer or making a counter-offer should also be discussed with the seller at the time of presenting the offer(s).

Another consideration for a selling broker is that in most instances the property data is furnished by the listing broker. When asked questions by a prospective buyer regarding the property the selling broker should, if such is the case, advise that he does not have personal knowledge, but the date sheet indicates. He-should then offer to verify the data or at least emphatically advise the prospective buyer to personally verify the information.

Points to remember:

(A) Unless otherwise agreed to by the parties, both listing and selling broker must promote the best interest of the one client. In most transactions both the listing and selling brokers are agents of the seller and a conscious effort must be made to avoid violating the position of special trust.

(B) All information received by listing and selling brokers which would affect the client's interests or decision must be conveyed to the client. All written offers must be submitted to the seller. Although the listing broker may offer his opinion on the merits of a particular offer it is the seller's decision to accept, reject or counter-offer unless specific authority to the contrary has been granted by the seller.

(C) Earnest money deposits must be held by the listing broker unless otherwise agreed to in writing by the parties to a transaction.

(D) Extraordinary care should be exercised in a co-brokerage transaction to avoid misrepresentations. Personally verify data before conveying information as fact. Do not make assumptions. If you are relaying information provided by a seller or listing broker which cannot be verified, identify its source with special emphasis, preferably in writing.

(E) Reduce to writing all agreements between the parties and whenever possible important points concerning a transaction when made orally, should be followed up in writing.

-Reprinted from the March, 1978
issue of the
Maine Real Estate News