In a market of foreclosures and tumbling property prices, real estate agents are increasingly relying on co-brokers to move units. These secondary brokers are, thus, now pocketing higher commissions than they got before.
The Real Deal: Normally, a buyer’s broker gets a 3 per cent commission on a home sale. But as sales grow fewer and further between, more and more developers are offering 4, 5 or even 6 per cent co-broker commissions in hopes of enticing brokers to show their units to prospective buyers. The practice has become so common that a 4 per cent commission for co-brokers is becoming the new standard for developments with large numbers of units to sell…
It’s unclear if the practice increases sales, but brokers say it helps generate broker interest.
“When you’re doing construction and selling a building, you don’t necessarily always reach everyone you want to,” said J.J. Bistricer, the executive vice president of Clipper Equity, developer of BellTel Lofts. “We said to ourselves, ‘there’s got to be a lot of brokers who don’t know we exist.'”
Some developers have become so desperate that they’re offering to pay part of a broker’s commission up front, before the sale closes.
Business Insider Emails & Alerts
Site highlights each day to your inbox.