Dear Readers,
(KL: 19.5.2010): You must have heard of these terms -- co-broking or co-agency in Malaysian real estate agency practice often enough to want to know: What is it? And, what does it entail?
So, let me blog on it in this post
What is co-broking or co-agency?
Co-broking or co-agency is a fee-sharing arrangement involving at least 2 real estate agencies: whereby the the "Listing Agent" agrees to share with the "Introducing Agent" the professional estate agency fee received by it in the event that the party introduced by the "Introducing Agent" to the "Listing Agent" submits an "Offer to Purchase or to Rent" - the property/properties shown by the Listing Agent to the Introducing Agent and the interested prospect - via/through the Introducing Agent to the Listing Agent for its client's acceptance.
Does it involve the property owner?
The Malaysian Estate Agency Standards ("MEAS 1999") aptly recognises that co-agency or co-broking (unlike sub-listing under the Contracts Act) does not normally involve the Client of the "Listing Agent" (usually the property Owner) - This is stated in the "Definitions Chapter" of the MEAS1999.
Does co-broking or co-agency involve an agreement?
Yes, co-broking and co-agency in practice involves an agreement known as the co-broking or co-agency agreement which must be reached before the Introducing Agent proceeds to introduce its interested prospect(s) to the Listing Agent. A co-agency agreement is a
contract contingent upon:
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firstly, the Listing Agent showing its property/properties to the Introducing Agent and its interested party;
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secondly, the Introducing Agent introducing its interested party to the Listing Agent and its property/properties; and,
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most importantly, the Introducing Agent securing an "Offer to Buy or to Rent" from its interested party for the property/properties shown by the Listing Agent for submission to the Listing Agent for the acceptance of latter's client.
Does it involve joint-inspection of the Listing Agent's property/properties?
Yes, in practice, it is through a joint inspection that the Listing Agent shows its property/properties to the Introducing Agency and its interested party and, conversely, the Introducing Agent introduces its interested party to the Listing Agent and its property/properties. This joint-inspection is governed by Standard 3.2.8 of the Malaysian Estate Agency Standard 1999 where it is stipulated the the inspection must be supervised by and with the consent of the Listing Agent. Standard 3.2.6 suggests that property inspection is best recorded and documented.
Does co-broking or co-agency necessarily involve the Introducing Agent introducing its interested party to the Listing Agent?
Yes, otherwise what was the basis or "quid pro quo" for the Listing Agent to agree to share its fee?
Does co-broking or co-agency necessarily involve the Introducing Agent securing an Offer from its interested party for submission to the Owner via the Listing Agent?
Yes, this is necessary because many a times the same interested party may view the same property/properties of the Listing Agent through another/other Introducing Agent(s) as well. Recognition and hence the payment of fee are only given to the Introducing Agent who successfully secures an Offer from the interested party for submission to the Owner via the Listing Agent.
Facts: Last year (2009), my estate agency (GT Realty) successfully carried-out co-broking or co-agency with 2 other estate agencies which acted as the Introducing Agents: Reapfield and JA Valley (Tropicana). Both agencies not only signed co-agency agreements with GT Realty but also proceed to actually:
1) introduce their prospective buyers to us via a joint-inspection of the properties;
2) submit to us their interested parties' Offers for our submission to our Clients (the property owners) for consideration/acceptance.
Hence, when the deals were closed and our fees paid, even before they invoiced us, their co-agency fees were already ready for their collection. This has been our long standing policy and practice. This can be verified with our other Introducing Co-agents: e.g. Mr. Kuek of Magmas where we co-broke on a Desa Sri Hartamas bungalow lot of considerable value and more (to be listed later), etc. To us, trustworthiness is very important in business as in any other areas in life.
However, please be forewarned that my agency will not entertain anyone (particularly the bogus agents, freelance agents or, agents and "sleeping principals" who sublet their "licences") who tries to claim co-agency fee from us purely on the basis of a co-agency agreement which has been signed, partially signed or which were merely a forwarded draft -
but which was not subsequently followed up with:
1) any introduction of any interested party to us;
2) any joint-viewing of our property/properties; nor
3) any submission to us of their interested party's/parties' Offer for our submission to our Clients for consideration/acceptance.
To us, no one can claim on the basis of an
unperformed contingent contract even if there was indeed such a contract - what more, if there wasn't! Disputes as to facts and law of co-agency are best settled in court as under the watchful eyes of the learned judge and the lawyers who are ever ready to pounce, lying won't be easy in court - more so when doing so is a very very serious offence!
Cheers.
All comments are welcome.
Another Community-Service Article by:
Douglas GT Tan
CEO/Proprietor
GT Realty
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