Broker Risk Management LLP Logo

Co-Listings

by | Mar 2, 2018 | Contracts and Forms

Q:  I have been talking to a seller-wife about listing the home that she and her soon-to-be ex-husband own together.  There is a pending divorce and, while husband prefers to list with another broker, wife definitely wants to list with me.  Can we do that?  How do we do that?  Two separate listing agreements?  What are the pitfalls?

A:  Co-listings are somewhat common but it is important to decide upfront certain key issues about the handling of the listing and those issues need to be handled in writing:

  1. THE CO-BROKER:  A threshold consideration is whether you want to have a working relationship with a particular listing agent or listing brokerage.  Ask yourself:
  1. “Is this an agent or broker with a good reputation in the area?”  If you co-list with a less than ethical agent, you may get dragged into a lawsuit or ethics complaint based upon what the other agent did or failed to do.
  1.   “Is this an agent with a reputation for hard work?”  If not, you may find that you are doing all of the work for half of the listing commission.
  1.   “Is this agent knowledgeable and competent in this area and for this type of property?”  If the other agent is not experienced or works out of area, you, again, will be the one pulling the laboring oar.
  1.   “Is this broker a member of the local MLS for offer of compensation and recognition of the sale”
  1.   “Does this broker have E&O insurance.”
  1. THE LISTING AGREEMENT:  The best approach would be to have one Listing Agreement with the names of both brokerages identified as “Broker” and also use the CAR form Additional Broker Acknowledgement (form “ABA” on zipForms).

(NOTE: This CAR “ABA” form can be used with other listing forms as well.)

Then, check the box at the end of paragraph 1 of the “ABA” indicating that the co-brokers are sharing responsibilities and compensation “on the terms of the attached agreement.”

Then attach to the “ABA” the Co-List Agreement found at the end of this Tip.

  1. THE CO-LIST AGREEMENT:  The Co-Listing Agreement sets forth the rights, duties and obligations of each of the Listing Brokerages.  Some of the decisions that will have to be made before you begin include:
  1. How will the listing commission be split if either of the co-listing brokerages procures the buyer?
  1. Who will pay for what advertising and marketing?
  1. Whose name will appear in the MLS and on the signage on the Property?

 

PRACTICE TIPS: 

 

  1. Jointly discuss the co-listing arrangement with the seller(s) so that seller(s) understand fully understand that
  1. Both brokers/agents have full fiduciary duties to all sellers.
  1. Any communications to or from either broker/agent and to or from all sellers, must be fully disclosed to all.  There can be no secrets.
  1. Discuss the potential co-listing with your manager or broker before proceeding.
  1. If you do decide to proceed, discuss the various issues with the other agent so that everyone understands what the arrangements will be.
  1. Both co-listing brokerages need to sign the “ABA” form and attach the completed co-list agreement, then attach those to the listing agreement to be signed by the seller(s).
  1. Documents to be Signed:  Both co-listing brokerages must present the Agency Disclosure form and the Disclosure & Consent for Multiple Seller Representation form to the seller(s) before signing the Listing Agreement.  Both Brokers must sign the Listing Agreement and each brokerage needs to complete and sign the AVID, the NHDS (as applicable) and the Lead-Based Paint Addendum (as applicable).
  1. Fiduciary Duties:  Both agents must remember that both brokerages have full fiduciary duties to all sellers including advising sellers on their disclosure obligations, advising on strategic issues during escrow and drafting contract documents.  Such duties cannot be left to just one of the co-listers.
  1. Planning and signing a Co-Listing Agreement upfront will prevent problems later in the transaction.

This Weekly Practice Tip is an attorney-client privileged document for the exclusive use of clients of Broker Risk Management and their agents.  It may not be reproduced or distributed without the express written consent of Broker Risk Management.  The advice and recommendations contained herein are not necessarily indicative of standards of care in the industry, but rather are intended to suggest good risk management practices.

 

Copyright Broker Risk Management 2018                                                                                                    3/2/18

 

FORM FOLLOWS BELOW:

 

CO-LIST AGREEMENT

This is an Agreement between ____________________________, a Sales Associate with _________________________ (“Broker 1”), and _________________________ a Sales

Associate with _________________________________ (“Broker 2”) (Broker 1 and

Broker 2 are Collectively referred to as the “Brokers”) to co-list that real property and the

improvements thereon located at: ____________________________________________

(the “Property”) pursuant to the following terms and conditions:

____________________________________________________________________________________________________________________________________________________________

  1. Brokers have, or will, enter into a mutually-acceptable Listing Agreement with all of owners of the Property, as co-listing brokers, and agree to the following terms with respect to that Listing Agreement.  This Co-Listing Agreement shall be in effect for the period of time agreed upon as the term of the Listing Agreement, or any extension thereof.
  1. Brokers agree that the listing portion of the commission shall be split between them as follows:
  1.   In the event that a buyer is procured by an outside brokerage, or by another agent affiliated with one of the Brokers, then the listing commission shall be split:

___% for Broker 1 and

___% for Broker 2.

Other: __________________________________________________________________

  1. In the event that a buyer is procured by one of the above-identified Sales Associates or the Sales Associate’s Broker, then that Broker shall serve as a disclosed dual agent but, for purposes of communications, that Sales Associate shall work with the buyer, and the other above-identified Sales Associate shall work with the seller in the transaction.  The Broker working with the buyer in this situation shall be entitled to receive the full selling side of the commission, and the listing commission shall be split:

__________% for Broker exclusively representing the seller; and

__________% for Broker representing the buyer and the seller.

  1. Marketing expenses for the property shall be split 50-50 between Brokers except as follows:  _________________________________________________________________________

_________________________________________________________________________

  1. The following shall be the signage on the Property:  ____________________________
  2. In the event the local MLS only allows for one listing broker to be shown, the MLS listing for this Property shall be shown as follows:  _______________________________________

________________________________________________________________________

  1. Open houses shall be handled as per agreement between the above-identified Sales Associates and as approved by the seller.  If the Sales Associates are unable to agree, then they shall alternate open houses each week.
  1. Other Terms and Conditions: _________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

  1. In the event of a dispute arising out of or related to this Agreement, the undersigned parties agree to first attempt a resolution of this matter through informal mediation.  If mediation is unsuccessful, the undersigned parties agree to arbitrate the matter through the local Association of REALTORS® (“AOR”) or, if the Brokers are members of different Associations of REALTORS®, through Inter-Board (“IB”) Arbitration, in accordance with the AOR or IB arbitration rules.  In any such dispute, the prevailing party shall be entitled to recover reasonable attorneys’ fees and costs.

(Insert Broker 1 Name)                                (Insert Broker 2 Name)

By: ___________________________           By:____________________________

Date:   ________________________            Date: __________________________