Why Real Estate Agents Should Consider Co-Listing

A 2021 study published in The Journal of Real Estate Finance and Economics found that “co-listing produce[s] higher prices and [is] more likely to result in a sale.” 

So should we all be co-listing now? What are the benefits? And are there any downsides?

Here’s what you need to know about co-listing in today’s real estate market.

What Is Co-Listing?

Co-listing is when two real estate agents work together to serve a home seller in a single transaction. The two agents will share responsibility for marketing the property, arranging showings, and getting the house from contract to close. The agents will also split the commission. 

With a co-listing, the work might be divided evenly. Or the agents might agree to have one lead agent handle most of the work. The commission split can be 50/50 or it can be negotiated so that one agent keeps more of the commission than the other. The division of responsibilities and commission split is usually decided before the agents accept the listing. Both agents sign a Co-Listing Agreement to outline the terms of the shared listing between the agents.

In many cases, the commission is split based on how much work each agent does. If one agent is going to do 75 percent of the work, that agent would get 75 percent of the commission. But this isn’t always the case. Sometimes the agent who brings in the client will want a higher split in exchange for bringing the other agent the opportunity. 

When Does It Make Sense to Co-List?

There are several situations where co-listing is a smart idea:

1. When You’re a New Agent

Getting your first listing can be difficult as a new real estate agent because you don’t have real-world experience to show the sellers that you can handle their listing. But if you can find an established agent to co-list with, you can gain experience while reassuring the sellers that an experienced listing agent will be actively managing the listing with you. In this case, the new agent typically does most of the work but splits the commission 50/50.

2. When You’re Moving Into the Luxury Market

Going from average homes to the luxury real estate market is a big career move. And, just like being a new agent, you need experience before sellers will trust you with their homes. By co-listing with a reputable luxury agent, you’ll start building your track record of luxury sales.

3. When You’re Too Busy to Properly Serve Your Sellers

What if you have more work than you can manage? You might have an assistant to help with the workload. But if your assistant doesn’t have a real estate license, the tasks they can help with are limited by law. So you can offer another agent the chance to co-list with you and share the work.

4. When You’re Going to Be Unavailable for Part of the Listing Period

Do you have a vacation or temporary leave planned? If you know you’ll be unavailable to your sellers for a short time, you can co-list so that your partner can handle the listing while you’re away. Side note: If you’ll be gone for an extended time, you might want to refer the listing to another agent for a referral fee instead of co-listing. You won’t get as much money, but you also won’t be liable if something goes wrong with the listing.

The Benefits of Co-Listing

Co-listing offers several advantages, including:

  • The sellers are well-served with two agents.

  • You can gain experience as a new agent or in a new market.

  • You’ll have someone to share the workload.

  • The listing gets additional exposure as both agents promote it. 

  • Each agent can bring a different skill set to the listing.

Potential Downsides of Co-Listing

Before you co-list, be aware of the possible negatives:

  • You’ll earn less than if you listed alone. 

  • The other agent’s behavior could reflect poorly on you if they don’t handle things properly.

  • You might end up doing more work than your commission split warrants.

  • Tasks might fall through the cracks if each agent assumes the other agent covered that task.

The solution to most of these potential downsides is open communication. Before signing a co-listing agreement, discuss which tasks will be handled by which agent. And continue communicating clearly and professionally throughout the process.

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