Co-Listing a Property
March 3, 2017
There are times when a seller may ask to co-list a property with another brokerage. This could be in hopes of greater exposure, or for assurance that they will have support should they want to work with a smaller brokerage who may not have the means to cover when licensees are out of town.
When co-listing a property, there are small but important differences to the paperwork requirements. Those requirements depend on which brokerages are co-listing the property and what their agency models are.
Scenario 1: When both brokerages practice the same agency model
When co-listing with another brokerage that practices the same agency model (either common law or designated agency), only one Seller Brokerage Agreement or Seller Designated Brokerage Agreement is required, and it must be signed by the seller and both brokerage representatives.
Who does what must be put in writing
In order to be clear to all parties which brokerage will be offering what services, an Addendum or Schedule to the Seller Brokerage Agreement or the Seller Designated Brokerage Agreement must be drafted to clearly outline the duties, obligations and promises of each brokerage. This should identify which brokerage will, for example, schedule viewings, be the seller’s point of contact, conduct open houses, invoice the seller’s lawyer, assist the seller with negotiations, hold the trust funds and advertise the seller’s property. This must also be signed by the seller and both brokerage representatives.
Keep identical transaction files
Each brokerage must maintain identical transaction files with true copies of all the required documents outlined in Bylaw 621, along with identical amendments or addendums that may arise.
Where will trust funds go?
Buyer(s) and/or the buyer’s representatives need to know which brokerage will hold trust funds prior to the preparation of an offer. The simplest and most effective way to do this is to amend Clause 1(a) of Part 1 of the Agreement of Purchase and Sale to reflect which brokerage will hold the funds. It is also recommended that this instruction be placed in the remarks section of the listing on the MLS® System.
Conflicts could create transaction brokerage
Should either the seller’s brokerage (or designated agent, if applicable) have a buyer-client who becomes interested in the co-listed property, the entire transaction becomes subject to transaction brokerage and must proceed accordingly. Learn more about Transaction Brokerage.
Scenario 2: When the brokerages practice different agency models
If a seller wishes to co-list their property with two brokerages that practice different agency models, the seller will be entering into agency with both brokerages and signing both a Seller Brokerage Agreement with the common law brokerage and a Seller Designated Brokerage Agreement with the designated agency brokerage.
The same addendum/schedule that is required in Scenario 1 also applies here. It must be clear to all parties which brokerages will be offering what services, and the duties, obligations and promises of each brokerage must be clearly outlined. Buyers and/or the buyer’s representatives will need to know which brokerage will hold trust funds prior to the preparation of an offer and that can be identified in the same way as in Scenario 1.
Finally, should the common law brokerage have a buyer-client who becomes interested in the co-listed property, the entire transaction becomes subject to transaction brokerage and must proceed accordingly. Learn more about Transaction Brokerage.