The Pitfalls and Pressures of Working in Conjunction with Other Commercial Real Estate Agents

When you are considering working with other agents as part of a conjunction process on any particular listing, there are weaknesses to be aware of in the business relationship.  Some conjunction agents do not work as hard as others when it comes to processing and completing the transaction, yet they will want a commission for their involvement.  The commissions paid to each agent should reflect the work required in each case and the commitment of the agent to completing the transaction.

You will get many approaches from other local agents if you have a quality listing to work with.  The agent that controls the listing stock will always control the transaction and the client.  It is preferable to be the listing agent in most if not all cases; when you control the listing stock you control the market.  It is then the situation that other agents will need to come to you with any potential buyers or tenants to arrange an inspection.

If you have just listed a property on an exclusive basis, and you regard the listing as being of high quality, there is no point in surrendering part of your commission in a conjunction transaction too early in your campaign.  As a general rule, keep other agents away from your exclusive property listing until such time as you have exhausted all direct opportunities and inquiries yourself.  Consider conjunction transactions much later in the campaign when all other opportunities have been explored.

Here are some rules to help you avoid the difficulties of working with other agents:

  1. If another agent is to introduce a buyer or tenant to your listing, ensure that you have not worked that buyer or tenant yourself at an earlier stage with any other property.  Keep good records when it comes to buyer and tenant inquiry.
  2. Don’t agree to any particular commission sharing arrangement until you understand that the introducing agent has a genuine inquiry that you have not worked previously.  Don’t give too much information to the other agent about the property until such time as you have established that they have a real and genuine inquiry for your listing.  Protect your client from unqualified buyers and tenants that are not fully matched to the property listing.
  3. Any conjunction arrangement should be established and agreed in writing between the listing agent and the introducing agent before you move ahead.  It stands to reason that the listing agent should have a valid and enforceable listing appointment as part of that process.  That appointment should be on an exclusive basis so that the listing agent can control the inquiry, the client, the inspection, and the negotiation.  The sharing of any commission between the listing agent and the introducing agent should be supported by a valid appointment to act, and a written conjunction agreement between the listing agent and the introducing agent.
  4. The inspection of the property should only occur when you have covered off on the previous points and are comfortable with the facts about the introducing agent and their parties.
  5. As the listing agent you should retain all connection and communication with the client as the owner of the property.  Don’t let the other introducing agent get involved with your client in any way or form.
  6. Make sure that your client is comfortable in accepting a conjunction agent into the transaction.  Some clients may have a distinct problem with certain other agents in your local area.  You client on that basis may not want the conjunction to move ahead.
  7. Insist on correct and legal documentation when it comes to the submission of offers through to you from the introducing agent.  Any offer should be submitted in writing to you as the agent for the client, together with the necessary deposits as evidence of commitment to the transaction by the buyer or the tenant.  Protect your client in the transaction.
  8. Advise your client quite clearly about market circumstances and market conditions before they start the negotiation.  As the listing agent it is your job to ensure that the client gets the best possible outcome for the property sale or lease as the case may be.  You can help them with the market intelligence and necessary updates to achieve a realistic price or rental.
  9. Maintain confidentiality for your client and qualify any other person that another agent may introduce to your listing.

So, the question is ‘Should you conjunct with other agents?’  The answer that you give should be centered on the best outcome for your client in both market price (and rent) and timing; only you know the facts with your client to solve that equation successfully.

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