WHAT'S "CO-BROKE" AND WHY IT SHOULDN'T MATTER TO YOU AS A BUYER
In a nutshell, "co-broke" is the amount of compensation the buyer agent receives in order to sell you a home (please be advised that this pertains to Florida and Highlands County in particular).
At the time of listing, the listing agent and the seller agree upon the amount of money the listing agent is to receive at the time of closing. The amount , called commission, is usually a percentage of the final sale price. The commission is part of the listing agreement. In order to put a listing in the MLS, the listing agent has to offer a share of his or her commission to the agent that ends up selling the home (buyer agent, selling agent etc.). This is called "co-broke". Co-broke is usually a percentage amount of the total commission the listing agent receives: Example: the listing agent receives 6% and offers the selling agent 3%. It's a 50/50 split but it doesn't have to be. The listing agent doesn't state his own commission but has to input in the MLS how much co-broke is being offered for the listing.
Your buyer agent is being paid out of the listing agent's commission. The amount does vary depending on the co-broke being offered and the final sale price.
So, let's say you are looking for a 2 bedroom, 2 bathroom, 2 car garage home in a golfing community in Sebring. Your price range is $100,000 to $150,000. The home shouldn't be older than 10 years and you would prefer golf course view but it's not a "must".
We will search the MLS using the following criteria: Sebring, 2 bedroom, 2 bathroom, 2 car garage, $100,000 - $150,000, built after 1999, golf course frontage yes and no, and we will add the legal description of all golfing communities in Sebring. This results in a list of homes that meet all your wants and needs. Together, we will now eliminate all the homes that are not of interest to you. Once you have found several homes that you would like to view, we contact the listing office and make arrangements for a private showing at your convenience. At that point in time, we also to begin to evaluate the asking price on these homes to help you make an informed decision when it comes time to write an offer. We don't want you to pay more than you have to.
The amount of co-broke being offered for each individual listing is NOT a criteria we use when we initially search the MLS for you. We do not withhold any listings from you because it is listed with another office or because the co-broke is not high enough. We don't withhold any listings from you, period.
Even though you know now what "co-broke" is, it shouldn't matter to you and most importantly, it shouldn't matter to your agent either!
ON EDIT: to clarify, my point is that no buyer agent should withhold listings from their clients because the co-broke doesn't fit the buyer agent's needs. It happens all the time and the buyer doesn't even get the change to offer up the difference as posted in the replies below.
If you are looking to purchase real estate in Highlands County and would like to have access to ALL listings, regardless of the co-broke, give us a call!
Andrea of Darrin & Andrea Mills
ERA Advantage Realty