beginning, short explanation:
As part of cooperation (cooperation) between intermediaries, It is customary for a broker representing a party to a transaction (seller / buyer) to cooperate with a broker representing the opposing party, In favor of closing a deal.
Why is the cooperation between the brokers good for the client?
Seller - This allows the seller (through his broker) to be exposed to a maximum of buyers.
Buyer - This allows the buyer (through his broker) to be exposed to maximum assets.
In a state of cooperation, The king's way is that each broker charges the commission from the client he represents, As agreed with him in the mediation agreement between them.
But a practice called "joint fund" is increasingly permeating the real estate industry in Israel, And may impair the effectiveness of the cooperative institution.
First we will explain what "common fund" means:
The brokers in the partnership agree that they will share equally in the total brokerage fees from the buyer and the seller. For example: an intermediary representing a seller has agreed with the seller on a commission of 1%, The broker representing the buyer agreed with the buyer on 2%, Then as part of an agreement between them on a "joint fund" the buyer's broker will transfer 0.5% To the mediator of the seller so that each of them will receive half of the joint commission, That is, in this example - one and a half percent.
Seemingly sounds logical. so that's it, That in terms of the good of the realtor it is not - I will explain this in the next post.