Co-brokerage (co-broke)

Definition

Two brokers splitting one commission, each having brought a side.

Why It Matters

It is one way a buyer's representative gets paid, and it decides who your broker actually works for. In a co-broke your representative is paid out of the seller's commission, so their fee exists only if you close and only at whatever price closes. That is not a reason to avoid them, and it is a reason to ask the question directly: who pays you, and what happens to your fee if I walk away. A buy-side advisor paid a flat fee by you has a different set of incentives, and both arrangements are legitimate as long as you know which one you are in.

In numbers: An 8% fee on a $4 million sale is $320,000, and an even co-broke books $160,000 to each firm.