What is co-broke ratio

In the context of Singapore real estate, a "co-broke" or "co-broking" refers to the practice where two agents, typically one representing the buyer and the other representing the seller, collaborate to broker a deal and share the commission.

Key Points of Co-Broking:

- Commission Collection: Under the new best practice guide adopted by major property agencies in Singapore, agents are strongly encouraged to collect commissions directly from the party they represent. For example, the seller's agent collects from the seller, and the buyer's agent collects from the buyer.

- Co-Broking Agreement: If clients opt not to cover their agent’s commission, agents can request a co-brokerage fee from the opposing party’s agent. This requires a formal co-broking agreement to ensure the sharing of commissions is transparent and agreed upon.

- Prohibition on Dual Commissions: Agents are strictly prohibited from receiving commissions from both the buyer and seller in a single transaction to maintain impartiality and integrity.

Co-Broke Ratio:

The term "co-broke ratio" is not explicitly defined in the current guidelines, but it generally refers to the proportion of the commission that each agent receives in a co-broking arrangement. Here’s how it typically works:

- Sharing Commissions: When agents agree to co-broke, they usually split the commission according to a pre-agreed ratio. For instance, if the total commission is 2% of the sale price, the buyer’s agent and the seller’s agent might split it equally (1% each) or according to some other agreed ratio.

- Transparency and Agreement: The co-broking agreement ensures that the commission split is clear and agreed upon by both parties, promoting transparency and fairness in the transaction.

In summary, the co-broke ratio is essentially the agreed-upon percentage of the total commission that each agent will receive in a co-broking arrangement, ensuring a fair and transparent distribution of fees.