The Truth About Broker Participation
As a licensed real estate professional, you can be paid if you bring a buyer to an auction.
Broker Participation is the term used when an Auction Company will allow outside Brokers / Agents to bring their clients to an auction and get a referral fee paid for doing so.
For the most part, auctions are designed to have the auctioneer represent the seller. It is not required or needed that a buyer has their own broker to represent them when buying at auction.
At auction, the terms are set forth prior to the sale and all potential bidders must agree to the terms prior to bidding. There are no negotiations outside of the transaction.
If you are a licensed Real Estate Professional - You Can Be Paid For Bringing A Buyer!
here is what you should know.
You may be required to attend the auction with your client. You are expected to be the procuring cause for your client to know about the auction.
As with all transactions - you are to perform due diligence for your client. This would be providing a CMA or tracking down any information your client deems important.
You may be required to submit an opening Bid.
Broker Participation At Auction May Result in a % of the sales price, or just a flat fee.
Why Broker Participation Is Not Offered
• Commissions may already be split with a referring broker on the sale of the property.
• The portion of the commission usually set aside for cooperating broker may be used for marketing or other parts of the auction.
• I've had some Some sellers feel that if their property has been previously listed; all potential brokers had the opportunity to procure a buyer for the sale of the home during the period it was listed before the auction.
• At an absolute auction, there is a guaranteed sale. Most buyers will attend the auction if they are truly interested.
The intent is for you to bring your clients that you have been working with - and be compensated if they are the winning bidder.
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