ONE-AWAY BROKERS: OKAY OR NOT?

Here's one of the most controversial topics in real estate: Will you entertain one-away brokers?

Typically, two brokers work on a transaction: the listing broker and the buyer's/tenant's broker. However, in the Philippines, there can be more brokers involved in a transaction. These additional brokers are called "one-away" brokers, meaning they are one broker away from the client. In some cases, there can be as many as ten brokers in a single transaction.

Now for the poll: If you are the listing broker, do you or are you willing to entertain one-away brokers?

Option 1: Yes

Option 2: No

Option 3: It depends

Note: I'm not here to tell you whether one-away deals are right or wrong. Instead, I will highlight the pros and cons of such transactions.

Poll Results:

14% are okay with one-away deals.

33% are NOT okay.

53% said it depends.

Acronyms

SB: Seller's Broker

MB/OAB: Middle Broker/One-Away Broker

BB: Buyer's Broker

Pros and Cons of One-Away Transactions

Pros:

Extended Reach: More brokers can be reached quickly.

Increased Opportunities: Brokers with fewer listings can participate in more deals.

Cons:

Commission Split: MB takes 20% of the commission for relaying messages.

Distorted Information: Messages can be altered by the time they reach the client.

Negative Perception: MBs are often avoided due to the "one-away" stigma.

Some brokers falsely claim to be an OAB to secure a larger commission share–which is an unethical practice.

Personal Experience with OABs

Generally, I avoid OABs due to past negative experiences:

Lack of Communication: In one transaction, the MB didn’t relay crucial information to the BB. At closing, the buyer was blindsided, leading to a heated exchange and a failed deal, despite my clear communication with the MB the night before.

Last-Minute Issues: In another deal involving three MBs (five brokers total), closing documents were circulated weeks in advance. On closing day, an MB tried to impress the Buyer and raised issues, nearly derailing the deal.

These experiences taught me to be cautious with OABs. However, I made an exception in a recent transaction:

I had a prime listing marketed by only two other prominent brokers. An OAB wanted to present the listing to a BB. I agreed, with the condition that I communicate directly with the BB. The OAB consented, knowing they could turn to the other brokers if I declined. This turned into a direct transaction, with the OAB receiving a referral fee. Problem solved.

Tips

Direct Communication: If you entertain OABs, ensure you communicate directly with the BB to avoid misunderstandings.

Limited Use: If you want to be an OAB, use this role sparingly, as it can damage your reputation.

Offer Additional Services: As an OAB, offer to handle tasks like documentation to justify your commission share. NEVER be part of the negotiations.