Termination of a real estate agency is a decision that may arise when entrusting the sale or rental of a property to an agency. This choice stems from a relationship based on trust and expectations, but, as in any relationship, situations may arise that lead to reconsideration of that decision.

Whether it is due to a change of plans, a dissatisfaction for the service received, or to the desire to undertake a different direction, it is critical to understand that terminating a contract with a real estate agency-also known as a real estate mandate-is a viable option that needs to be handled carefully and consciously.

Let’s find out together what a real estate sales assignment is, the reasons and tips for ending the relationship easily and without misunderstanding.

Tips on how to handle real estate agency assignment termination

What is commissioning for a real estate agency?

Before delving into the heart of the matter, which is the termination of tenure, it is essential to have a good understanding of what a real estate tenure is and what its various forms are. The mandate is, in essence, an agreement between you and the real estate agency that sets out the terms under which the agency will act to sell or rent your property. It can take many forms, each with its own specificities.

The exclusive assignment is a bit like a relationship: it binds you to a single agency, which becomes the only intermediary authorized to handle the sale or rental of your property. This type of assignment often promises deeper commitment and more personalized services, but it also requires solid mutual trust.

Non-exclusive assignment, on the other hand, is a bit more open, allowing you to work with multiple agencies at the same time. It’s kind of like going out on dates with multiple people, hoping to find the right one that suits you.

The direct sales assignment allows you to get in on the action as well: you can look for buyers on your own, while retaining the option to sell through the agency. It’s kind of like having your foot in two shoes while maintaining some autonomy in the process.

Understanding the terms of your mandate is crucial, because each type has its own rules of the game, especially when it comes to terminating the agreement. Before you sign, it’s like reading the rules before you start a game: make sure you know what you’re getting into, to avoid surprises along the way.

Want to learn more about what is real estate commissioning? Read this guide with everything you need to know about the real estate mandate.

How long is the tenure for a real estate agency and what are the constraints?

The duration of the assignment given to a real estate agency and the constraints associated with it are key elements that every owner should carefully consider before signing a contract. Typically,the duration of a mandate can vary significantly, often extending from a few months up to a year, depending on the agreements between the parties and the type of mandate chosen, whether exclusive or nonexclusive.

At the end of the tenure, special considerations emerge regarding potential buyers who visited the property or were offered it during the agency’s tenure. In many exclusive mandate contracts, there is a clause stating that if the property is sold to one of these clients within a certain period after the expiration of the mandate-typically one year-the agency is still entitled to the agreed commission. This means that the agency is required to compile a list of the names of clients who have been offered the property, and the current owner, for a period of time after the expiration of the mandate, remains bound to the agency with regard to these potential buyers.

Common reasons for termination of appointment

It happens to everyone, sooner or later, to have second thoughts. In the world of real estate business, this moment can come when you realize that the assignment with your agency is not bearing the desired fruit. Reasons for wanting to terminate a real estate sales mandate can be varied and often reflect not only market dynamics, but also personal and professional relationships.

Unsatisfactory results

Sometimes, the decision to terminate stems from disappointment in the agency’s performance. Perhaps visits are few and sporadic, or marketing strategies seem not to take off. In other cases, you may feel like your property is not getting the attention it deserves, relegated to the bottom of the agency catalog.

Changes in plans

Life is unpredictable. Personal or professional changes may cause you to revise your plans for selling or renting. Perhaps you have decided to stop selling your home or need to take it off the market temporarily for any reason, from needing to make renovations to suddenly needing to use it.

Finding a better match

Sometimes you simply find that there is another agency that seems more in line with your needs or that offers you more advantageous terms. The housing market is vast and the options are many, so it is natural to want to explore different avenues to get the best possible result.

There is no chemistry

Do not underestimate the importance of good communication and a trusting relationship with your agency. If you feel that the chemistry is not there, that your requests are not being heard, or that the proposed strategies are not in line with your expectations, it may be time to consider other options.

Read the warrant agreement before termination

Before making any move, it is essential to pull out of the “Important Documents” folder that contract you signed at the beginning of your adventure with the real estate agency. Yes, the very one you may not have read in detail while your attention was focused on other tasks and commitments. This document is invaluable; it contains basic guidance on how to navigate the sometimes turbulent waters of assignment termination.

Read the contract carefully

Contracts can be boring, we know, but in this case, the devil is really in the details. Look for cancellation clauses: are there specific terms to be met? Is there a notice period? Are there any penalties to consider? This information is crucial to understanding how to proceed without running into unpleasant surprises.

Is there a notice period?

Many contracts require a notice period before termination becomes effective. Make sure you know these terms to avoid finding yourself in an awkward situation where you thought you were free to go your own way, but the warrant agreement says otherwise.

Are there any penalties in terminating the assignment?

Some assignments have penalties for early termination. These can vary greatly and influence your decision. Carefully consider whether termination is worth the potential cost and consider whether there are ways to negotiate or reduce these penalties.

Consult a professional

If the contract seems more complicated than expected or if you have doubts about how to proceed, it may be time to call a professional. Legal counsel or a new real estate agent can offer you an outside perspective and advise you on the best course of action.

How to proceed with cancellation

After carefully rereading the contract and weighing your decision, it is time to formally communicate your intention to terminate your engagement with the real estate agency. This step, although it may seem daunting, is crucial to ensure that the transition goes smoothly and without misunderstanding. The key here is clarity and professionalism: although emotions are hard to ignore, especially if the decision stems from dissatisfaction, it is important to maintain a professional approach to preserve relationships and ensure a successful conclusion for both parties.

Begin by drafting a termination letter in which you clearly state your decision to terminate the assignment, citing the relevant contract terms and adhering to the agreed-upon notice period. It is good practice to include the reasons for termination in the letter, especially if there were specific problems that the agency could improve in the future; however, try to do so in a constructive and non-accusatory manner.

Once the letter is drafted, send it via a method that provides you with a receipt or confirmation of delivery, such as registered mail with return receipt or certified mail. This step is not just a bureaucratic formality, but serves to protect both parties by providing documented proof of communication.

After sending the letter, an in-person meeting or call may be necessary to discuss the practical details of the termination, such as dealing with still-scheduled visits or ending ongoing negotiations. Approach these discussions with openness and flexibility, seeking solutions that are fair to both sides.

What happens after the termination of the assignment?

After formally communicating your decision to terminate the mandate with the real estate agency, it is time to address and manage the practical consequences of this choice. This phase requires attention to detail and a good deal of diplomacy, as you may have to navigate between open issues and existing commitments.

First, consider any remaining obligations or open issues with the agency. If there are visits to the property already planned or ongoing negotiations with potential buyers introduced by the agency, it is important to handle these situations with care. Discuss openly with the agency how to proceed so that both parties are satisfied with the outcome. In some cases, it may be appropriate to allow these activities to be completed, especially if they could lead to the sale of the property.

Next, think about how to proceed with the sale of your property after the termination of the assignment. You may decide to engage another real estate agency, perhaps after conducting further research to find the one that best aligns with your needs and expectations. Alternatively, you might consider private sale, if you feel prepared to handle the process directly. Each option has its own advantages and requires a different set of preparations and considerations.

Finally, take a moment to reflect on your experience with your previous agency. Analyze what worked and what didn’t, and use this information to improve your sales strategy in the future. Perhaps there were misunderstandings that could be avoided in the future or expectations that were not fully aligned that could be clarified at the beginning of a new collaboration!