In the complex world of real estate, the mandate or assignment to sell a property represents one of the fundamental instruments that governs the relationship between the client and the agency. It defines the terms and conditions of the collaboration, providing transparency and clarity to both parties.
But what exactly does it mean to mandate a real estate agency? How to protect yourself when selling a house with agency? And what are the things to know before signing? In this article, we will explore everything you need to know about the real estate mandate.
What is the Real Estate Mandate?
It is a contract with a real estate agency through which a person, natural or legal, entrusts it to sell or rent a property. This agreement establishes not only the subject matter of the sale or lease, but also the conditions, terms and fees. It is, in essence, a covenant of trust: the client entrusts the agency to handle one of the most important transactions of his or her life, while the agency agrees to act in the client’s best interest.
Types of Mandate
When discussing real estate mandates, it is essential to understand that there are different types, each with its own specificities.
The exclusive mandate is one of the most common agreements in the real estate industry. With this type of mandate, the client agrees not to entrust the sale or rental of the property to any other intermediary for the duration of the agreement. In return, the agency commits resources and time to promote the property, ensuring greater visibility and, often, faster results. This type of mandate is particularly popular with agencies, as they can invest in promoting the property knowing that they have exclusivity.
Opting for an exclusive mandate with a real estate agency thus offers numerous advantages. It means that the agency devotes all its energy and expertise to selling or renting your property. This involves a customized marketing strategy, constant engagement, and a direct communication channel between client and agency. Exclusivity ensures that both you and the agency have a common goal: to close the deal as quickly as possible and under the best conditions.
Unlike the exclusive mandate, the non-exclusive mandate allows the client to entrust the sale or rental of the property to several agencies at the same time. This may seem beneficial to the client, as it increases the chances of finding a buyer or tenant quickly. However, it is important to note that agencies may be less inclined to invest significant resources in promoting a property if they know they have to compete with other agencies.
There are, of course, pros and cons to opting for a nonexclusive real estate mandate. Among the advantages, there is undoubtedly the increased visibility of the property as more agencies work on its promotion. This could translate into a larger flow of potential buyers or tenants. In addition, the client has the flexibility to collaborate with different agencies and benefit from different marketing strategies.
However, among the disadvantages is the risk of less targeted and personalized promotion. Agencies, knowing that they do not have exclusivity, may not put as much effort or may not devote the same resources to your property as they would to an exclusive mandate. This could extend the time to sell or rent and, in some cases, could lead to less economically advantageous proposals.
The qualified mandate is positioned as an intermediate solution between the exclusive and nonexclusive mandate, offering a balance between the two options. In this mode, the client decides to entrust the sale or rental of the property to a specific agency, granting it priority in the search for potential buyers or tenants.
However, a distinguishing feature of the qualified mandate is the flexibility it offers the client: he or she retains the freedom to search for a buyer or tenant independently. If the client is successful in his or her independent research and closes a deal without the agency’s intervention, he or she will not be required to pay the expected commission.
This option ensures, on the one hand, a commitment on the part of the agency, and on the other hand, leaves open the possibility for the client to act independently, offering greater flexibility and potential cost savings.
Duration and Validity of the Mandate
The duration of the real estate mandate is one of the key aspects to consider when signing an agreement with an agency. Usually, the duration is stipulated in the contract and can vary according to the needs of the parties. However, it is common to have mandates that last three to six months, although in some cases they may be automatically renewed if not revoked.
It is important to read carefully the clauses on term and termination of the mandate. In some contracts, there may be penalties or costs associated with early termination of the mandate. If, for any reason, you wish to terminate the agreement before its natural expiration date, it is essential to notify the agency in writing, complying with any terms and conditions set forth in the agreement.
Rights and Duties of the Parties
The real estate mandate, being a contract, establishes rights and duties for both the agency and the client.
For the agency, the main duty is to act in the client’s best interest, promoting the property and trying to conclude the sale or lease on the best possible terms. The agency also has a duty to inform the client about any offer received and to maintain confidentiality about the information provided by the client.
On the other hand, the client has a duty to provide the agency with all necessary information about the property and not to take any actions that may hinder the sale or rental. In addition, if the mandate is exclusive, the client has a duty not to entrust the property to other agencies for the duration of the agreement.
Commissions and Associated Costs
One of the most sensitive and often a source of questions from clients concerns the fees and costs associated with the real estate mandate. When entrusting a property to an agency, it is essential to have clarity about how much you will have to pay and under what circumstances.
Commissions are generally a percentage of the sale or rental price of the property and are paid when the deal is closed. The percentage varies by agency and geographic area, but is usually between 2 percent and 5 percent for sales and 10 percent to 20 percent for rentals. It is important to note that the commission is due only if the agency succeeds in closing the sale or rental of the property.
In addition to fees, there may be other costs to consider. For example, some agencies may charge a fee for promoting the property on certain advertising channels or for conducting professional photo shoots. These costs, if any, should be clearly stated in the mandate contract.
What to Consider Before Signing a Mandate
Signing a real estate mandate is a serious commitment and, as such, requires thorough thought. Before putting your signature, it is critical to carefully evaluate the agency you are entering into an agreement with. Check its reputation, ask for references , and, if possible, talk to other clients to get an idea of their experience.
Also, read each clause of the contract carefully. Make sure you understand all terms, conditions, and any associated costs. If there are parts of the contract that are unclear to you, do not hesitate to ask the agency for an explanation or consult a lawyer.
In the course of working with a real estate agency, disagreements or misunderstandings may arise. If this happens, it is essential to deal with the situation calmly and professionally. Open and honest communication is the key to solving most problems.
However, if the parties cannot find an amicable solution, they may have to resort to legal or mediation channels. Many mandate contracts have dispute resolution clauses that set out the procedures to be followed in case of disagreement. It is important to be aware of these clauses and follow them carefully to ensure a fair and timely resolution of disputes.
Real estate agency mandate: the importance of informed and transparent collaboration
The real estate mandate is the basis of cooperation between client and agency. Being a contract, it establishes rights and obligations for both parties and ensures that the sale or rental of the property is done in a transparent and professional manner. Before signing a mandate, it is essential to inform yourself, carefully evaluate the agency, and read each clause of the contract. This is the only way to ensure fruitful and mutually satisfactory cooperation.
If you are considering selling or renting a property and would like professional and transparent service, please do not hesitate to contact us . Your peace of mind and satisfaction is our priority. Act now and start your real estate journey with the right partnership!
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