What is a sales mandate? Definition & advice

The real estate mandate is a mandatory document when a person sells a property with the help of a real estate agency. There are four depending on the needs of the principal: purchase, sale, marketing or rental. We are interested here  in the sales mandate, which allows the owner of a property to benefit from the support of a real estate advisor in his sales project while enjoying the protection of a contract. Obligations, types of mandates and signatories… Find all our tips to understand how the sales mandate works.

Definition of sales mandate

The sales mandate is a contract that binds the owner of a property for sale and the real estate agent who undertakes to help him in this project. The sales mandate contains the precise terms of the commercial relationship between the two parties, including all the services provided by the agency. The signing of a sales mandate is necessary before any commitment with a real estate agency. It allows the selling owner to ensure that his real estate advisor will make every effort to support him in this sale project. There are 3 types: the simple mandate, the exclusive mandate and the semi-exclusive mandate.

What is the role of the sales mandate?

The sales mandate plays a fundamental role when the owner wishes to sell his property. This document frames all the services, as well as the financial relationship between the  principal, in other words the owner, and the agent, his real estate agent. This mandate has several roles, including protecting  the parties and ensuring that everyone respects the clauses of the contract during the sale procedure. It also makes it possible to put in writing all the actions carried out by the real estate agency in order to sell the property as soon as possible and at the price set by the mandate.

Is the sales mandate mandatory?

The sales mandate has been a mandatory document since the Hoguet law of 1972: “the real estate agent must hold a written mandate authorizing him to negotiate  or commit on behalf of the owner or lessor. This mandate must therefore be held prior to any act of mediation or negotiation.” Whether simple or exclusive, it must be signed by both parties before any real estate sale transaction.

The sales mandate is a bilateral agreement that commits as much as it protects the owner and the real estate advisor. If an agent agrees to sell without a warrant, he takes the risk of not receiving payment of his fees and may incur criminal penalties.

What are the obligations of the trustee?

In addition to the obligation to sign a sales mandate, the real estate agent must clearly include a certain amount of information.  It must include his fees, also called “agency fees”, a registration number of this mandate in the register of mandates of the agency as well as all the means he will implement to sell the property.

The real estate agent is bound to efficiency and transparency during the operation for which he is mandated. He must first check the principal’s information about the property for sale, including proof of ownership and ability to sell. If the property is in indecision, for example, he will have to check that all the heirs agree to sell. He must also be aware of the characteristics of the property and warn the buyer of problems that could affect his installation: asbestos, lead, termites, flood zone, etc.

Finally, he will have to know with certainty the use of the property for sale. He will not be able to sell a residential property if the purchaser intends to use it for commercial purposes. He will also be required to verify the financial capacity of the purchaser. The trustee is not only subject to an obligation of result by his mandate. He must be willing to inform and advise his principals, in their interest, throughout the proposed sale. Otherwise, it may be held liable.

The different types of sales mandate

There are 3 types of mandates that do not guarantee the same rights to the owner.

  • The exclusive mandate: the owner puts the entire sales project in the hands of the real estate agency. The latter is therefore the only one who can sell the property during the term of office. The trust between the owner and the agency must be total under penalty of setbacks. The mandate commits you. Thus, an owner can not sell the property by himself, without going through the agency. If you are ready to sign an exclusive mandate, keep in mind that the real estate advisor in charge of the sale has an obligation of result that conditions the commission he receives at the end of it. The mandate also allows you to free yourself from the constraints related to the sale by trusting your agent. You will have nothing more to do than sign a mandate, then a compromise and a deed of sale.
  • The simple mandate: the owner puts his property up for sale in several agencies, so he does not have an exclusive contract, but a simple mandate with each of them. He thus reserves the right to sell the property by his own means to an individual, without going through an agency. This more flexible option will allow you to keep an eye on the sale of your property while benefiting from the expertise of several real estate agencies.
  • The semi-exclusive mandate: the owner signs an exclusive contract with a single real estate agency, but he retains his right to sell his property himself to a third party, if it has not been presented to him by the agency.

How to write a sales mandate?

The sales mandate is subject by law to several obligations. A poorly drafted contract could lead to its nullity and thus break the commercial relationship between the owner and the real estate agent in charge of the sale. The document must contain the following information:

  • The identity of the real estate agent, i.e. his professional card number, the territorial chamber of commerce and industry that issued his professional card and the details of his financial guarantee.
  • The identity of the owner or, where applicable, of the co-owners if the mandate concerns a property forming part of a succession with several beneficiaries.
  • The description of the property involved, its address and description.
  • The purpose of the mandate: there are several types, including research or sale.
  • The duration of the mandate, since it will have to be systematically limited in time. In general, it is 3 months.
  • The price of the property, therefore its market value excluding agency fees. A price range may be specified in case of negotiation.
  • The remuneration of the real estate agent, which may appear in amount or percentage, as well as the designation of the party called upon to pay these costs (seller or buyer).
  • The means used by the real estate agent to carry out the sale or research, depending on the type of mandate.
  • The registration number in the register of mandates.

Obviously, the terms of reference must be approved and signed by both parties.

Who can sign a sales mandate?

A sales mandate is signed by the owner of the property for sale. In the particular case of an inheritance, if the property is in joint ownership, there may be several scenarios:

  • If all the rights holders agree to sell the property, they must all appear on the mandate and sign it. Their commitment is final.
  • If only one of the co-owners signs the mandate, the sale is possible on the sole condition that the other beneficiaries, who have not signed the mandate, give their agreement.
  • If at least one of them refuses the sale, the co-owner who signed the mandate may be required to compensate the agency or potential buyer.

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