Understanding different Real Estate Mandates

When deciding to sell or buy a property, choosing the right mandate is a crucial step. The real estate mandate is the contract that binds the seller (or the buyer in the case of a search mandate) to the real estate agent, thereby defining the level of commitment and responsibilities of each party. In this article, we will explore the different types of real estate mandates, focusing on the simple, semi-exclusive, and exclusive mandates, as well as the search mandate for buyers.

The simple mandate is often seen as the most flexible solution for the seller, as it allows them to entrust the sale of their property to several real estate agencies and even to sell it themselves without paying an agency commission. However, this practice carries a risk: when multiple agencies present the same property, it can create the impression of a "difficult-to-sell property" and may even discourage some potential buyers. Moreover, agents invest less effort in promoting the property, as they have no guarantee of completing the transaction.

The semi-exclusive mandate is a compromise between the simple and exclusive mandates. In this case, the seller entrusts the sale of the property to a single agency but retains the right to sell it independently without paying a commission to the agency. This allows the real estate agent to work with more commitment while offering some flexibility to the seller. The semi-exclusive mandate is often recommended for sellers who want the agency’s investment while retaining the option to find a buyer on their own.

The exclusive mandate is the most engaging option for the owner, as it grants a single agency exclusive rights to sell the property. Under this mandate, only the assigned agent can manage viewings, advertising, and negotiations. For agencies, an exclusive mandate is often seen as a sign of trust and partnership, encouraging them to invest more in promoting the property and implementing effective sales strategies. Although it may seem restrictive for the seller, this mandate often results in a faster sale at a more favorable price, as the agent is fully committed.

A search mandate is a contract signed by a potential buyer to appoint a real estate agent to find a property that meets specific criteria. This type of mandate is particularly useful for people looking for a specific property or those who do not have the time to conduct their own search. A search mandate can be simple or exclusive, similar to those for sellers. Generally, the agent commits to finding the best options on the market and is compensated if the transaction is successful. This mandate provides buyers with personalized support and ensures an efficient and targeted search.

The duration of a real estate mandate is generally set between three and six months, although extensions are often possible in agreement with the agency. If the seller or buyer wishes to terminate the mandate before its term, they must follow specific procedures, often outlined in the contract. Usually, after an initial commitment period of three months, the mandate can be terminated with a fifteen-day notice. It is essential to understand these conditions when signing the mandate to avoid any inconveniences during the contract.

The choice of mandate mainly depends on the priorities and expectations of the seller or buyer. While some sellers believe that a simple mandate offers more freedom and visibility by involving multiple agencies, it’s important to remember that an exclusive mandate can also offer significant flexibility while optimizing the property’s presentation. Sellers seeking personalized support and targeted sales strategies often benefit from a semi-exclusive or exclusive mandate, allowing the agent to fully invest in promoting the property.

For buyers, the search mandate is particularly suitable when they have specific criteria or lack the time to explore the market. Ultimately, the chosen type of mandate should align with the unique needs and goals of each real estate project to maximize the chances of success.