THE RESEARCH MANDATE
Table of contents
1. What is the search mandate?
The search mandate is a type of contract wherein a buyer hires a real estate agency to help look for a property to rent or purchase.
Governed by the Hoguet Law of 1970 and the ALUR Law of 2014, this type of real estate mandate is closely associated with the sales mandate, though both are completely different. The search mandate is mostly about looking for a property to purchase while the sales mandate is when the owner delegates the power of their real estate sale to the professional agent.
The following must be specified in the mandate:
To protect the client, the mandate should also say that
Governed by the Hoguet Law of 1970 and the ALUR Law of 2014, this type of real estate mandate is closely associated with the sales mandate, though both are completely different. The search mandate is mostly about looking for a property to purchase while the sales mandate is when the owner delegates the power of their real estate sale to the professional agent.
The following must be specified in the mandate:
- The power conferred on the agent
- The conditions of the provision of the service
- The means mobilized
- The remuneration of services rendered
- All taxes included (TTC).
To protect the client, the mandate should also say that
- Payment will only be made once the agent succeeds in their objective.
- The agent must hold a professional card, guaranteeing a certain level of professionalism.
2. What does a research mandate commit us to?
On the side of the mandate (buyer):
On the side of the agent (real estate agent):
- The future buyer undertakes to pay the agency fees once the sale is set and completed.
- Once a property has been found and selected by the estate agent, in order not to pay a commission, it is forbidden to deal directly with the seller.
- If the search mandate is exclusive, the buyer is obliged to pay a commission (even if they find the property themselves).
On the side of the agent (real estate agent):
- After signing a search mandate, an agent has the obligation to offer properties that meet the client's requirements and specific criteria.
- They must be transparent and informative, constantly reporting to the buyer. In the event of a visit, the agent must not withhold any information that may be of interest to the buyer. If they fail to do so, they will be liable for damages.
3. What should a search warrant contain?
The search mandate should include:
- Identity of the buyer (name and surname, address, date of birth, civil status, etc.)
- Identity of the estate agent (name of the agent or agency, estate agent's card, civil liability insurance, company address, SIRET number, etc.)
- Full description of the property found. The more details there are, the more the estate agent will be able to filter the properties according to the client's request. It is important to include certain characteristics, such as :
- The location
- The number of rooms (and bathrooms)
- The condition of the property
- The facilities (heating, electricity)
- The view
- The neighborhood and private areas
- The building plot's constructibility
- The price of the property sought
- Remuneration conditions: this may be a percentage (the search mandate must communicate the value of the property) or a fixed commission. This makes it possible to know the amount to be paid before drawing up a sales document (i.e. preliminary sale agreement, the promise to sell, etc.)
- Duration of the mandate - 3 months irrevocable, with automatic renewal by one-month increments (until termination)
- Type of mandate (simple or exclusive)
4. What are the tasks of the trustee?
The buyer’s agent must present properties that meet the client's specific criteria, but will not be held responsible if the agent has not found the “perfect” property.
The agent is bound by the duty to inform and advise the buyer until the signing of the deed. In the event of a visit, the agent must not withhold any information that may be of interest to the buyer. If they fail to do so, they will be liable for damages.
Search for properties: monitor the advertisements published on professional and private portals, as well as estate agency websites.
Organize visits
Negotiating the price offer: the agent assists in negotiating the price and advises the buyer on drafting the price offer
Securing the purchase: securing the purchase up to the deed of sale by checking the details of the transaction (i.e. minutes of the general meeting of co-owners, co-ownership regulations, technical diagnoses, checking with the town planning authorities, etc.)
The agent is bound by the duty to inform and advise the buyer until the signing of the deed. In the event of a visit, the agent must not withhold any information that may be of interest to the buyer. If they fail to do so, they will be liable for damages.
- For Example: If you have bought a flat with an unobstructed view (an essential criterion), and a 10-story building is built a few months later and spoils the view. It is possible to make the real estate agent/agency accountable because this detail was not mentioned and validated in the mandate at the time of signing.
Search for properties: monitor the advertisements published on professional and private portals, as well as estate agency websites.
Organize visits
Negotiating the price offer: the agent assists in negotiating the price and advises the buyer on drafting the price offer
Securing the purchase: securing the purchase up to the deed of sale by checking the details of the transaction (i.e. minutes of the general meeting of co-owners, co-ownership regulations, technical diagnoses, checking with the town planning authorities, etc.)
5. What are the different types of research mandate?
There are two types of search mandates:
Exclusive Search Mandate: the hired estate agent is the only one to carry out the search and organize visits. And if the client finds the property on their own (or if someone offers them a property during the mandate), all the information must be passed on to the agent so that they can take over the purchasing process.
Simple Search Mandate: this allows the client to search on their own in parallel with the agent, or to mandate one or more other professionals at the same time.