THE RIGHT TO SELL AGREEMENT
The right to sell agreement, also known in France as the “sales mandate,” can frame the relationship between the seller of a property and their real estate agent. Since the Hoguet Law of 1970, the right to sell agreement is mandatory when hiring a real estate agency. It must be signed before your property goes on the market.
- What are the different types of sales mandate?
- Simple Right - you're allowed to seek help from multiple agencies as well as sell the property on your own.
- Exclusive Right - the agency you hired is the only one authorized to process the real estate sale and can list through multiple listing services so the agency is your main contact.
- Semi-Exclusive Right - the agency you hired is the only professional entity authorized with the sale but you, as the seller and/or owner, reserve the right to sell it on your own too.
- Co-Exclusive Right - only a small number of agencies are authorized to help with the real estate sale.
What is the simple mandate?
The simple mandate is more flexible than the exclusive mandate, it allows you to make a sale directly or deal with several agencies all without commission.
There remains a contract signed between the owner and the real estate professional giving him the authorization to broadcast ads of the property on the markets, to find potential buyers and then to put them in touch with the seller.
It has the advantage of not forcing you to deal with only one agency. This is a great advantage for the owner because it will allow him to reach a greater number of buyers by making the announcement of the sale of his property more widely disseminated.
The seller through this mandate can also and has the right to broadcast by himself the announcement of his property and therefore to make a direct sale with the buyer and is therefore exempt from agency fees.
BENEFITS
The main advantage is that by opting for a simple mandate you can technically reach a larger number of potential buyers. It is indeed all the agencies entrusted with the simple mandate that will be responsible for finding the buyers. Among these proposed buyers you will have a freedom of size, since not committed exclusively to an agency, you will retain the possibility of selling to the buyer of your choice.
DISADVANTAGES
Because the property is visible in multiple windows of real estate agencies, this represents a risk that can be penalizing by sending a negative image to potential buyers. They might understand that your property is struggling to sell. Being likely to find a buyer on your own can possibly also dissuade the real estate agent from fully investing in the sale of your property. In contrast to the point of view of the professional, the individual, during his research, finds your property and realizes that the selling price associated with your property differs depending on the agency or site visited.
What is the exclusive mandate?
The exclusive mandate represents a more important constraint, in return it generally allows a more efficient and faster sale compared to a sale under a simple mandate. Exclusive properties are most often signed in less than 3 months, while for comparison, in the case of a simple mandate, the time between the signing of the mandate and the sale is approximately double, 6 months.
BENEFITS
The real advantage of the exclusive mandate lies in a high and assured involvement on the part of the real estate agent. The latter doing his utmost to complete the transaction as quickly as possible and at the most attractive price, allowing him to receive, in passing, his commission. The second advantage, remaining not negligible, consists in the valuation of your property by its rarity on the market.
DISADVANTAGES
The signature of the exclusive mandate to a single agency gives an impression of loss of control and total freedom over the sale of the property. Agencies can be criticized for relying on their achievements once the exclusive mandate is signed, instead of rushing to find a buyer. This makes it possible to realize the mistake of having bet on the wrong structure, the real estate agency being less efficient than expected ... As the minimum duration of the exclusive mandate is three months, it would be impossible for you to use another agency or sell to a buyer on your own.
2. What are the tasks of the agent?
Upon hiring a real estate agent and signing a sales mandate with them, they will accomplish various tasks needed for the completion of your real estate sale. They include:
- Looking for prospective buyers
- Marketing the property for sale
- Listing description and photos
- Arranging and scheduling viewings
- Vetting prospective buyers
- Negotiating the best offer from prospective buyers
- Giving administrative support through the sale
- Completing administrative formalities related to the sale
- Advising on real estate transactions and procedures
- Accompanying until the signing of the deed of sale at the notary
3. How much does a right to sell agreement cost?
The sales mandate does not incur any signing fees. The only remuneration concerns agency fees only in the event of an actual real estate sale which on average agency fees are about 5% in Paris.
*If you are interested check out our fees here at A1 Real Estate.
4. What documents do I need to provide?
- A photo ID,
- Certificate or title deed
- Civil status record of the owners
- A copy of the property tax
- Certificate of living space
- A maintenance certificates
- 4 last quarterly statements of charges + last annual statement of expenses
- Co-ownership regulations (if applicable)
- 3 last Minutes of General Meetings + convening of the last General Assembly
- Plans
- Annual boiler, chimney sweep, and skeptical tank maintenance certificates
- Certificate of conformity (if the property is less than 30 years old)
- K-Bis extract and the articles of association (if you are a business owner)
If the apartment was previously rented:
- Copy of the lease
- Copy of the outgoing inventory
- Tenant's departure (i.e. notice of termination of lease)
- The latest meter readings (gas, electricity, and water)
Mandatory Surveys Technical Diagnostics, which should include:
- Energy Performance Diagnosis (EPD)
- The finding of risk of exposure to lead (CREP)
- Copy of the statement mentioning the presence or absence of asbestos
- Condition of the indoor electricity installation (if the installation is more than 15 years old)
- Status of the indoor gas installation (if the installation is more than 15 years old)
- State of risks and pollution (i.e. natural, mining, technological, seismic, radon, etc.)
- Noise Diagnosis
Important Note: ensure that the technical diagnostics are still valid. If not, you'll need to have these surveys done again and get valid certificates/documents.
- The Right to Sell Agreement is also known as the Sales Mandate.
- This agreement frames the partnership between the owner/seller and the real estate agency as an intermediary.
- There are 4 types of sales mandates in France: simple right, exclusive right, semi-exclusive right, and co-exclusive right.
- Make sure the mandatory surveys or Technical Diagnostics are still valid.