Delegation of Mandate Between Real Estate Agencies: Selling
Delegating mandates between real estate agencies is a strategic tool that allows one agency to entrust the marketing of a property to another, while maintaining the relationship with the client/owner. This mechanism is particularly relevant for luxury properties or in geographical areas where an agency may not have the necessary expertise or market reach to sell effectively.
What is a Delegation of Mandate?
Delegation of mandate involves a delegating agency entrusting a delegated agency with the right to sell or rent a property on behalf of the owner. This practice allows the delegating agency to benefit from the network, expertise, or geographic coverage of another agency, while retaining the rights related to the overall management of the transaction. Crucially, even when delegated, the responsibility towards the owner remains entirely with the delegating agency—the delegation shares the marketing efforts, but never the legal responsibility.
The Functioning of the Delegation
The Signing of the Contract
It all starts with the signing of a contract between the two agencies, specifying the duration of the delegation, the missions entrusted to the delegated agency, the sharing of fees and the respective obligations of each party.
The Obligations of the Delegating Agency
The delegating agency maintains the relationship with the owner and remains responsible for the administrative management of the mandate. It remains the owner's primary contact, even though the delegated agency is actually handling the marketing of the property.
The Obligations of the Delegated Agency
The delegated agency handles the promotion of the property, the management of viewings, and the negotiation of offers, using its own communication resources and network. However, it must strictly adhere to the conditions stipulated in the delegation agreement, particularly regarding fees, information to be provided to the client, and confidentiality.
Fee Sharing
The question of fee sharing remains central to any delegation. Commissions are generally divided between the two agencies according to the terms defined in the contract — in equal shares, or proportionally to each agency's involvement in the sales or rental process.
Monitoring and Reporting
Although the marketing is handled by the delegated agency, the delegating agency must continue to regularly monitor the progress of the case: reporting to the owner, providing information on visits made, and presenting offers received.
Advantages for the Delegating Agency
Delegating a mandate allows you to expand the visibility of a property without having to invest in a market or geographic area where you don't have a strong network—for example, an urban agency can delegate a property located in a rural area or a remote region. This practice also allows you to leverage the specific expertise of another agency, particularly for luxury or unique properties, while freeing up time to focus on other aspects of your business.
Advantages for the Delegated Agency
The delegated agency expands its portfolio of properties to market, a particularly valuable asset if it specializes in certain types of properties or regions. It also receives a share of the fees generated by the sale or rental, according to the agreed-upon allocation, and strengthens its professional network and visibility, especially when the delegating agency enjoys a solid reputation.
Advantages for the Owner
The owner benefits from increased visibility for their property, as several agencies are involved in its marketing, which naturally increases the chances of finding a buyer or tenant quickly. They also benefit from the specific expertise of the delegated agency if it specializes in the type of property in question. Finally, despite the involvement of multiple agencies in the process, they only have a single point of contact for managing the transaction, which significantly simplifies communication.
Should the Owner of the Delegation be Informed?
Although the delegation is negotiated between agencies, the question of informing the property owner remains crucial. In principle, it is preferable for the owner to be kept informed of this delegation in order to establish a relationship of transparency and trust with the delegating agency. However, the way this information is communicated varies according to each agency's practices: some systematically inform their clients from the outset, while others consider it more a matter of internal organization than essential information to be shared.
A Strategic Practice in Service of Sales
Delegating mandates between real estate agencies remains a common and strategic practice, maximizing the chances of selling or renting a property while optimizing the resources of each agency involved. Whether it's covering a specific geographic area, leveraging particular expertise, or increasing a property's visibility, this solution benefits all stakeholders. A thorough understanding of how it works and adherence to best practices for collaboration remain key to lasting partnerships between real estate professionals.