Understanding the Delegation of Mandate between Real Estate Agencies
In the real estate sector, the delegation of mandate is a strategic tool which allows a real estate agency to entrust the management of a property to another agency, while maintaining the relationship with the owner client. This mechanism is particularly relevant in the context of luxury real estate or in geographic areas where an agency may not have the expertise or coverage necessary to effectively promote a property. In this article, we will explore what delegation , how it works and why it can be a beneficial solution for real estate agencies as well as property owners .
What is Mandate Delegation?
The delegation of mandate is a practice which consists of a real estate agency, called delegating agency , entrusting to another agency, called delegated agency , the right to sell or rent real estate on behalf of the owner. This practice allows the delegating agency to benefit from the networks, expertise, or geographic coverage of another agency while retaining the rights linked to the management of the transaction.
It is essential to note that, even if the mandate is delegated, the delegating agency remains responsible towards the client who owns the property. Delegation does not transfer legal responsibility, but simply allows the marketing work to be shared.
How Does the Delegation of Mandate Between Agencies Work?
1. Signature of the Mandate
The delegation of mandate begins with the signing of a contract between the delegating agency and the delegated agency. This contract specifies the terms of the delegation: the duration, the missions of the delegated agency, the sharing of fees, and the obligations of both parties.
2. Obligations of the Delegating Agency
The delegating agency maintains the relationship with the owner and remains responsible for the administrative management of the mandate. She also remains the main contact for the owner, even if it is the delegated agency which takes care of the marketing of the property.
3. Obligations of the Delegated Agency
The delegated agency takes care of the promotion of the property, the management of visits, and the negotiation of offers. It can use its own means of communication, its networks or its tools to sell or rent the property. However, it must respect the conditions defined in the delegation contract, in particular the aspects concerning fees, the information to be transmitted to the client, and respect for confidentiality.
4. Fee Management
One of the main concerns when delegating a mandate is the question of sharing fees . Generally, fees are shared between the delegating agency and the delegated agency, depending on the conditions defined in the delegation contract. This distribution can be done equally or in proportion to the involvement of each agency in the sales or rental process.
5. Monitoring and Reporting
Although the delegated agency is responsible for marketing, the delegating agency must regularly monitor the progress of the file. This includes managing reporting to the property owner, information on visits carried out, and presentation of offers received.
Why is Mandate Delegation Advantageous?
1. For the Delegating Agency
Increase visibility and access to new markets
One of the main reasons why a real estate agency chooses to delegate a mandate is to extend the visibility of its property without having to invest in a market or geographical area in which it does not have a solid network. For example, an agency located in a large city may choose to delegate a mandate for a property located in a rural area or in a remote region where it does not have the necessary expertise.
Benefit from the skills of another agency
In some cases, a delegating agency may not have the expertise to manage a specific type of property. The delegation of mandate allows you to call on an agency that has particular skills in a sector or a type of property, such as luxury goods or atypical properties.
Save time
The delegation of mandate allows the delegating agency to concentrate on other aspects of its activity while ensuring that the marketing of the property is done effectively by another agency.
2. For the Delegated Agency
Increase your property portfolio
The delegated agency benefits from new properties to market, which allows it to expand its portfolio. This can be particularly beneficial if the agency specializes in certain property types or geographic regions.
Increase your commissions
By accepting a delegation of mandate, the delegated agency has the opportunity to receive a share of the fees generated by the sale or rental of the property. Depending on the distribution defined in the contract, the delegated agency can receive a significant commission.
Strengthen your network and reputation
Collaboration with another agency allows the delegated agency to strengthen its professional network and gain visibility, especially if the delegating agency is well established and recognized in the sector.
3. For the Property Owner
More visibility for his property
The owner of a property benefits from greater visibility, because several real estate agencies are responsible for marketing. The delegation of mandate increases the chances of finding a buyer or tenant more quickly.
Expertise and professionalism
By using a delegated agency specializing in a particular type of property, the owner can benefit from more tailored advice and more professional management of the transaction.
Simplified management
The owner only has one contact person to manage the transaction, even if there are several agencies involved in the sale or rental of his property. This simplifies exchanges and avoids any confusion.
Should the Owner of the Mandate Delegation be Informed?
Although the delegation of mandate takes place between agencies, the question of whether the owner of the property must be informed is crucial. In principle, it is important that the owner is aware of the delegation. This helps establish a relationship of transparency and trust between the delegating agency and the owner. However, how this information is transmitted depends on the practice of each agency. Some agencies prefer to inform their clients of the delegation up front, while others believe that this is not necessarily essential information for the owner.
The delegation of mandates between real estate agencies is a common and strategic practice which makes it possible to maximize the chances of selling or renting a property, while optimizing the agencies' resources. Whether to cover a specific geographic area, benefit from particular expertise or increase the visibility of a property, this solution offers numerous advantages for all parties involved: agencies and owners.
By understanding how this practice works and respecting good collaboration practices, it is possible to establish fruitful partnerships between agencies, which will benefit both clients and professionals in the real estate sector.
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Read our articles in this file Delegation of mandate between real estate agencies:
- Delegation of Mandate between Real Estate Agencies
Read the article - Understanding the Delegation of Real Estate Mandate between Agencies
Read the article - Why Delegate a Mandate to Another Real Estate Agency?
Read the article - The Legal Framework of the Real Estate Mandate Delegation
Read the article - The Advantages of Mandate Delegation for Agencies and Owners
Read the article - Should the Owner of the Mandate Delegation be Informed?
Read the article - How to Manage the Sharing of Fees in the Delegation of Mandate?
Read the article - How to Collaborate Well Between Agencies for a Successful Mandate Delegation?
Read the article - Mistakes to Avoid When Delegating Mandates Between Agencies
Read the article - Key tips for successful delegation of mandate
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These links will allow you to provide a complete and fluid reading on the subject of delegation of mandate between real estate agencies, covering all the essential aspects.
