The Importance of a Real Estate Listing Agreement

January 28, 2024 9-minute read

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L’importance du mandat de vente immobilier

You’re planning to sell your apartment, house, or parking space, and you’re wondering whether or not to use a real estate agency—and if so, which type of listing agreement is most appropriate. Our real estate agency in Paris's 16th arrondissement, CENTURY 21 Auteuil Immobilier explains the importance of a sales agreement in the real estate industry.

Definition and Importance of a Sales Mandate in the Real Estate Industry

What is a sales mandate?

A sales agreement is a legally binding contract, drawn up in writing, between the seller (the Principal), who owns a property, and the real estate agency (the Agent), granting the agency the authority to sell the property on the seller’s behalf. This contract sets forth the terms and conditions of the sale and specifies the property to be sold, its sale price, the duration of the mandate, and the amount of the real estate agent’s commission, indicating whether the seller or the buyer will pay it.
When you sign the listing agreement, you grant the real estate agency, among other things, the authority to represent you throughout the entire real estate sales process.

The sales agreement plays a crucial role in establishing a contractual framework, defining the parties’ obligations, and protecting the interests of both the seller and the real estate agency. It helps build trust between the parties and facilitates an efficient and transparent real estate transaction.

What are the different types of sales agreements?

You can choose from different types of listings, each with its own set of rules: the Standard Listing, the Semi-Exclusive Listing, or us, or the exclusive listing agreement—that is why it is important to fully understand each type of listing agreement so you can make the right choice.

Simple Sales Agreement

When signing a simple “non-exclusive” listing agreement, you have the option to entrust the sale of your apartment or house to multiple real estate agencies of your choice, all at the same time. You can also look for a buyer on your own to sell your property; in this case, you’ll need to coordinate showings and the various parties involved, provide multiple sets of keys, or make yourself available for showings.

If you think you can increase your chances of selling your property by listing it with multiple agencies, that’s a false sense of security, because you’ll end up with a property that’s been seen over and over again. The risk of simple power of attorney is the devaluation of the property for sale due to excessive advertising on each real estate website, where different listings for the same property appear side by side—sometimes at different prices—with varying sales pitches or information (some agencies include the square meters of the balcony or basement, etc.).

Exclusive Listing Agreement

As its name suggests, the exclusive mandate An exclusive listing agreement involves entrusting the sale of your property to a single real estate agency, thereby granting that agency the exclusive right to market the property. You will therefore not be able to entrust the sale of your property to another agency, or sell it yourself without going through the appointed agency, and the real estate agency you have chosen will be the only one authorized to find a buyer for you. The term of the agreement will be determined at the time of signing by mutual agreement with the real estate agency, typically for a minimum period of 3 months. During this period, the agency has the exclusive right to list and close the sale of the property. The property will therefore appear only once on each real estate website. An exclusive listing agreement allows you to sell your property with complete peace of mind and at the best price; it guarantees efficiency for the seller.

Semi-Exclusive Listing Agreement

The semi-exclusive mandate is a compromise between a standard listing and an exclusive listing. With an exclusive listing, the owner is bound to a single real estate agency for the sale of their property, but a semi-exclusive listing still allows the owner to find a buyer on their own—provided they do not sell the property directly, but instead go through the agency. The exclusivity of the listing agreement applies for the entire duration of the agreement, typically three months, during which time the owner may not engage another agency.

What information is included in a sales mandate?

Regardless of the type of mandate, the information contained in a sales mandate includes:

The names, addresses, and contact information of the principal (owner) and the agent (real estate agent) must be clearly stated.
The name and location of the property for sale. A detailed description of the property for sale, including the address, square footage, number of rooms, etc.
The mandate number listed in the mandate registry
The price at which the property will be listed for sale.
The amount of the agency's fees, specifying whether they will be paid by the seller or the buyer.
The period during which the listing is valid. It may be an exclusive listing (where only the agent has the right to sell the property for a specified period) or a non-exclusive listing (where the owner may also seek buyers independently).
The number and place of issuance of the professional license
The Ombudsman's contact information and website.

Key Information and Provisions

Depending on the parties’ specific needs, specific clauses may be added. For example, special provisions for the protection of confidential information, disclosure obligations, etc.

The exclusivity clause, in the case of an exclusive listing agreement, stipulates that only the designated real estate agent has the right to sell the property during the term specified in the listing agreement.

Agency Fees

The real estate agency’s compensation, known as the agency’s commission, which will be paid to the real estate agent once the transaction is concluded and the sale is completed, is specified when the sales agreement is drafted and signed. This commission is expressed as a percentage of the property’s sale price or as a fixed lump-sum fee and is based on the sales fee schedule of the real estate agency under contract, which is required to display this schedule in the window of its office.

Term of Office

Depending on the agreements between the parties and the type of listing agreement, the real estate agency must specify a limited term of validity in the listing agreement. Regardless of the type of listing agreement, the standard term is a minimum of three months, during which the agreement cannot be terminated.

Duties and Responsibilities of a Real Estate Agent

The real estate agent, who holds a professional license issued by the Chamber of Commerce, is obligated, as a paid agent, to provide professional service and is therefore bound by an obligation of means, meaning that they have a duty to advise and must negotiate to the best of their ability—in line with market conditions, of course—to achieve the best possible outcome desired by their client for the sale of their property.

Regardless of the type of listing, after estimating the market value of the property, the real estate agent must put together a sales file by asking the owner to provide the documents necessary for the sale of the property, including the the principal's title deed and the mandatory technical inspections required based on the type of property.

The Landlord's Obligations

The seller (principal) is required to verify his or her identity by presenting an ID card and the title deed for the property being sold, and by providing the real estate agency (agent) with all the information necessary to prepare the sales file: the condominium bylaws and any amendments thereto, the condominium fees, property taxes, the last three minutes of General Meetings, the technical diagnostics the property for sale, as well as information regarding the condominium such as the building's maintenance log and technical inspections of the common areas.

In the case of an exclusive listing agreement, the client is required to comply with the exclusivity clause granted to the real estate agency acting on the client’s behalf.

In the case of a simple listing agreement, if the owner has found a buyer and sold the property on their own, they are required to inform the real estate agency they had retained of the terms of the sale, including when the property was sold, the price, and the buyer’s name.

Role and Responsibilities of the Real Estate Agent in Different Types of Mandates

The real estate agent has a duty to provide information to buyers, particularly regarding the accuracy of the square footage listed in real estate listings and the property’s compliance with regulations, and to advise the seller; their role is to guide and support the seller throughout the real estate transaction, from the beginning of the sales process until the signing of thenotarized document.

Is it mandatory to sign the sales agreement?

The Hoguet Act of January 2, 1970, and its decree of July 20, 1972, which regulate the real estate agent profession, require the signing of a sales agreement for all real estate transactions. A real estate agent cannot begin marketing your property for sale without a sales agreement signed by both parties.

How and when should you terminate a sales agreement?

A sales agreement may be automatically renewed for a one-year term; however, you may terminate it at the end of the term specified when the agreement was signed by sending the real estate agency a registered letter with return receipt requested at least fifteen days before the expiration date.

Why and how should you choose the right power of attorney?

It is therefore important to take the time to consider what type of sales agreement you want to enter into with a real estate agency before committing.

For greater flexibility, a simple listing agreement may seem like a good option for selling your property more effectively by working with multiple agencies, which will likely feel less obligated.

In contrast, an exclusive listing agreement is a partnership based on trust that allows you to sell your property quickly, with peace of mind, and at the best price. Through this partnership, the seller deals with a single point of contact, who compiles a single, comprehensive file on the property. At our CENTURY 21 Auteuil Immobilier and Auteuil Seine offices, property inspections are also included with this type of listing, as well as a photo shoot—or, for certain properties that require it, a virtual tour or a renovation plan…

What matters most of all is the efficiency and professionalism of the agency you hire—that’s what will make all the difference.

Our team is here to answer any questions you may have about your real estate projects—whether you’re selling, buying, or managing rental properties. Please feel free to contact our two real estate agencies, CENTURY 21 Auteuil Immobilier and CENTURY 21 Auteuil Seine, by phone at 01 42 15 16 21 or 01 56 07 16 21, or by email: auteuil@century21.fr or auteuilseine@century21.fr

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