You are good advised in real estate transactions, if you have a powerful real estate agent issues a sole agency agreement.
With the sole agency you bind the broker for the contract period to make intensive efforts to bring the desired purchase or sale to a successful conclusion.
The activities of the agent include that he undertake appropriate promotional activities at their own expense. In return, the client decided not to employ other brokers or third parties. The broker provide all his knowledge, his connections and his knowledge of the market, as well as his knowledge of the complete settlement terms of a real estate business in the service of his client.
Sole agency agreement? An explanation of the IVD.
Who wants to sell as owner his property is regularly faced with the question of whether he should assign one or more real estate brokers with the sale.
The role of a central real estate agent as a contact person for the owner and for all buyers is the mission statement of a sole agency contract. The new DIN standard for Realtor services provide a recommendation for the conclusion of a sole agency contract from (DIN EN 15733). A sole agency contract should include the following components:
1. Written form
It is advisable to arrange a written sales contract with the responsible broker to prove later all agreements between the owner and the customer.
In the contract, the data of the owner, real estate agent and property are recorded in detail.
2. Central contact person
A sole agency also has advantages for the customer:
- Control of the property sale through a single contact person.
- The same object will not be offered several times (by different agents) and different prices.
- Avoid the risk of having to pay the full commission multiple times.
- The listing broker is obliged to increased services!
3. Subcontracts to colleagues
In the sole agency should be explicitly regulated, if the broker is allowed to handle the object jointly with colleagues (subcontracting).
4. Amount of commission
This point is also to be stated in the contract. It is recommended to agree broker’s commissionas a percentage.
If no agreement is reached, resorting to the customary in a place commission.
5. The time of commission payment
Although an accounting by the broker is essential the time of payment should still be governed by the sole agency. Thus, a payment period of two weeks after the accounting could be agreed.
Accounts are usually be made after the conclusion of the mediated property (e.g. a notarized contract of sale)
6. Prospects of the owner
There are two variants of the sole agency contract:
- Limited Single contract: The Owner has the right to sell and rent the property to own prospective customers, such as family members. In these cases, it is not obliged to pay the broker a commission.
- Qualified Single contract: This option should be used if the owner wants to ensure that a screening of prospective took place. Here is the owner committed to foward all interested parties who contact him directly to the Agent.
7. expense allowance
The compensation regulates the reimbursement of marketing expenses of the agent, e.g. for displays and aerial photographs. It depends on the price of the property and the duration of the service.
8. The purchase price
In the assignment should be noted whether the purchase price is fixed or if a certain leeway in negotiating consist. It can also be a period be fixed after which the height of the offer price will be adjusted.
9. Duration of the sole agency contract
The Agreement shall terminate automatically upon successful instrumentality or selling of the property.
Nevertheless usual period is agreed by six months.
Often a clause for automatic renewal of the contract will be installed. This is at the first renewal usually three months, and then only for one month.
10. Aftermath of the contract
There are no guidelines regarding the aftermath of time a sole agency contract. They may be last half a year or longer and they are set by individual courts.
An example of an after-effect is e.g. the conclusion of a sale or lease agreement with a prospective tenant, who has become aware of the property by the broker. In this case the broker is entitled to the commission, even though the sole agency has already ended.