Real estate brokerage contract: what you need to know

A real estate contract is a contract that you must sign if you use a real estate agency to manage the sale of your property. This document serves to protect both parties and may contain several clauses tailored to the needs of both parties.

There are several types of real estate contracts.

The real estate brokerage contract

Real estate brokerage contracts are intended to mediate the relationship between the client and the agency in the marketing of a property. The purpose of these contracts is to clarify the obligations of each party, the tasks entrusted to the agency, its fees, prohibited practices and those inherent to the assignment, always respecting the general limits defined by law.

Is a real estate contract mandatory?

At the national level, there is no rule requiring the signing of a real estate brokerage contract. Therefore, a written order form is not necessary; a verbal agreement between the agency and the client is valid.

However, we always recommend having a written document signed by both parties that clearly states the agreed-upon conditions in case of conflict.

At the national level, you will be protected, among other things, by the General Law for the Defence of Consumers and Users, and you will have the right to withdraw, without any penalty and without giving any specific reason, within 14 calendar days of the date of signing.

What information must be included in a real estate brokerage contract?

-Identification of the agent
-Details about the property owner and the property itself
-Duration of the contract and detailed description
-Fees, payment dates or milestones, and payment method
-Possible penalty clauses

What types of real estate contracts are there?

There are different types of contracts that can be signed with a real estate agency:

–Non-exclusive real estate contract: offers more freedom to the owner or client, as it allows them to market their property through other agents or personally.
-Exclusive estate agency contract: used when the agent or agency offers the property on an exclusive basis. In these cases, it is important to set a deadline that allows the property to be “released” from the market if the sale target is not met.

How long does the contract with a real estate agency last?

The duration of the contract with the real estate agency is not stipulated by law, although it depends on the real estate agency, which, in the case of exclusivity, extends to three and six months. Automatic extensions can be made if you inform them in time that you do not wish to renew the contract.

What can happen if I cancel a contract with a real estate agency?

It is possible to terminate the contract with a real estate agency if the agency does not comply with the contract, and even when this is not the case, but in this case there may be some penalties, provided that they are included in the agreement.

Certain situations of force majeure could exempt you from these penalties. For example, if, for some unforeseen reason, you are no longer in a position to sell the property.

As for whether an exclusive contract with a real estate agency can be cancelled, a clause is usually added stating that the agency will be entitled to charge part or all of its fees if the seller unilaterally terminates the contract or if they do not accept a purchase offer in accordance with the conditions agreed in the contract (price and term).

Unfair terms in estate agency contracts

Unfair terms in estate agency contracts, take note of the following:

-Those that do not indicate a term of duration or withdrawal, as well as those that are unclear regarding successive contract extensions and how to communicate refusal to continue renewing.
-Those that set disproportionate compensation in the event of withdrawal or breach, including possible penalty clauses of high amounts.
-Those that retroactively apply the accrual of the estate agency commission to a time prior to the formalisation of the sale.

In any case, the most important thing is that the property contract is clear, accessible and legible, with simple and specific wording.