What is a property search mandate?

A property search mandate is an agreement that establishes a contractual relationship between a principal (seeking a property to rent or purchase) and an agent, who acts as an intermediary. Based on the specifications provided by the principal, the agent undertakes to identify suitable rental or purchase opportunities. This contract may include compensation for the agent, as well as the reimbursement of expenses by the principal. It is important to note that the agent is bound by an obligation of means rather than an obligation of result.

The property search mandate (not to be confused with a sales mandate) plays a crucial role in the Swiss real estate sector. As a strategic tool, it is involved in numerous transactions across the country. For anyone considering buying or selling property in Switzerland, it is essential to understand how a search mandate works and why it matters.

Definition: property search mandate

A property search mandate is essentially a formal agreement between a buyer and a real estate agent. Under this contract, the buyer entrusts the agent with the mission of locating a property that meets specific criteria. This arrangement gives the real estate agent the role of the buyer’s representative, authorising them to search for and potentially negotiate the purchase of properties that match the buyer’s expectations.

This type of contract is built on a strong relationship of trust, as the buyer relies on the agent’s expertise to identify the most suitable property, while respecting the budget and predefined criteria. In most cases, such an agreement also requires the buyer not to engage other agents for the same search during the period covered by the mandate.

How does a property search mandate work?

The growing complexity and regional specificities of the Swiss property market have made the search process increasingly challenging for buyers. To navigate this complexity, the property search mandate has emerged as an essential tool to streamline and professionalise the real estate acquisition process.

Originally, this mechanism was designed to leverage the local expertise of real estate agents, who, thanks to their extensive networks and in-depth market knowledge, could effectively select suitable offers, avoid pitfalls, and identify properties that precisely matched the buyer’s requirements.

By using a search mandate, buyers benefit from a targeted and optimised approach, saving valuable time and effort by avoiding visits to irrelevant properties.

What are the advantages of a property search mandate?

Although a property search mandate may seem straightforward, it actually offers a wide range of benefits for all parties involved. Whether it is about saving time, accessing exclusive properties, or securing the transaction, this contractual tool is a valuable asset in the real estate sector.

Benefits of a property search mandate for the buyer

• Exclusive access: A key benefit for buyers is access to off-market properties – those not yet advertised or discreetly sold. These exclusive opportunities, often exceptional finds, are accessible only through an agent with a search mandate.
  
• Saving time and energy: Instead of browsing countless listings, buyers benefit from the agent’s expertise and a pre-selection aligned with their requirements.
  
• Stronger negotiation: Thanks to their in-depth market knowledge and extensive network, agents can often negotiate more favourable terms for their clients, whether in price, sales conditions, or other specific advantages.
  
• Personalised valuation: A real estate agent has the expertise to provide accurate valuations of the properties you are interested in.
  
• Peace of mind: Knowing that a professional is actively searching for the ideal property while covering all legal and administrative aspects offers buyers great reassurance.
  

Benefits of a property search mandate for the seller

• Stronger buyer commitment: By signing a search mandate, the buyer demonstrates their seriousness and determination to purchase, reducing the risk of no-shows or failed negotiations.
  
• Time optimisation: Working with committed buyers allows the agent to focus solely on properties that precisely meet expectations, eliminating unnecessary visits and interactions with hesitant clients.
  
• Targeted property valuation: An agent with a search mandate knows exactly what their client is looking for, enabling them to highlight properties more effectively based on these criteria, thus increasing the likelihood of a successful sale.

Setting up a property search mandate: the key steps

Establishing a property search mandate is an important step in your real estate acquisition process. However, to ensure its effectiveness and avoid complications, it is crucial to take certain precautions.

1 – Choosing the real estate agent

• Research and reviews: Start by identifying active agents in your region. Read online reviews and ask for recommendations from friends or family. Shared experiences from other clients can be highly insightful.
  
• Local expertise: Ensure the agent has an in-depth knowledge of the region where you plan to buy. A strong understanding of the local market is essential to uncover the best opportunities.
  
• Reference checks: Ask the agent for references and take the time to contact past clients. This will help you assess their professionalism and reliability before committing.
  

2 – The terms and conditions of the mandate

• Careful reading: Take the time to thoroughly read the contract. While this may seem obvious, many important details can be overlooked with a quick read.
  
• Clarifying uncertainties: If any aspects of the contract remain unclear, do not hesitate to request clarification from the agent or seek advice from a legal professional. It is best to resolve any ambiguities from the outset.
  
• Negotiating terms: The conditions of a search mandate can often be subject to negotiation. If certain terms do not seem appropriate, discuss them with the agent to reach a mutual agreement.

What is the legal framework for a property search mandate?

A property search mandate goes beyond a simple contract; it establishes a mutual legal commitment, clearly defining the rights and obligations of each party.

• Adaptability of duration: If you feel that the standard three-month period is too short or too long, discuss it with your agent. Many agents are flexible and may adjust the duration of the mandate according to your requirements.
  
• Termination conditions: It is crucial to fully understand the termination terms of the mandate, particularly regarding any potential penalties or specific obligations to be met in the event of cancellation.
  

Cost of a property search mandate

The cost of a search mandate can vary depending on several factors, such as the type of property, its location, and other specific elements.

• Fixed fees vs. percentage: Some agents offer the option of choosing between a fixed fee and a percentage of the transaction. Assess the pros and cons of each option based on your financial situation and the specifics of your property project.
  
• Beware of additional fees: Be cautious about potential extra costs such as advertising expenses or travel fees. It is advisable to request a detailed breakdown of all potential charges before committing.
  
• Negotiating fees: Fees may sometimes be negotiable. If you believe the percentage requested is excessive, discuss it with the agent to try to agree on a reduced rate.

FAQ on the property search mandate