Real Estate brokering contract: Real estate agent and Insurance

If you need to make a contract of real estate brokerage, or you are an intermediary and you want to professionalize in your work, do not forget to read this guide. We will explain how these figures relate, what are their main characteristics and what elements compose this contract.

The contract of real estate brokerage

Sometimes, when hiring the services of a real estate agent, we can be confused about the role of the mediator. Let’s see a simple definition:
In the contract of real estate brokerage, the mediator or broker undertakes to communicate to the other party the opportunity to do business with third parties, or to serve as an intermediary to carry out this punctual operation in exchange for a commission or  percentage, which is usually remunerated once you get the result.
The mediator’s job is basically to get to contact the people interested in holding a contract. Therefore, there must be an optimal result to generate commission.

It is the contract most used by real estate agents when they intend to sell or rent real estate through an agent, or for the hiring of insurance agents.

Main characteristics of the contract of real estate brokerage and differences with other contracts

Since they are contracts within the category of commercial collaboration and management of foreign interests dedicated to the provision of services whose objective is to seek, locate and approximate future contractors, they usually meet the following qualities:
  • It is a consensual, voluntary and bilateral contract because the parties agree on their essential elements. It is decided which service and result they want to hire, and what percentage of commission the broker-agent charges.
  • Clauses: It is possible to include valid pacts related to the mediator activity. These include exclusivity, giving information, discretion, loyalty and accountability at the end of the contract.
  • Based on achieving an optimal result (holding a business), and ends once the result has been achieved, unless otherwise agreed (unlike the contract of commercial agent that is held with the aim of having a long duration and make various business).
  • Remuneration: The mediator or broker charges a fee to the commission proportional to the price of the business that manages to celebrate.
  • It is closely related to the mandate, lease of works and services and the Mercantile Commission. But unlike these, the broker is limited to putting people in contact performing the necessary actions to hold a business being oblivious to the end result.

Essential elements of a real estate brokering contract

Form of the contract

As for the legal form of the real estate contract with an agent, there is no specific regulation in our right. It is recommended the pacts to be written, thus avoiding confusion.

Basic content of this contract

  1. Personal details of the parties: name, surname, age, marital status, nationality, NIF, domicile, profession. 
  2. Service to be lent. It can be specific for a business (sale, rent, service) or general for various business related to the profession. 
  3. Zone of action where the services, sector or type of clients will be carried out to be directed.
  4. Representation: It is necessary to authorize the agent to represent the company, thus being able to conclude business on behalf of the company.
  5. Duration of the contract, which will vary depending on whether it is contracted for a specific service or for several. Usually it’s for one.
  6. Rights and responsibilities. For example, to carry out the businesses for which this contract is created, exclusivity, discretion, etc.
  7. Retribución y forma de pago (comisión).
  8. Causas de extinción del contrato. Cuando surja la imposibilidad de llevar a cabo el negocio, perdida o destrucción de la cosa objeto del contrato. También por renuncia o muerte de una de las partes, transcurso del tiempo del contrato, o un incumplimiento, debiendo indemnizar a la otra parte, en su caso.
  9. Remuneration and payment Method (Commission). 
  10. Causes of termination of the contract. When the impossibility of carrying out the business, loss or destruction of the subject matter of the contract arises. Also by resignation or death of one of the parties, course of the time of the contract, or a breach, having to indemnify the other party, if applicable.

Keep in mind that insurance brokers are subject to a specific administrative control and professionalism rules, whose fulfillment is obligatory in order to be able to access and develop their activity. If you detect any infringement, consult one of our specialists to find the right solution to your problem.

If you are interested in the mediation contract or if your profession is to be an agent, you can use our legal and binding models of mediation or brokerage contracts. In case of any legal doubt regarding this contract, our experts will be at your disposal to resolve your queries.