Understand why the authorization to sell brings security and facilitates the negotiation of rural properties.
In the rural real estate market, authorization to sell is an essential element for everyone involved. It not only lends credibility to the business offer, but also creates an environment of mutual trust between the real estate company, the owner and the potential buyer.
Authorization to Sell vs. Commitment to Sell
The first point to note is that a sales permit does not represent a definitive commitment to sell. In fact, it indicates the owner’s willingness to receive and evaluate offers. This authorization is proof of the owner’s commitment to the negotiation process, allowing everything to take place in a structured and organized manner.
With the sales authorization in hand, the owner demonstrates that he is willing to discuss terms, evaluate offers and potentially move on to the closing stage of the deal. And the broker conveys confidence to the buyer by showing that he has a mandate to represent the owner in the future negotiation.
Defining the Rules of the Game
The sales authorization is essential for establishing the parameters of a negotiation. It creates a clear framework in which the property’s details, minimum price, payment method, broker’s commission and other essential aspects of the deal are clearly defined. This framework gives the real estate agent and the buyer the assurance that all parties have aligned expectations.
Flexibility for the Owner and Security for All Involved
There is a common perception that the authorization to sell implies exclusivity in the sale of properties. Although there are contracts that define this exclusivity, most of them preserve the owner’s flexibility, allowing other sales options to be explored.
Another recurring concern – being “tied down” to a contract, can be easily circumvented by simply providing for a fixed term in the Sales Authorization or allowing cancellation without justification at any time. In turn, security for both parties comes from clear, written rules.
Commission: Recognizing the Work of Real Estate
The Authorization to Sell defines the percentage of the commission agreed to remunerate the real estate agency and its brokers, ensuring that the negotiation is successful. This is another essential point to ensure that expectations are aligned between the parties before the service is carried out.
However, the document also regulates the rights and obligations that endure after the relationship between the parties has ended, for example, the period to which the broker would be entitled to the commission, also known as the “tail” of a contract.
Witnesses: Understanding Their Importance
Although often overlooked, witnesses can and should be included in the Authorization to Sell, as they play an important role in preserving a good relationship between the parties. In essence, their role is to increase legal certainty and attest to the veracity of commercial agreements, even if they are not formalized in a contract.
As well as serving as a disincentive to litigation, witnesses can also give impartial opinions on what has been agreed, should the parties fail to reach a negotiated solution.
Why is Authorization to Sell Essential for Farm Owners, Brokers and Buyers?
In short, the authorization to sell is much more than a simple document: it is an instrument that makes it possible to carry out an efficient and secure negotiation. It allows the owner to maintain flexibility when exploring sale options, while providing the necessary security for the real estate company to invest its efforts in finding a suitable buyer.
In addition, by clearly defining the terms of the negotiation, the sales authorization aligns expectations between the owner, the real estate agency and the potential buyer, avoiding unpleasant surprises later on.
So whether you’re a farm owner considering selling your property, or a broker interested in brokering such a deal, signing an Authorization of Sale will be a key step in ensuring a smooth and successful sale process.
