| Confirming
that
the person selling the property is actually the owner and there are
no any other immediate irreparable impediments to the ownership transfer
should be one of the first steps of preparing a healthy listing.
The broker
should make at least one visit to the property to confirm and investigate
its location, integrity, and peculiarities.
It is imperative
to speak with the owner, neighbors, sindico (condominium administrator),
and any other source that could potentially provide valuable information
that could not be found on legal documentation about the property.
As a client
you can contribute to increase in professionalism and combat of informality
on real estate market by always making sure that the real estate professional
you are working with is legit and that all the necessary preliminary steps
have been taken before visiting a prospective property or allowing your
property to be listed.
Hiring a
broker
Technically,
a client/broker relationship begins with signing of a listing or a service
provider agreement.
The set of
contracts that can be signed between a broker and a client is generally
known as a CONTRATO DE INTERMEDIAÇÃO IMOBILIÁRIA (Real
Estate Brokerage Service Contract).
The following
types of contracts are recognized:
CONTRATO DE
INTERMEDIAÇÃO IMOBILIÁRIA PARA FINS DE VENDA
Listing Contract
CONTRATO DE
INTERMEDIAÇÃO IMOBILIÁRIA PARA FINS DE COMPRA
Buyer Agency
Agreement
CONTRATO DE
INTERMEDIAÇÃO IMOBILIÁRIA PARA FINS DE LOCAÇÃO
Property rent
authorisation
CONTRATO DE
INTERMEDIAÇÃO IMOBILIÁRIA PARA FINS DE PERMUTA
Property barter
authorisation
CONTRATO DE
INTERMEDIAÇÃO IMOBILIÁRIA PARA FINS DE ADMINISTRAÇÃO
IMOBILIARIA
Property Administration
Agreement
Despite the
fact that service contract is obligatory (by professional and legal standards)
between a client and a real estate broker, there have been numerous cases
where commission rights had been granted to contesting broker even when
no such contract existed.
Listing
contract
Listing contract
can be exclusive or non-exclusive. Since there are no MLS in Brazil,
most of the listing contracts by default grant exclusive rights to sell
to the listing broker or agency (commission is due even if the seller finds
buyer directly) for the duration of the contract. Usually such contracts
are signed for a period of 90 business days. If the seller desires
to grant only EXCLUSIVE AGENCY contract (commission is only due if the
listing agent finds buyer), the clause has to be explicitly stated and
carefully worded.
If the transaction
takes place after the expiration date of the contract, but as a result
of the broker’s contribution, the fee is still due.
Exclusive contract
gives the rights of public advertising to the broker (posting signs, running
classifieds ads, posting listings on web sites). Non-exclusive contract
would limit marketing options to the internal catalogs, existing client
lists and such.
Commission
or fees
Legislation
and regulations guiding profession of real estate broker in Brazil shies
away from calling compensation for real estate brokerage services commission.
Instead, consistent effort is being made to equate such compensation with
fees payable to other liberal professionals in Brazil, such as: lawyers,
doctors, medics… The word used for the legal and practical purposes
is Honorários. Such effort is being made in order
to further disassociate real estate broker profession from the ranks of
common sales clerks and to elevate professional status of the category.
The Honorários
ought to be fixed at the service contract and should be clearly identified
as for the type of services that would generate such compensation.
Note:
Commission and fee are going to be used in this article interchangeably
since commission is the most frequently used term designating such
compensation in the English language.
There are five
basic types of professional compensation:
Sale fee
This commission
is paid by either seller or buyer and is based on the type of property
and sales commission table provided by the corresponding state’s CRECI.
Usually, the rate ranges from 5% to 10% of the amount of the transaction.
Property
Barter commission
Barter commission
generally follows the same guidelines as the sale commission. It
is important to note that in case of a direct exchange of a property for
another one of equal value, the broker can claim commission for both.
When a property of a lesser value is provided as part of payment for a
property of a greater value only the commission on the property of the
greater value is due.
Property
Lease commission
Rent commission
is always charged to the landlord. It usually is defined as an amount
equivalent to a month worth of rent.
Property
Administration fee
Can be fixed
at up to 12% of the amount of the monthly rent. If the amount of
rent is fixed for the entire duration of the lease agreement, then greater
amount can be charged.
Property
Appraisal (Property valuation) fee
Real Estate
brokers in Brazil can conduct market analysis and determine market value
of the property in question.
Note:
If the property appraisal is required for legal, fiscal, or mortgage purposes,
only civil engineers could provide reports that can be admitted.
When the
fee is due
It is a common
misconception that the broker fee ought to be paid at closing. In
reality, payment of the broker fee is due at the moment when the transaction
has become imminent, i.e. when the intent to purchase or a similar document
has been signed.
Even if the
deposit/earnest money has been paid and the buyer later pulls back for
one reason or another, the seller is liable for the full broker commission.
This is one of the reasons that the down payment should be set at least
10% of the agreed sale price in order to cover possible expanses that include
broker commission.
It doesn’t
mean that if the broker has merely introduced the two parties that the
commission is due. There has to be a clear indication that the transaction
is to take place. What is usually not considered in this situation
is whether or not the transaction is eventually carried through by either
of the parties or not.
If the transaction
falls through due to the unprofessional, unethical, or illegal conduct
by the broker, there is a fair chance that the fee would be denied and
the broker could be held responsible legally and financially for his or
her actions. |
