11.04.2024 • 5 min. reading time
Content of this article
The estate agent's commission is an important part of many real estate transactions. The agent's commission, also known as a brokerage fee, is the fee that a real estate agent receives for brokering the sale or purchase of a property. It is usually calculated as a percentage of the purchase price and can vary depending on the region and type of property. The commission covers the costs of the estate agent's services, such as the valuation of the property, marketing, viewings and contract processing.
Regulation of estate agent commission: who pays how much?
Until recently, it was common for the commission to be borne by the buyer alone. This often led to high costs for the buyer.
With the new regulation of estate agent commission, this practice has changed. The resolution passed by the Bundestag on 14.05.2020 led to a new and uniform regulation on the distribution of brokerage costs. This law marks the conclusion of a long-standing legislative process for the fair distribution of estate agent commission when selling real estate. The new law came into force on 23.12.2020.
But who pays the estate agent's commission on a sale? Since the introduction of the new regulation, the buyer and seller generally share the commission equally. This is intended to reduce the burden on buyers and make the real estate market fairer.
For property buyers, the new regulation means that they now only have to pay half of the estate agent's commission. This can mean considerable savings, especially for expensive properties. However, the exact split of the commission between buyer and seller is negotiable and can vary from case to case.
The new regulation also has implications for property sellers. As they now have to pay part of the estate agent's commission, they may be less attractive to potential buyers. This can have an impact on the selling price and the time it takes to market the property. Sellers should therefore consider the impact of the new regulation on their sales strategy and pricing.
When is the broker's commission due?
The estate agent's commission is due as soon as the purchase contract for the property has been signed and the purchase price has been paid. In some cases, the commission may also be due when a preliminary contract or reservation agreement is signed. The exact payment modalities are usually specified in the brokerage contract and may depend on individual agreements made by both parties.
Realtor commission for rentals: What to consider
There are several important aspects to consider when it comes to the brokerage commission for rentals:
Amount of commission: The amount of the brokerage commission for rentals may be limited by law and varies depending on the country or region. In Germany, for example, since June 2015, the commission for renting out residential property may not exceed two months' rent plus VAT.
Who bears the costs: As a rule, the landlord bears the costs for the estate agent. However, in some cases, the tenant may also pay part or all of the commission. However, this must be clearly stipulated in the rental agreement.
Transparency: The estate agent is obliged to inform the tenant transparently about the amount of the commission and their own services. This means that the tenant must be informed of all costs incurred before the rental agreement is concluded.
Brokerage agreement: A written brokerage agreement should be concluded before the broker is commissioned to broker a rental apartment. Among other things, this contract specifies the amount of the commission, the broker's services and the payment terms.
Alternatives: There are also alternative models to the broker's commission, such as letting for a performance-related fee or a flat fee. These options should be examined carefully before hiring an estate agent.
Legal framework: It is important to find out about the current legal provisions on estate agent commission for letting in order to avoid potential legal conflicts.
