Broker commission: Reform 2020

Who had to pay the broker's commission before 2020?

In most federal states, the broker's commission was already shared before the 2020 legislation. However, there was no binding regulation on the proportions in which the buyer and seller of a property shared the costs for the real estate agent. In the federal states of Berlin, Brandenburg, Hamburg, Bremen and Hesse, the buyer bore the entire commission before 2020.

Who pays the estate agent's commission under the law since 2020?

The law on estate agent commission from 2020 stipulates that the buyer and seller of a property share the commission equally throughout Germany. This regulation means that both parties share the cost of the commission equally. A regulation based on the buyer-pays principle, according to which the party that commissioned the estate agent always pays, is now inadmissible. However, if desired by the seller, the unilateral representation of interests for the seller can continue to exist.

Investors planning to invest in a residential or commercial property are not affected. The law on estate agent commission has no influence on this property segment, as residential and commercial properties are not owner-occupied residential property, but commercial property. The principle continues to apply here: Which party pays all or part of the brokerage fee is a matter for negotiation or is determined by the market environment.

Advantages of the law: more professionalism and fairness

The law on estate agent commission is a positive signal, especially for property buyers. In contrast to the ordering principle in some federal states, the brokerage law represents a nationwide standardised and fair regulation for sharing commission in order to reduce ancillary purchase costs and relieve the burden on property buyers. The regulation has further professionalised the property market.

Attention when determining the sales price

Due to the law on estate agent commission, some buyers fear that property sellers will add their brokerage fee to the sale price of the property. We can reassure you in this respect: As experienced estate agents, we know that an excessively high purchase price can have a negative impact on the marketing of a property, resulting in an excessively long time on the market, for example. However, the longer a property is on the market, the more its value decreases in the eyes of potential buyers.

Exception: When the broker's commission is not shared

Even if the division of the broker's commission applies nationwide, there is an exception in which only the seller is liable for the commission only the seller may pay the broker's commission if he explicitly wishes to do so.

Is it still worth hiring an estate agent?

Particularly in the federal states where, until now, only the property buyer has had to pay the brokerage fee, sellers are asking themselves whether it is worth commissioning an estate agent as a result of the law on estate agent commission. After all, there are also numerous online providers who take on the marketing without paying a brokerage fee. In our experience, however, there are still a number of good reasons for hiring a personal estate agent.

Do not underestimate the house sale

Many owners underestimate the effort involved in selling their own property. For example, numerous documents such as energy performance certificates, residents' certificates or the land register must be presented in order to successfully complete the sale of a house. Owners who are unable to present any of these documents during negotiations run the risk of incurring extremely high fines. Working with a real estate agent gives you peace of mind: on the one hand, a real estate agent offers you the advantage of having a trustworthy advisor at your side who will explain all questions relating to the property sale in a comprehensible manner and knows where to obtain the required documents. A personal advisor is therefore invaluable, especially in a complex matter such as selling a house.

In addition, the sale price of a property should always be assessed by a competent estate agent. This is because the value of a property can only be realistically estimated after a personal inspection of the property and a detailed consultation based on experience and sound market knowledge. Automated online valuations, on the other hand, are not able to take into account all the relevant factors that can influence the sale price of a property. These are just two of the reasons why it is worth hiring a real estate agent.