Brokerage contract for the sale of a house - Everything about the exclusive commission, content, right of cancellation

What is a brokerage contract?

The brokerage contract regulates the rights and obligations of the real estate agent in the course of the house sale. The contract thus touches on aspects such as the service provided by the estate agent and the estate agent's commission. In order to be able to claim the broker's commission, different requirements must be fulfilled according to the law. These prerequisites are regulated in § 652 of the BGB. In order to be entitled to the broker's commission, the following criteria should be fulfilled:

• Conclusion of a valid brokerage contract

• Proven activity of the real estate agent in the sale of the house

• Causality of this activity for the successful conclusion of a sales contract

In principle, a brokerage contract can be agreed informally. It does not necessarily need to be in writing and can also be agreed orally. However, from a legal point of view it is worthwhile for both parties to record the brokerage contract in writing in order to establish mutual obligations.

Why is a brokerage contract necessary?

Of course, an estate agent's contract is only necessary if an estate agent is commissioned with the sale of a house. In such a case, the brokerage contract serves the legal rights of both the real estate agent and the client. In this way, the owner can be sure that the real estate agent will take care of the sale of the property. For the real estate agent, on the other hand, the brokerage contract offers a certain degree of protection when it comes to the payment of the brokerage fee at the end of his service. Thus, both parties benefit from the brokerage contract.

Simple commission or qualified sole commission - which brokerage contracts are there?

In general, there are three different types of brokerage contracts: the simple commission, the exclusive commission and the qualified or extended exclusive commission. In practice, it is mainly the sole commission that is agreed in the real estate market, whereas a simple commission is uncommon. We will explain here what the differences are between the brokerage contracts in detail:

Simple commission

A simple commission is a business agreement between the seller and the estate agent in which, according to the law, there is no obligation on the part of the estate agent to act for the sale of the property. The reason for this is that with the simple commission the owner has the option of commissioning other estate agents to market the house. This type of brokerage contract is therefore the most inefficient method of selling a house and is correspondingly rarely used in practice by sellers who want to make the marketing a speedy success.

Sole mandate

In the case of the sole commission, the owner waives the option of using other estate agents. However, he has the option of continuing to market the property himself in parallel with the estate agent's activities. A fixed term is usually agreed for this type of brokerage contract. If the property is not sold during this period, the owner is free to renew the sole commission or to consider other options.

Qualified exclusive commission

The qualified exclusive commission is certainly the most binding and efficient method for a successful house sale. As with the sole mandate, with the qualified sole mandate the seller waives his right to entrust several estate agents with the marketing of his property. In addition, the owner undertakes to complete the sale only with the help of the estate agent in charge. The latter organises the viewings, conducts the contract negotiations and is also present as an intermediary at the final notary appointment. In practice, the qualified sole agency contract is the common method to make the house sale as stress-free and easy as possible for the owner. This type of brokerage contract is also usually set for a specific term.

Who pays the commission according to the brokerage contract?

If the brokerage contract is drawn up in writing, it will usually also stipulate the amount and distribution of the brokerage commission to be paid in the event of a successful house sale. Until 2019, the brokerage commission was handled differently from federal state to federal state. In the federal states of Hesse, Hamburg, Brandenburg, Bremen and Berlin, the broker's commission was always borne by the property buyer. However, a resolution of the Federal Cabinet is expected to pass a reform of the brokerage commission in the course of 2020, according to which the seller and buyer will share the brokerage fee. The draft law provides that the non-assigning party (in this case the buyer) will pay a maximum of 50% of the total cost of the brokerage commission stipulated in the brokerage contract. Read more about this topic in our summary on the new Brokerage Commission Act 2020.

How to terminate a brokerage contract?

How to terminate a brokerage contract depends on the agreed terms. If the brokerage contract was concluded for an indefinite period of time, the owner can usually terminate it at any time without giving specific reasons. If a certain term has been fixed for the brokerage contract - often this is 6 months - the client can terminate the contract in due time at the end of the term. There is also the possibility of extraordinary termination of the contract. However, important reasons are required for this, for example if the real estate agent neglects his sales efforts or acts against the interest of the seller.

Can the brokerage contract be revoked?

Under certain circumstances, a brokerage contract can be revoked within a 14-day period after it has been concluded. The prerequisite for this is that the brokerage contract was concluded as a so-called distance contract, i.e. by email, telephone, fax, SMS or by post. There is, however, one exception: as a rule, the real estate agent will ask, when handing over the cancellation notice, whether he should already start marketing activities before the deadline expires - after all, sellers usually want to complete the house sale as quickly as possible. If the client agrees to this and the real estate agent then fully fulfils his obligation to act, the possibility of revocation expires.

As it turns out, a comprehensive real estate agent contract forms the foundation for a trusting and professional cooperation. Both the client and the real estate agent benefit from such an agreement. If you have any further questions on the subject of brokerage contracts or the sale of a house, please do not hesitate to contact our experienced experts. We look forward to your enquiry.