Explaining the New Brokerage Commission Regulations in Germany
Who pays the realtor fees in Germany?
From 23 December 2020, the distribution of the broker's commission for the purchase of apartments and single-family houses will be reorganised as part of the federal government's housing and rent package, which was agreed on 18 August 2019. Until now, it was common in many federal states for buyers to pay for the costs alone. This has changed.
How is the distribution of the broker's commission regulated?
German law provides that when buying an apartment or a single-family house, the real esate agent's client will be liable to pay. This means that sellers will have to pay for the costs only if they have commissioned an estate agent. After the seller has provided proof of paying the total commission, they can obtain up to a maximum of 50 percent of the commission back from the buyer. The same applies vice versa when buyers hire the real estate agent. If both parties have commissioned the broker, the agent can also claim their commission equally from both the seller and the buyer. In the event that the broker waives the commission for one party, they must also do so for the other party. In addition, brokerage agreements will in future only be valid in text form, for example as an e-mail. Previously, oral agreements or a handshake were sufficient. The written form requirement is intended to ensure compliance with the new regulations and protect buyers from exploitation.
Why is the brokerage commission distributed differently?
The practice of buyers paying the entire broker's commission, previously common in many German federal states, made it difficult for many private individuals to purchase their own home. The broker's commission of up to 7.14% of the purchase price, like the land transfer tax or the notary and land registry fees, is part of the additional costs and must be paid directly. The new law is intended, among other things, to make it easier for young families to afford their own home. For many of the flats we offer, there is still no commission. If you are also looking for a new home, it is worth taking a look at our portfolio. For more information about buying real estate in Germany, see our guide for expats.
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