How much commission should I charge
Immoral brokerage commission: How much commission can be charged
When it comes to talks about real estate agents, the broker commission also comes up very quickly. The stereotypical statement is that the broker's commission is too high.
Even for those who have received their dream property and have received good advice from the real estate agent, the commission feels too high.
Why is that?
Is the broker's commission really too high?
When is the commission even immoral?
This week I go under the topic"Immoral brokerage commission" these questions about the amount of the commission. You can also look forward to the interview with the Real Estate Ombudsman on this subject, which will conclude this series on Friday.
What can the broker ask for as commission?
It's strange. If you read the press reports about real estate agents, then there is always talk of the "too high" broker commission.
No fixed commission rate in the law
But if we take a look at the law together, then the amount of the commission is not regulated at all. You will not find any information on the amount of commission in the provisions of the BGB on brokerage law.
Whenever the law is silent and does not fix the price for a service, it is a matter of negotiation between the parties how high this price is.
This is formed on the market or is submitted as a proposal from one side.
It is different with lawyers or tax consultants
From lawyers and tax consultants, you know the fee schedule and the calculation of the fees based on the value of the subject. There is no such fee schedule for real estate agents.
Accordingly, there is no limit to the amount of the commission. Neither up nor down.
Exception: apartment rental
Stop! There is one exception. The Housing Agency Act specifies the maximum amount of commission that the real estate agent may demand from the tenant.
There it is regulated that the broker may not charge more than two months' rent commission when renting an apartment.
The limit of the commission is immorality
If the amount of the commission is not regulated by law, then the general regulations apply. This means that the idea of appropriate performance and consideration is formed on the basis of the rules on immorality.
It is not precisely specified when the commission is immoral.
Only this much: 4, 6 or 8 percent brokerage commission from the purchase price of a property is not considered immoral by the case law. Customers and real estate agents are therefore free to agree an amount within the “approved” range.
What is the "approved margin" on the brokerage commission?
The BGB states that the “local commission” is deemed to have been agreed if the customer and real estate agent have not agreed on the amount of the commission to be paid.
The legislature incorporated this regulation into the law at the end of the 19th century. The amount of the commission should therefore be deliberately left to the negotiation between the broker and his contractual partner.
What is customary in the area is what has emerged on the market as the usual rate of the broker's commission for a certain type of property.
In case of doubt, the court decides
If the broker and customer have not agreed on a commission amount and there is no agreement later, then legal disputes often arise.
In the course of this, the court has to decide whether the commission charged is to be regarded as customary for the location. For this purpose, the court will usually commission an expert who will comment on the matter.
A scientific study by the Bernburg University of Applied Sciences from 1998 helps here, in which the university determined the local commissions for all federal states and also included exceptions at district level for certain types of property in the study.
Unfortunately, the investigation has not been repeated. Only for Baden-Württemberg and Bavaria is there a more recent study by scientists commissioned by the local real estate association IVD.
The rule of thumb is:
The local commission is on average 6% plus VAT. The commission is divided between the buyer and the seller depending on the region. For real estate above a certain purchase price, the commission rate drops.
Nevertheless: commission is a matter of negotiation
Basically. The commission can be freely agreed. So that brokers and customers do not argue about the amount, the amount of the commission should be set when the contract is concluded.
In tomorrow's article I will show you the view of the jurisprudence on the immorality of the brokerage commission.
It doesn't work without a broker - and that's a good thing. When looking for attractive and new properties, one thing strikes you: it doesn't work without a broker - and that's a good thing. > read more
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