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Who pays the estate agent commission when buying real estate?

An estate agent can help you buy a property
An estate agent can help you buy a property Photo: Getty Images

October 10, 2024, 10:40 am | Read time: 4 minutes

If you hire an estate agent, you have to pay them – at least, that’s the rule for rented properties. But what about when buying real estate? And what is legally permissible in an estate agent contract – and what is not?

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When buying a property, a commission is payable to the estate agent. Nationwide, this can be up to 7.14 percent of the purchase price, according to the consumer protection association “Wohnen im Eigentum.” However, not all claims made by estate agents are justified, and not every contract is valid. Here, you can find out everything you need to know about estate agents.

How does an estate agent contract come about?

There are no formal requirements. “It can be concluded in writing, verbally, by email, or over the phone,” says Julia Wagner from the German Homeowners’ Association Haus & Grund Deutschland. The prerequisite is that both partners are aware of the conditions and consequences. If the contract was concluded online or over the phone, the client may withdraw from it within 14 days.

Can I instruct several estate agents at the same time?

In principle, sellers can instruct several estate agents. But it’s usually not a good idea, Wagner points out. “It doesn’t make a good impression if a property is offered on the market several times, perhaps even at different prices.” If you give a sole mandate to an estate agent, you ensure that only this agent markets the property. The owner does not have to refer every interested party who approaches him to the estate agent.

Commission often has to be paid even for transactions that have come about without the agent’s involvement. “An individual agreement is usually required for such direct deals,” explains Wagner.

Some contracts are automatically extended – is that permissible?

. However, there are often sole contracts with a minimum term and an automatic extension. If the estate agent does not successfully sell the property, sellers must react.

“Customers are on the safe side if they terminate the sole mandate in due time before it expires,” explains Wagner. The automatic extension is then excluded, and they can take action themselves or instruct another estate agent.

What does the estate agent have to tell the prospective buyer about the property?

The estate agent must provide comprehensive information about the property to the best of their knowledge – including information about defects. They must not embellish or misrepresent anything. “If an estate agent knowingly provides false information about a property, they forfeit their claim to the fee,” says Jürgen Hillmayer from the Construction and Real Estate Law Working Group of the German Bar Association (DAV). In the worst case, there is a risk of losing the commission and even damages.

Who pays the commission for the estate agent?

This is freely negotiable between the contracting parties – as is the amount of the commission for the estate agent, says Wagner. There are regional customs that are not binding. In Bavaria and NRW, buyers and sellers often pay half each. In other federal states, such as Berlin, Hamburg, or Brandenburg, buyers usually pay in full.

“However, how this is handled in individual cases also always depends on the specific market conditions,” explains Wagner. If a property is difficult to sell, the seller is more likely to agree to pay the commission on a pro-rata basis. In the case of sought-after properties, the buyer often has to pay the commission in full.

More on the topic

Can estate agents charge expenses in addition to the commission?

The agent’s commission should cover all costs. “In principle, the buyer does not have to reimburse any expenses unless this is expressly agreed in the contract,” says Hillmayer.

“Money only flows if the transaction is successful, i.e., after the property has been bought or sold,” explains Hillmayer. “Of course, it is annoying for the estate agent if they make an advance payment and no purchase agreement is concluded in the end.” But that is part of the professional risk.

This article is a machine translation of the original German version of MYHOMEBOOK and has been reviewed for accuracy and quality by a native speaker. For feedback, please contact us at info@petbook.de.

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