Who pays the real estate agent's commission when selling a house, and how much can it be? The 2020 legal amendment has provided clarity, but many details are crucial for sellers and buyers.
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The topic briefly and concisely
Since the end of 2020, the real estate agent's commission for the sale of single-family houses/apartments to consumers is usually shared equally between the seller and the buyer.
The amount of commission is not legally fixed and is negotiable, but it often ranges between 3.57% and 7.14% of the purchase price.
Broker contracts require written form; the commission is only due after the notarisation of the purchase contract.
Are you planning to sell your house and wondering about the real estate agent's commission? Since 23 December 2020, there has been an important new regulation designed to ease the burden on private buyers of single-family homes and apartments. The key point is the sharing of the agent's fees. This article explains the current legal situation, how the sales commission is calculated, and what options you have to save costs. A thorough property valuation is often the first step to a successful sale.
New Legal Regulations on Broker Commission: What Sellers Need to Know
The "Law on the Distribution of Broker Costs in the Mediation of Purchase Contracts for Flats and Single-Family Houses" came into effect on 23 December 2020. It aims to financially relieve buyers of residential properties. The most important change: buyers can no longer be generally obliged to take over the entire commission if the seller has commissioned the broker. For contracts concerning the sale of condominiums or single-family houses to a consumer, written form for the broker contract is now mandatory (§ 656a BGB). Oral agreements or a handshake are no longer sufficient. This regulation provides more transparency and security for both contracting parties. Knowing these basics is crucial before you consider whether you want to sell with or without a broker.
Who pays the house sale commission? The current models of cost allocation
The issue of who bears the broker's commission when selling a house is now more clearly regulated. Three main models have been established, based on §§ 656c and 656d BGB:
Dual activity with equal sharing: If the broker is commissioned by both the seller and the buyer, both parties must commit to sharing the commission equally (50% each) (§ 656c BGB). This is the most common situation when selling single-family homes and apartments to private individuals.
One party commissions, the other contributes: If only one party (e.g., the seller) concludes a brokerage contract, they can agree with the other party (buyer) that they will cover part of the costs. This contribution may, however, be no more than 50% and only becomes due once the commissioning party has demonstrably paid their share (§ 656d BGB).
One party bears the full commission: It is still possible for one side to bear the entire cost. This could be the seller (internal commission only) or the buyer, if they gave the broker an independent search mandate before the broker acquired the specific property. An accurate valuation for the house sale can highlight room for negotiation here.
These regulations apply specifically to the sale of apartments and single-family homes to consumers. For other types of properties, such as the sale of land or multi-family houses, different agreements are still possible.
Amount of the Broker's Commission: What is common and what is negotiable?
There is no statutory cap on the amount of house sale commissions in Germany; they are generally freely negotiable. Total commissions between 3.57% and 7.14% of the notarised purchase price, including the statutory VAT of 19%, are common. In the most common variant of a 50/50 split, each party pays, for example, 3.57%. The exact amount varies greatly by region. In many federal states, the total commission is 7.14%, while in others, such as Bremen or Hesse, it tends to be around 5.95%. It is advisable to know the prevailing rates before entering into price negotiations when selling a house. The commission is due only in the event of success, i.e., after the conclusion of a notarial purchase contract.
Exceptions to the new commission regulation: When does the division not apply?
The new regulation regarding the division of house sale commission does not apply to all real estate transactions. Important: It specifically applies to the sale of condominiums and single-family homes when the buyer is a consumer. The following scenarios are exempt from the statutory commission split:
Sale of building plots.
Sale of commercial properties.
Sale of mixed-use properties (residential and commercial parts).
Sale of two-, three-, and multi-family houses.
Sale of single-family houses and apartments to commercial buyers (e.g. companies, investors not acting as consumers).
In these situations, buyers and sellers can arrange the commission payment more freely, even to the complete assumption by one party. This highlights the necessity to minimise risks when selling a house by thoroughly reviewing the contract terms. For an initial assessment of whether your situation falls under the new regulation, the Auctoa ImmoGPT chat can also be helpful.
Estate agent contract and commission due date: What you need to know
A valid brokerage contract is the basis for any claim to commission. Since the change in the law at the end of 2020, this must be concluded in text form (e.g., email) when selling flats and single-family homes to consumers (§ 656a BGB). Oral agreements are no longer sufficient here. The contract should clearly define the amount of the commission or the method of its calculation. The house sale commission is usually due only when the main contract, i.e., the notarised purchase contract, has been successfully concluded. Typically, a payment period of about two weeks after signing the contract and receiving the invoice is agreed upon. Consumers also have a 14-day right of withdrawal for brokerage contracts concluded outside of business premises. Those considering selling property privately circumvent this issue but must bear the entire effort themselves.
Negotiation tips: How you can influence the house sale commission
Although there are customary rates, the house sale commission is negotiable. Particularly for high-value properties or when a quick sale is likely, agents are often open to discussion. Here are some approaches to influence the commission rate in your favour:
Adjust the scope of services: Clarify exactly which services the agent will provide. For example, if you handle the conduct of viewing appointments yourself, this can be an argument for a lower commission.
Obtain comparison offers: Talk to several agents and compare their terms and service offerings. This gives you a better negotiating position.
Know the market value: A realistic property valuation, as offered by Auctoa, aids in better assessing your property's value and the appropriateness of the commission being requested.
Offer an exclusive contract: A sole agency agreement can be more attractive to the agent and may create room for negotiation of the commission, as they are then exclusively tasked with the marketing.
Clear communication and documenting all agreements in writing is crucial. Also consider whether a sale without an agent is an option to completely save on commission costs, but weigh this against the effort and expertise of a professional.
hausverkauf-provision
The new regulation concerning the property sale commission has brought more fairness and transparency to the real estate market, especially for private buyers of owner-occupied homes. The equal division of costs between seller and buyer is now the standard practice for sales of single-family homes and apartments to consumers. Nevertheless, there is room for negotiation regarding the commission, which typically ranges between 3% and 7% of the sale price. It is important to know the exact contractual terms, the scope of the law, and the local rates. A professional, AI-supported property valuation by Auctoa or a conversation with our ImmoGPT chat can help you strengthen your position and make informed decisions. This ensures a successful and cost-optimized property sale.
Additional useful links
Gesetze im Internet offers the full text of § 652 of the German Civil Code (BGB) on brokerage contracts.
The Federal Statistical Office (Destatis) provides comprehensive information on construction prices and the real estate price index.
The Deutsche Bundesbank offers detailed indicators for the residential property market.
The Consumer Advice Centre provides information on permissible and impermissible brokerage fees for real estate.
The German Bundestag provides information on brokerage costs.
FAQ
What does the 2020 law on broker commission state?
The law has regulated the distribution of broker fees anew since 23rd December 2020. The key point is that when selling flats and single-family houses to consumers, the commission is generally shared between the buyer and the seller (usually 50/50). Additionally, written form is required for broker contracts.
How is the house sale commission calculated?
The commission is calculated as a percentage of the notarised purchase price of the property. Example: For a purchase price of €400,000 and a total commission of 7.14%, the commission amounts to €28,560. If split equally, each party pays €14,280.
When do I need to pay the broker's commission?
The broker's commission becomes due only after the purchase contract for the property has been notarised, thus resulting in a successful sale. The payment deadline is often two weeks after receiving the invoice.
Are there exceptions to the sharing of broker fees?
Yes, the duty to divide does not apply to the sale of building plots, commercial properties, apartment buildings, or when the buyer is not a consumer. In these cases, individual agreements can be made.
Can I sell a house without an estate agent to save on commission?
Yes, a private house sale is possible and saves the estate agent's commission. However, consider the significant time investment and the expertise needed for valuation, marketing, viewings, and contract negotiations.
What happens if only the seller appoints the real estate agent?
If only the seller engages the estate agent, they are generally responsible for paying the commission. However, they can agree with the buyer that they will cover up to 50% of the costs. The buyer's share becomes due only after the seller has demonstrably paid their share.
