THE NEW BROKERAGE ACT: WHAT WILL CHANGE FOR YOU

Distribution of commission is now standardized

Until now – especially here in Berlin – there was no clear regulation on estate agent commission for property purchases and sales. Which contracting party paid how much was negotiated individually. The buyer often bore the full amount of the estate agent’s commission as part of the ancillary purchase costs.

This has changed since December 2020 when the new Real Estate Agent Act came into force. One of the most fundamental innovations of the law is the distribution of commission in order to reduce the often high ancillary purchase costs for buyers and at the same time create a standardized regulation.

Since December 2020:

• The buyer pays a maximum of 50 % of the commission.
• There is no regulation similar to the ordering party principle for letting in the case of property purchases.
• The seller can pay a higher percentage than the 50 % and, for example, enable a commission-free purchase.
• The estate agent contract must be in text form.
• If the estate agent acts free of charge, he must do so for both contracting parties.

The Real Estate Agent Act is a regulation passed by the German government that applies to all residential property purchases in Germany. Individual agreements can no longer be made if they are to the disadvantage of the buyer. Unfortunately, we as estate agents can no longer influence this.

Which contracts does the law specifically apply to?

The German government primarily wants to protect and relieve private buyers, i.e. consumers, with the new regulation. The law therefore only applies to property purchases with private consumers and only to purchases of flats and detached houses (as well as similar properties such as semi-detached houses and terraced houses).

The statutory provisions on commission distribution do not apply if a commercial property or apartment block is purchased and the buyer is an entrepreneur.

What does this mean for you as a buyer/seller?

If buyers are relieved financially when buying, this logically means that sellers are burdened. Above all, however, the new law ensures greater transparency and legal certainty on the market. As both contracting parties now bear the costs of the estate agent, both parties have an interest in appointing a professional estate agent. This will prevent dubious service providers from remaining on the market.