- Partner
Clarity at last - new rules on broker commission
Michael Reiss, Managing Director Munich / Sotheby's International Realty and Sven Johns, Mosler & Partner Rechtsanwälte, answer the most important questions about the law and clear up misunderstandings.
What is the most important aspect of the new law for buyers and sellers?
Sven Johns: If a real estate agent acts on behalf of both parties to the contract, both parties must also agree to pay the same amount of commission in the future. This means that the buyer only ever pays what the seller pays. The Agents strictly obliged to remain neutral in this process.
What is the relationship between the Agents and his clients Agents this case?
Sven Johns: He has the same obligations towards both parties - the same fiduciary duties, the same duty of disclosure. He is then strictly neutral in the purchase price negotiations. He only accepts and communicates the purchase price offers of the respective parties.
Has this also been received by customers?
Michael Reiss: I don't think so. Many people believe that the so-called ordering principle now applies as a matter of course. The legislature introduced this into tenancy law six years ago. Since then, people looking for an apartment no longer have to pay a commission if the owner of the apartment orders the broker's services and the broker then advertises it externally. This is not the case with sales. Although the Agents the marketing order from the owner, the seller and buyer will still pay the same commission in the future.
How should the law be assessed from a broker's perspective?
Michael Reiss: The positive thing is that there is now clarity for both sides. This provides security and a sense of fairness.
How can the buyer check that the commission is actually shared?
Sven Johns: In future, every brokerage agreement must be in writing. Verbal agreements will no longer constitute a brokerage agreement. The Agents now disclose what he has agreed with the seller. If he violates this obligation or has agreed something else, this may be grounds for forfeiture of the commission or the agreements may be invalid.
Does the law also regulate the amount of the brokerage fee?
Sven Johns: No, the upper limit is still negotiable and not fixed. And, of course, every seller can Agents the commission individually with the Agents . However, the buyer will always pay the same commission. Internet service providers in particular will probably now offer their services at different prices. Only the advertising slogan "commission-free for the seller" is no longer possible.
Michael Reiss: In Bavaria, we will continue to work with three percent plus VAT for buyers and sellers. This gives our customers clarity. I am convinced that this rate is appropriate in view of our service and the benefits it brings to our customers.
Will this then lead to a reassessment of brokerage services?
Michael Reiss:I hope so. Only in Germany is the real estate agent profession unregulated, and only minimal qualifications are required. In the future, buyers and sellers will scrutinize the training and quality of Agents . Our services go far beyond reviewing and preparing documents. An international network is crucial, especially for high-priced properties. Do I know the right customers? Can the sale be conducted discreetly? And does the Agents recognize Agents development potential of a property, which then makes it interesting for new target groups? Our customers appreciate our careful, highly professional, discreet, and, above all, goal-oriented approach, so that a fair commission is not a problem for our customers. People are happy to pay for high-quality service.
Does the new law apply to all transactions or are there exceptions?
Sven Johns: It only applies if the buyer is acting as a consumer and not as part of a commercial activity. And it only covers the sale of single-family homes (including those with granny flats) and condominiums. In the case of multi-family homes, building plots, and commercial properties, it is still possible for the Agents to conclude a different contract Agents the seller than with the buyer.
What happens if sellers or buyers want the Agents to act Agents in their interests and not remain neutral?
Sven Johns: Then, Agents , they can continue to commission the Agents unilaterally. The agent will then agree on a pure internal commission as the seller's representative – or, in the context of a search request from the buyer, a pure external commission with the buyer. In these cases, the commission is paid solely by the party that Agents the Agents .
Michael Reiss: Many customers opt for this option precisely because it allows them to make optimum use of our expertise - including in purchase price negotiations. For sellers, for example, the time aspect often plays a role. They want us to estimate the marketing period in relation to the asking price. And for buyers, it is important to be the first to be offered suitable properties.
The interview was conducted by Klaus Meitinger / Private Wealth Magazine
