• Daniel Hofmann

Who is going to be responsible for Estate agent fees?


Times are changing… the german government would like to start regulating the German estate agent fee market a bit more.


What seems to be a great development, may not be after all.

The big coalition (SPD and Union) has agreed, that for the first time ever, regulations will apply as to who has to pay what when buying a private property in Germany.


Until now, generally speaking, the buyer had to fork out all money for estate agency services. In Germany that is no mean feat, if you are looking at a fee of about 6-7,14% of the purchasing price for these services. With rising costs of real estate in Germany this can easily add up to several thousand if not ten thousand Euros. Additionally one has to also pay Notary fees, tax, mortgage set up cost etc.


So if the German government eases that burden, that is a plus, right?

Right, so what does the proposal from the big coalition actually entail?


First of all the associated costs when buying a property in Germany are supposed to be reduced. That is the easy part. The second part, over which the Government is still deliberating, is how this is going to look like in detail.


The aim is that the person who DID NOT contract the estate agent first will never have to pay more fees than the person who actually contracted the estate agent first. In short, this means the buyer never has to pay more than the seller for estate agent fees. So in a worst case scenario, buyer and seller have to pay equal amounts of fees.


Quite often, most, if not all fees are paid for by the buyer. In order for Estate agents not to agree special deals with the person who has contracted the agent first (the seller) will have to prove via bank statement or similar to the buyer what they have paid to the estate agent before the buyer has to pay their fee.


So will this work? Opinions are divided.

Some say the market will become more buyer friendly, especially for first time buyers who were slow to enter the market due to these high associated purchasing costs. Others say that it will make no difference at all, as there will be more kick backs for sellers whereby they get part of those fees back from the estate agent to secure the sale.


So let's watch this space.

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