A brokerage fee is the commission to be paid to the broker when the broker successfully offers, advertises and sells or rents a property on the property market.
Until 2015, the brokerage fee had to be paid mostly by the buyer or tenant of a property. The brokerage fee is only payable if a valid purchase or rental contract is concluded. The broker works on the principle of success.
When does who pay the brokerage fee?
Since June 1, 2015, the so-called ordering principle applies to broker brokerage, according to which the person who commissions him must pay for the broker’s services. This means that the apartment owner pays the brokerage fee if he instructs the broker to rent it in the form of a contract.
The prospective tenant, on the other hand, pays when he in turn gives the broker the job of looking for a property for him. In this case, he is the ordering party of the broker and must take over the brokerage commission.
- A special case exists when the broker has a property in his portfolio and offers it to a prospect who has commissioned him with the search. Since the broker has already received an order from the owner and therefore has the property in his portfolio, he may not demand brokerage from two parties. In this case, it is not the prospect who has to pay the brokerage fee, but the owner.
However, the ordering principle only applies to rentals of residential properties. When buying a property or renting commercial space, the previous rules apply.
What is legitimate self-interest?
This special case, in which there is no brokerage fee, occurs if, for example, the broker manages a property or is the owner of the property that he offers to buy or rent. Since he earns money anyway if he completes the course successfully, no commission is required.
What is the brokerage fee?
There are no legal regulations for the amount of the brokerage fee and can be freely negotiated by the parties. It depends on several factors:
- Market situation
- Purchase price
- Rental price.
It is not uncommon for the brokerage fee to be between 3 and 7.5 percent of the price in the purchase contract. The Housing Mediation Act (WoVermRG) applies to rental contracts. According to this, the brokerage fee may not exceed two months’ rent (plus 19% VAT). This can be read in § 3 sentence 2 WoVermRG (also referred to as the law regulating housing brokerage). The brokers usually determine the amount depending on the rates that are customary in the respective federal state.
It can be worth negotiating with the broker about the amount of his commission. He always has a certain amount of leeway and before he doesn’t earn anything he is certainly willing to reduce his brokerage fee.
Since the brokerage fee only arises after the successful completion of the property purchase or rental, advance payments to the broker are not to be made. Paying cash to the broker when viewing the apartment should also be treated with caution.