What are the effects of legally regulated brokerage commissions for buyers and sellers?

What are the effects of legally regulated brokerage commissions for buyers and sellers?

Since December 2020, a uniform brokerage law has been in force throughout Germany. Put simply, the broker may no longer demand a unilateral commission from the buyer. He must receive at least the same brokerage commission from the seller. However, the broker may only agree on a pure internal commission with the seller. Also, the buyer can commission the broker directly, with a search request. The broker then goes in search of a property that he himself does not have in his portfolio and then mediates it to the buyer.

Pure Internal Commission

Almost always we have agreed on a division of the commission with our customers. In Berlin, Brandenburg and Saxony, the amount of 3.57% including VAT has become established. Our offer of a pure internal commission has occasionally only been chosen by property developers and professional sellers, less by private sellers.

Pure Fee Consulting Commission

Our offer of pure fee consulting has hardly been accepted by sellers. Fee-based advice is like the remuneration of a lawyer. This means that the seller pays the broker according to daily or hourly rates or agrees a fixed price with the real estate agent. This can be significantly cheaper than a brokerage commission but is incurred in any case. So even if the desired purchase price has not been achieved or if the property has not been sold.

We have now seen the emergence of new online companies, who are funded by established sister companies with massive funds who sometimes offer slightly cheaper commission rates and this works for some sellers, it just depends what you are looking for.  In such a crowded market, in-time the property market reach saturation and we will see if online is the way to go, or if property sellers in Berlin and internationally prefer the personal touch. In any case, many start-up brokers or so-called hybrid-brokers have already disappeared from the market.

Certainly, the customer is the winner as there are many options available.

Unfortunately, the search requests have hardly prevailed. Too few prospective buyers are looking for a broker who will then find you a property. This is also due to weak broker networks in Germany, especially compared to the MLS (multi-listing system in the USA) there is still a lot of catching up to do in Germany at this point.

There was also the concern by many providers that the seller won’t hire a broker if it costs money directly, previously this was supposedly “free”. We could not observe this effect. Yes, there are still pure private sellers who want to sell without a broker, but from our perception this group has not grown due to the new distribution of commissions.

If you are unsure whether a broker is worthwhile, you usually talk to several property agents in Berlin, and other sellers and compare the reviews and references on the Internet. Often, just like many professional colleagues, we can convince owners of our added value as established real estate agents with a lot of local experience.

It was the case before 2020 and is still the case today: The good real estate agent only benefits if his customers, i.e. the seller and the buyer of a property, have achieved their goals. If the broker does not manage to bring both parties together, he does not charge either party any money.
The reputable broker therefore promotes the property at their own cost in advance and entirely at their risk, because the seller may pull out. This is a very good sign for sellers and buyers and the real estate market and tens of thousands of customers confirm this again and again: Reputable, qualified, and fair real estate agents who help people to own a home are remunerated in a success-oriented manner with a fair and appropriate commission.

Since the change in brokerage law, we have negotiated well over 300 properties. We feel that telling you this will give you the trust that we know what we are doing and able to advice you on which commission option is best for you.

We have been established as an independent property agent in Berlin since 1991 so we have seen a lot of companies come and go along with changes in rules and regulations. As a family business we pride ourselves on our honest expert advice and friendliness. We always go that extra mile to ensure customer satisfaction, and because of this our customers come back to us again and again.

If you have any questions about remuneration models, services and commissions of a real estate agent or marketing channels of your property, please contact us or arrange a personal appointment with us.

Achim says it can be reworded into an English format. The cheap commissions are those like purple bricks. Sellers and buyers now pay the same amount. Commission is negotiable. I can make it more clear that if you use BLP you are dealing with a family business that has been around for a long time and sold many properties. People use them again and again because of their reputation of friendly, competitive, professional, efficient

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