Estate agent commission & sales costs when selling real estate
A successful real estate sale needs to be well prepared – this also includes an overview of all costs incurred and the current legal situation regarding estate agent commission. If you want to sell a property privately, you should know who pays the estate agent’s commission since the new Estate Agents Act, what other sales costs you will incur and how to successfully negotiate the sales price. Below you will find a comprehensive guide with all the important information on estate agent commission and typical selling costs so that you are financially well prepared for the sale of your property.
Handing over the keys: Sellers incur various costs when selling a property, from the estate agent’s commission to official fees.
Broker commission since 2020: What does the new Brokerage Act say?
The new Real Estate Agent Act came into force on December 23, 2020. This stipulates a uniform nationwide distribution of the estate agent’s commission for residential property sales to consumers. Previously, there was a patchwork of regulations in Germany: In some federal states, buyers usually paid the commission alone, while in other regions sellers also paid it. The new law now provides clarity and abolishes the one-sided external commission. In concrete terms, this means
- If the seller commissions an estate agent, the seller and buyer must generally each bear half of the estate agent’s costs. A commission split (50/50) is now the standard. The buyer no longer has to pay the lion’s share alone, which should ease the financial burden on private real estate buyers.
- External commission (only the buyer pays) is not permitted, except in rare special cases.
- Internal commission (only the seller pays) remains permissible: The seller may voluntarily agree to pay the brokerage costs in full himself. In this case, the buyer pays nothing to the estate agent.
Important to know: The new regulation only applies to private residential properties. The law does not apply to the sale of commercial properties or to tradespeople (e.g. apartment buildings for investors). Here, the commission can be freely agreed. There are also special rules for rental properties (keyword: “Bestellerprinzip” for rentals, according to which the client pays the estate agent). For the classic private sale of a house or apartment to a buyer, however, the main change brought about by the law is that the buyer and seller share the brokerage fee fairly.
Who pays the estate agent’s fees and how much are they?
In practice, three commission models are possible under the new law:
- Seller pays alone – the seller commissions the estate agent and pays 100% of the commission. (This internal commission is the exception mentioned above).
- Buyer and seller share – only one party concludes the brokerage agreement, but the purchase agreement stipulates a 50/50 commission split. By law, the client must pay at least half himself; a maximum of half may be passed on to the other party.
- Both pay half each – both parties conclude a separate brokerage agreement and each pays their half of the commission directly to the broker. In this way, the commission is automatically split equally.
In almost all cases, the seller pays at least half of the estate agent’s commission. For private property sellers, this means that they have to budget for estate agent costs if they use an estate agent. It is no longer possible to sell residential properties completely “commission-free” (i.e. the buyer pays everything). However, the exact amount of the estate agent’s commission is not strictly stipulated by law – the usual regional figure is around 5-7% of the sales price, which is now split equally. In many federal states, around 3.0-3.5% of the purchase price plus VAT is common for each party. However, these percentages can vary depending on the region and market situation.
The exact commission rate is agreed individually in the brokerage contract. A good estate agent will set out their service package and commission transparently in the contract (written form is now mandatory). Pay attention to which services are included and compare them. Quality estate agents offer comprehensive services to achieve the best possible sales price: For example, professional valuations, high-quality exposés, 360° viewings, home staging, etc.. This service and quality justify the estate agent’s commission, as an experienced estate agent often achieves a higher sales price and takes a lot of work off your hands. Ultimately, a professional is worthwhile because they know the legal pitfalls and can guide you through the entire sales process efficiently and safely.
Tip: First have the value of your property assessed by an expert – e.g. with our free online property valuation, you will receive an initial price estimate in just 2 minutes. This way, you know what price you can aim for and can include the estate agent’s commission in your calculation.
Handshake after successful brokerage: Since the end of 2020, sellers and buyers have generally shared the broker’s commission when selling a property.
Typical selling costs: What expenses do sellers incur?
In addition to the estate agent’s commission, there are other costs that you should expect as a seller when selling a property. The good news is that most of the incidental purchase costs are usually borne by the buyer (e.g. notary and land registry fees as well as land transfer tax are usually paid by the buyer). Nevertheless, some costs are also incurred by the seller, especially to make the property ready for sale and to fulfill legal obligations. The following is an overview:
- Notary fees and land register: The purchase agreement must be notarized. The notary fees amount to around 1.5 % – 2 % of the purchase price. In practice, these fees are usually paid by the buyer. However, sellers should be aware that
deviating agreements can be made in the purchase contract. In addition, the seller must have any liens (mortgage/land charge) deleted, which also incurs fees (~0.2 % of the land charge). - Energy certificate: Sellers are legally obliged to provide the buyer with a valid energy certificate. The energy performance certificate costs around €50 – €500, depending on the type (consumption or demand certificate). Plan for this expense, as a missing energy certificate can result in fines. Our tip: Use our service to create your energy performance certificate online – quickly and legally compliant.
- Repair and renovation costs: In order to present your property attractively, minor repairs or renovations can be useful. Investing in repairs, repainting or garden maintenance often increases the sales value. The costs depend on the scope – calculate individually what is worthwhile. Sometimes homestaging measures or decluttering are enough to make a good impression.
- Marketing/advertisements: If no estate agent is commissioned, you must take care of marketing yourself. Online advertisements on real estate portals or advertisements in newspapers cost fees. Depending on the portal and the duration of the advertisement, this can range from €50 to a few hundred euros. These expenses are not incurred if an estate agent takes care of the marketing (as this is part of their service).
- Speculation tax: If you have a property that is not owner-occupied and the holding period of 10 years has not yet been exceeded, speculation tax may be payable on the profit when you sell it. Owner-occupied properties or properties that have been in your possession for more than ten years are exempt from this tax. Tip: If in doubt, consult a tax advisor to estimate possible tax costs.
- Early repayment penalty: If the property is still financed/loaned, you often have to pay a prepayment penalty to the bank if you sell early. This is usually up to 1 % of the remaining debt. Check your loan conditions – it may be possible to avoid the compensation, e.g. if the buyer takes over your loan.
- Appraisals and documents: In some cases, sellers have an appraisal carried out by an expert (costs approx. 0.5 % – 1.5 % of the property value), e.g. for properties that are difficult to assess. Fees may also be incurred for documents, e.g. extract from the land register, cadastral map or information from the building authority (usually low fees of around €20 – €50). Many estate agents provide support in obtaining the necessary documents as part of their service.
This list shows that selling a property entails various costs that you should plan for as a seller. Not all items apply in every case – some depend on your individual situation. For example, there is no speculation tax if you have lived in the property yourself for the last two years plus the year of sale (it is then considered owner-occupied). And, of course, estate agent fees only apply if you instruct an estate agent. All in all, it is better to plan generously and, if in doubt, seek advice on which costs are relevant in your case.
House, keys and euros: Various costs – from official fees to renovations – should be taken into account when selling a property.
Negotiating the right sales price – tips for private sellers
It is one thing to realistically estimate the value of your property – it is quite another to be able to achieve it on the market. Private real estate sellers are often faced with the question: “How do I start the price negotiation? Is it better to set a slightly higher price and have room for negotiation, or set a low price and hope for lots of bids?”
Avoid the common mistake of setting the offer price too high. Of course, every seller wants to achieve the best possible price. However, an exaggerated starting price deters prospective buyers – the offer appears dubious and may remain on the market for a long time. Instead, it has proven to be a good idea to start with a moderate price in line with the market. This can be just above the value determined by experts, but still offers room for negotiation.
A price that is perceived as fair usually leads to more interest and quicker deals, often without endless rounds of negotiation. In highly sought-after markets, it can also be a strategy to set the price slightly below the market value in order to attract many interested parties who may then outbid each other – but this tactic requires careful consideration and depends heavily on the market situation.
It is important that you go into price discussions confident and prepared. Know the weak points of your property (e.g. need for renovation, disadvantages of location) and be open about them. This will take the wind out of the sails of prospective buyers, as you will have already taken obvious defects into account in the asking price. At the same time, make a strong case for the advantages and value of your property – back up your price by referring to a recent valuation or comparable sales in the area, for example.
Keep in mind: Price negotiations can be time-consuming and stressful, especially if you are inexperienced. Don’t get involved in “last minute” discounts or rushed decisions. Your advantage as a private seller is that you shouldn’t be under pressure to sell – focus on a well-prepared process rather than rushing things.
Professional support is particularly worthwhile during negotiations: An experienced estate agent knows exactly how to negotiate with prospective buyers in your interests. They know the usual tactics and will find the right words to get the price you want. In addition, an estate agent filters out serious buyers and only allows serious negotiations. If you are unsure whether you want to negotiate the price on your own, it is not a sign of weakness to call in a professional – on the contrary, it can be financially advantageous.
Conclusion: Start the real estate sale well informed
As a private seller, you should definitely consider the estate agent’s commission and sales costs when selling a property from the outset. Since the new Real Estate Agent Act 2020, it has been clearly regulated who pays the agent’s commission – as a rule, the buyer and seller share the costs. In addition, although there are fewer incidental purchase costs for the seller than for the buyer, items such as an energy performance certificate, any repairs, ongoing loans or listing costs should be factored in. With a realistic offer price and good preparation of the documents, you create the best conditions for selling your property quickly and at the best price.
Are you unsure what your property is currently worth, or would you prefer to leave the sales process in experienced hands? Feel free to contact us for a personal sales consultation! At ADEN Immobilien, we support you from the professional property valuation to the closing at the notary’s office. Get in touch with us now – we are here to help and advise you so that your real estate sale is a complete success.
Frequently asked questions about property viewings
As a rule, a viewing takes between 20 and 45 minutes – depending on the size of the property and the interested parties’ need to talk. It can also take longer if there are specific questions or if the property has many special features.
Not mandatory – but useful. Many prospective buyers appreciate it when the owner can answer questions about the property directly. Alternatively, an estate agent can take over the viewing professionally and act as a neutral contact person.
Genuinely interested parties ask specific questions about the property, financing and the further process. If a financing confirmation or a purchase date is already mentioned, this is usually a good sign. An experienced estate agent can also filter out who really wants to buy through preliminary discussions.
Yes, this is even recommended. Valuables, private documents or very personal items should be securely stored or removed to protect both your privacy and security.
This is very individual. Sometimes the first viewing leads to a sale, sometimes it takes several appointments. It is important not to sell prematurely, but also not to let any genuine interest in buying pass. An estate agent will help you to recognize the right time.
Depending on the effort and preparation involved, it usually takes a few days to a week to prepare an exposé. This includes the property survey, photos, text creation, home staging if necessary and graphic preparation.
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