Christmas is nearly upon us and with that a few changes are coming into effect and one major change is the way estate agency fees will get paid for in the future. Until now, there were several different options as to who is responsible for paying the estate agent fees (depending on where in Germany you are purchasing the property). Quite often the property buyer had to fork out all the fees for the real estate agent and their services. In Germany, costs can range between 6-7.14% of the purchase price of the property and this could easily add up to a several thousands of Euros on top of the purchasing price and the other associated costs.
From 23. December 2020, the German government has decided to change this inequality across Germany by implementing the new law “of distribution of estate agent fees when facilitating sale contracts for flats and family homes” (Gesetz über die Verteilung der Maklerkosten bei der Vermittlung von Kaufverträgen über Wohnungen und Einfamilienhäuser).
The new estate agent fee rules:
- The person who instructs the estate agent will have to pay the estate agent fee (entirely).
- However, it is possible to pass these costs partially onto the other party if there is an agreement but only up to a maximum of 50% of the total costs.
- Additionally, the person who instructed the estate agent has to prove that they have paid the estate agent fee before they can request that the other party pays their share.
- These new rules only apply if the purchaser acts on a private basis. Should the purchaser buy the property on a commercial basis, the old rules still apply and the estate agent fees will have to be paid for by the buyer.
- Surprisingly, until now it was possible to instruct an estate agent verbally and it would be binding. With the new law this is no longer possible and an agreement has to be made in writing – though a simple email would suffice.
The new law will come into effect from the 23 December and if you are thinking about buying a property in Germany and you are not entirely sure as to what to expect in terms of fees and regulations we are here to help.
