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Do you want to buy an apartment?
Wait a few more days.
From Wednesday it will be ten thousand euros cheaper in many places.
You can save that at the broker.
No, this is not a consequence of the corona pandemic.
It is the result of a law on the distribution of brokerage costs that the Bundestag passed in the spring.
Interestingly, with the votes of the governing coalition, with abstentions from the Left Party and against the votes of the Greens.
If it had been up to the Greens, brokerage fees should in future only amount to a maximum of 2 percent of the purchase price, including VAT - as in the Netherlands.
Currently around 7 percent, more precisely 6 percent and VAT, i.e. 6.96 percent until New Year's Eve and 7.14 percent from New Year's Eve are currently common.
What do brokers actually do and how do they earn their money?
Answer: You help with the sale or purchase of an apartment or a house.
In a better case, the real estate agent will first help you find the right apartment or house for your budget and your needs.
If that works then, they pay him a commission.
This is called the broker's commission and so far has often been this 6 percent of the purchase price plus VAT.
For an apartment for 300,000 euros, more than 20,000 euros.
Much more often than buyers today, sellers of an apartment or a house hire the realtor - to hand over the work and get a better price.
The broker then takes care of prospective buyers, manages the viewings and hopefully ensures a solvent buyer.
And currently he also ensures that the buyer - in most parts of Germany - also pays the bill.
Between 40 and 60 percent of the apartments in Germany are sold in this way, say realtors and the Federation of German Consumer Organizations.
In big cities more like 80 percent.
Billions for commissions
180 billion euros were turned over with residential real estate in 2018, so several billion in commission were paid.
In many federal states, the brokerage fee is historically divided in half, at least officially.
In Berlin, Hamburg and Hesse as well as in Brandenburg, Lower Saxony and Bremen, however, this has never been the case.
Buyers practically paid alone.
This is no longer permitted from December 23rd.
The Christmas present from the grand coalition for consumers stipulates that the buyer must pay a maximum of half the brokerage fee to the broker.
As long as the buyer is buying for residential purposes and is not traveling commercially.
In our case, around 10,000 euros.
And only after the seller has paid his 10,000 euros.
If the seller originally hired the broker and there is no separate agreement, it could even happen that the seller pays the invoice in full.
This is called the ordering principle and has been in effect for several years for brokers who sell rental apartments.
And even the scientists at the IW, the Institute for German Economy, actually consider this to be the best option.
Because then the person responsible for the service pays for it.
And he has an interest in low prices.
When someone else pays the bill for the seller, this interest is no longer great.
The broker's new logic
Not the best of all worlds yet, but the new law definitely sounds better and fairer than what we have before.
And it changes the logic of brokers.
So far, just like the seller, a broker has primarily been interested in a particularly high sales price: the brokerage, i.e. payment, increases with the price.
10,000 euros more sales price currently brings 600 euros more commission plus VAT.
It's worth it.
The seller was not interested in the higher brokerage fee.
Brokers' urge for high prices was only curbed when the higher price was difficult to achieve.
So significantly more viewing appointments required.
It is precisely for this reason that most home buyers consider the broker to be a member of the opposing team.
And an expensive one too.
One that gets a lot of money for very little visible work.
Can things get better now with the new law?
I guess so.
If the seller has to pay too, he doesn't want a broker who takes a long time to sell for little more money.
Occasionally, large brokerage firms actually go into the battle for everyday customers with significantly reduced prices.
Homeday, for example, only wants to collect a total of 3.9 percent from sellers and buyers, including VAT.
In our example, the buyer would only have to pay just under 6,000 euros instead of over 20,000.
But the seller would also have to shell out 6,000 euros first.
Big brokers Engel + Völkers and LBS Nordwest want to continue to hold on to the 6 percent for the time being - of which both parties will each pay 3 percent in the future.
The brokers are of course grumbling.
The new law is an »encroachment on the freedom of contract«, so the broker association IVD at the hearings on the law.
Even if wise broker representatives admit in conversation that the costs of the brokerage fee have shifted unfavorably towards the buyer over the years.
Housing is not just a market.
Everyone must be able to live, and not everyone can afford this type of market.
In extreme cases, such a market understanding leads to abuse.
Although in some federal states, as already mentioned, half the brokerage fee is already provided when selling a house, buyers in all these countries pay significantly more than half on average.
The brokerage firm Homeday determined this from real estate advertisements.
In the federal states in which buyers should actually only pay half the brokerage fee by default, their share is often much higher, in eastern Germany an average of 75 percent.
Indeed, the housing market in Germany has been tense for at least ten years.
Real estate prices have also been going through the roof for ten years.
The owners and the brokers benefit.
The brokers recently achieved one sales record after the next.
And the number of brokers rose from 30,000 to 35,000 from 2017 to 2018 alone.
You do not need any special training as a broker.
That is why new brokerage booths were springing up all the time.
Buyers had to pay for it.
In fact, the best solution would of course be to pay the broker based on the effort - or as a fixed amount.
And in such a world, seller and buyer could share the price.
On the one hand, the seller has an interest in the highest possible price.
But if the broker has to put in too much effort and therefore demands more brokerage, this reduces the proceeds.
A high brokerage fee scares off buyers anyway.
A fair-priced provider who sells quickly would also generate lower brokerage fees.
Everyone benefits.
Even the successful broker.
Because even in this model, a quick deal earns money quickly.
The incentive to hang out becomes less.
A € 10,000 higher price might only bring you € 200 more brokerage fee.
The new law will come into force next Wednesday.
If the broker's commission also falls overall, the purchase of a property may be even cheaper.
It is definitely worth taking a closer look.
A look at other EU countries is appealing.
At the moment the quota of German citizens living in their own four walls is lower than anywhere else in the EU.
If you want to go out now as a buyer, then I have two recommendations for you:
Look for direct contact with the seller.
He now has a great incentive to sell to you even without expensive brokers.
Prepare your financing for this well.
Knowing exactly how far to price to go will make price negotiations a lot easier.
This can be done, for example, with a finance calculator like the one used by my colleagues at Finanztip.
And two recommendations to sellers:
The simple time with the broker that the buyer pays is over.
But competition among brokers offers new opportunities.
You can also get offers from various national brokers.
Cheap providers are currently trying to open up the market.
And then ask the local agent you trust if they'll go along.
Also consider the possibility of doing the sale yourself.
You can then share the avoided costs of the broker's brokerage with the buyer.
Between the years there is a little time to think about the right strategy for your own plan.
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