Real Estate Agent Commission: impacts of the change in law

Here's a little report on what we have experienced since the change in law back in June this year.

In general, the change in law said that from that point in time, ie. June 2015, the real estate agent is no longer allowed to charge a tenant his commission. The amount he usually charged in the past was 2,38 cold rents - quite a considerable amount. Its falling apart is a significant reduction of revenues and has put many real estate agents in financial difficulties.

The profession of a Real Estate Agent has not a very good reputation in Germany. They are perceived to provide extremly little service to those who pay them. And, rumours say that if you pay under the table you'll have a much improved chance to get the apartment of your dream. Since we started our Relocation Agency four years ago we have dealt with numerous real estate agents and encountered but two, who made comments that made us think they would appreciate some under the table money. The absolutely overwhelming majority are professional business men and women who took and take their responsibility to mitigate between landlord and tenant very seriously. However, the truth also is, that the main beneficiary of the services of a real estate agent is the landlord.

It has been much suspected that there will be a lot of black sheeps among the real estate agents which will try to claim the money from the tenant notwithstanding what the new law is stating. The margin for that is limited though. We have already highlighted a couple of practices in a recent post (just flip back to read them). A new idea was practiced by the real estate portal www.vermietster.de: they asked the potential tenant to sign a purchase contract for a welcome basket, where they basically bought a floor mat and a room spray for 299 EUR and they made it very clear that a tenant not buying it would not get any apartment they had on offer. This practice made it to the media and Florian Quast, the MD, quickly anounced that he will stop this and he even reduced the price for the welcome basket to 129 EUR. Well...

What we have seen more often is a stipluation in the general terms and conditions that says in case of a change in law or a court decision they retain the right to claim for the commission. Although it is unlikely that any court decision or change in law will happen in the near future, it still leaves the tenant in a limbo. We recommend to adress this with the landlord in an open and neutral discussion for which a good entry point would be the question if he is paying the real estate agent for its services. The point is, that the landlord, having paid the commission, has not much interest for any additional benefits the real estate agents seeks from the tenant. If he is paying a real estate agent he wants to receive proper service and should he be willing to give you his property he will have no problem with you agreeing with the real estate agent that such phrase is deleted.

For us relocators the change in law was creating difficulties, since we now have to deal with more private persons offering their apartment or house by themselves. The professionalism is mostly there, however, in some cases it is not and the landlords lack the advise of the real estate agent on how to present proper facts, the status an apartment should be handed over in, or the stipulations a lease agreement should comprise. Communication tend to take longer, landlords are more difficult to reach, visitation appointments are only possible when the landlord has time and individual appointments are difficult to get. However, all in all, we have not seen a significant impact on our business since most landlords know that our clients are usually very good tenants.

 

Posted in Accommodation.