Broker property privately – You know 1) a property that needs to be sold and 2) a buyer? Now you have the idea that you could broker the property and collect the broker’s commission. But is that possible? The sale of a property follows a fixed procedure, from the property exposé to the sales phase to the viewing, negotiations, notary appointment, purchase contract and paying the bills, the notary, estate agent and land transfer tax. Read more about all 3 phases here: Selling Property. The fact is, even if you are not a real estate agent, you may take a commission for brokering a property. The important thing is the motto: Only those who write, stay. Therefore, a look at the process of mediation and the brokerage contract, which you must also have as a private person to be entitled to commission.
Procedure: Real estate brokerage (private) of house & apartment
You have the chance to broker a property, but you are not a real estate agent? With the one-time mediation of a property this is no problem at all.
PS: This article is an overview. Please inform yourself in detail about specific cases.
Any responsible citizen is allowed to make contracts, even when brokering a property. There are a few limits that make you a commercial trader, which I have written about many times on the blog. To put it quickly: privately you are allowed to broker a maximum of 3 properties in 5 years, even without a trade licence. The latest information on the law can also be found here: Commercial real estate trade (external).
Basically, the motto described in the introduction applies:
Only those who write remain
So, as always in the business world, put everything in writing.
Procedure and checklist: Seller, buyer, purchase contract
This article is meant to give you a quick, short checklist.
Internal commission and external commission explained
When selling a property, there are two types of brokerage commission. If the seller pays the broker’s costs, this is called “internal commission”. If the buyer of the property pays, it is called “external commission”.
- Internal commission: Seller
- Outside commission: Buyer
Your client is, as a rule, either the seller or the buyer.
Brokerage agreement for brokerage commission: sample (free of charge)
Now the brokerage contract comes into play. In order to be entitled to a brokerage commission later on, you must have a written proof, the brokerage contract.
You can get good and free sample templates from the various chambers of industry and commerce (IHK). For example, here:
It must be clear from the agreement or the contract that you, as the agent, have offered/provided the property. A corresponding broker’s commission will then be due.
How much is the broker’s commission?
Broker commission for private purchase – Many things are extremely regulated in Germany, but it was different with the broker commission. Who has to bear the costs for the broker, was clear in most cases, the buyer of a property. In the new year changes a lot, because for the first time, the distribution of the brokerage commission between buyer and seller of a property, is clearly regulated by the legislator. What is in the new law on the broker’s commission? Here is a quick insight:
A whole 3, 5, 7 %, just for mediation?!
In the link to the broker’s commission you have already learned something about the amount of the commission. The more expensive the property, the lower the rate. For properties over 10 million, the rate is also less than 3%. So that you really get a commission in the end, stay fair from the beginning.
Agents get 3%, 5% or 7% because they do a lot of tasks, in the whole process of selling real estate.
As a professional partner, you move on. You are present during the whole process, at least in the CC of the correspondence. It is also about bringing the interests of the seller / buyer together. In addition, I have to advertise the property – only “interest” does not ensure that the potential buyer will actually buy. If buyer and seller agree, they arrange the rest, around notary date, which notary, purchase contract, etc. themselves. Brokers are still in the CC.
The last appointment is then the certification, the “handshake” afterwards. Then I have earned money and can present the bill.
Purchase contract: Passus object mediation
Broadly, should be in the bill of sale,
Property brokerage came through broker XY, commission amounts to XY, is due with effectiveness of the contract. If CT effective, commission due automatically.
Conclusion: Mediation, Contract, Coutage
With a private mediation, be always clear, as an agent (broker), you are always the weakest link in the chain. You make “only an exposé” and then get “so much money”. Therefore, it is all the more important that you hold everything in writing before the owner announcement and viewing, also in the purchase contract.
Here again the links to the free sample templates of the various Chambers of Industry and Commerce (IHK).