The brokers collect too much | EUROtoday

IYou must be an actual property agent. They do a whole lot of enterprise in Germany after they assist promote a home. In Germany you now often pay a fee of simply over 7 p.c, together with taxes.

Before 2020, property consumers usually lined the whole price of the intermediary. Then the federal authorities modified the regulation. Since then, consumers and sellers have needed to pay the identical share of the fee. The legislator hoped that usually decrease fee charges would prevail. If the vendor has to formally pay not less than half of the fee, he would have a visual incentive to barter a smaller fee.

Hardly anybody negotiates

However, this didn’t occur, reveals an as but unpublished examine that’s accessible solely to the FAS. “Where many brokers previously demanded four or five percent from the seller, excluding taxes, they now often demand three percent from both the buyer and the seller,” says examine creator Julius Stoll from the Hertie School in Berlin.

For his examine, he analyzed 500,000 ads on immobilienscout24.de. Since the regulation on the distribution of brokerage prices got here into power, shoppers have paid an extra round 390 million euros yearly to actual property brokers.

But why are dealer commissions nonetheless excessive in Germany? One assumption economists made was value fixing. However, Stoll counters: “There is definitely no market that must be as aggressive as the true property agent market. In Germany you principally solely want a cellphone and a enterprise license to turn out to be a dealer. Even in very rural areas, sellers have a big choice of brokers. Explicit value agreements due to this fact appeared unlikely to him.

Stoll due to this fact centered on the conduct of the sellers. The commissions have all the time been freely negotiable, and there are additionally some brokers who promote with decrease commissions, however: “In order for brokers to compete with each other on prices, sellers would have to prefer brokers with lower prices,” says Stoll. A survey he performed for his dissertation amongst greater than 1,000 actual property brokers confirmed that 85 p.c of actual property sellers didn’t even negotiate the fee.

A deceptive guideline

Stoll discovered a motive for this passivity in direction of the worth in a German actual property market peculiarity – the “local commission”. This advertising and marketing label from the brokers suggests a mean native value to potential prospects. But the precise common fee is beneath the so-called native customary, the examine discovered. And the brokers know that too. The examine means that “real estate agents influence sellers by using the ‘local’ commission as a misleading benchmark.”

Stoll explains one other rationalization for the truth that only a few actual property sellers negotiate the dealer’s fee as follows: The sellers would possibly suspect that brokers can obtain the next gross sales value. They due to this fact settle for a excessive fee and don’t negotiate in any respect.

The investigation confirmed that the dealer’s assumption of a better value might be improper: The 500,000 on-line ads that Stoll examined present that homes which can be offered instantly by non-public people often have greater costs than ads which can be offered by had been listed by a dealer. “It seems to be a misconception that brokers can consistently achieve higher sales prices that compensate for high commissions,” says the examine creator.