Brokerage fee

Brokerage Fee - The brokerage fee, also known as a real estate agent’s commission or agency fee, is the compensation a real estate agent receives for successfully brokering a purchase or lease agreement. Since the new legal regulations took effect in December 2020, the brokerage fee for the purchase of residential real estate is generally split between the buyer and the seller.

Legal Regulations and Commission Sharing

With the entry into force of the Law on the Distribution of Brokerage Costs (Sections 656a through 656d of the German Civil Code (BGB)) on December 23, 2020, the legislature fundamentally restructured the distribution of commissions for the purchase of apartments and single-family homes. The core of the regulation is § 656c BGB: If the real estate agent acts on behalf of both the buyer and the seller (so-called dual agency), the brokerage fee must be borne in equal parts by both parties. Any agreement to the contrary that places the burden on the buyer is invalid.

If, on the other hand, the real estate agent is engaged by only one party, they may pass on the commission to the other party only if they demand at least the same share from their client (Section 656d of the German Civil Code). The client must therefore always bear at least half of the total commission. For the buyer, the share to be paid becomes due only after the client has demonstrably paid their share.

This rule applies exclusively to residential real estate and only if the buyer is a consumer. For commercial real estate, multi-family homes as a whole, or land without residential development, the new regulations do not apply, so the commission remains freely negotiable in those cases.

For lease agreements, the so-called principle of the party commissioning the agent has applied since 2015: whoever commissions the real estate agent pays the commission. In practice, this is almost always the landlord when renting an apartment. The rental commission amounts to a maximum of two months’ net rent excluding utilities, plus VAT.

Commission Amount and Conditions for Payability

The amount of the commission is not legally fixed in Germany but is based on market practice. In Bavaria, a total commission of 7.14 percent of the purchase price including VAT has become standard for real estate purchases, with the buyer and seller each bearing half, i.e., 3.57 percent per party. For a purchase price of 400,000 euros, this amounts to approximately 14,280 euros per party.

For the real estate agent to be entitled to the commission, several conditions for payment must be met: First, there must be a valid brokerage agreement, which, since December 2020, must be in written form for residential properties. Second, the broker must have provided a causal brokerage or referral service, i.e., established contact between the parties or identified the property. Third, a valid main contract (purchase or lease agreement) must have been concluded. If any of these conditions is missing, there is no entitlement to a commission.

Commission Overview by Property Type and Market Segment (Bavaria, approx. 2024)

Property Type	Buyer/Consumer?	Total Commission	Buyer’s Share	Seller’s Share	Legal Basis
Condominium / Single-family home (Buyer = Consumer)	Yes	7.14% incl. VAT	3.57%	3.57%	§ 656c BGB (Obligation to split equally)
Condominium / Single-family home (Buyer = Business)	No	Freely negotiable	Free	Free	§ 652 BGB
Multi-family home (entire building)	No	3.57-7.14%	Free	Free	§ 652 BGB
Commercial property / Land	No	Freely negotiable	Free	Free	§ 652 BGB
Rental apartment (buyer-pays principle)	-	Max. 2% of service charges + VAT	0%	100%	§ 2 (1a) WoVermG

Calculation example: Condominium in Nuremberg-Maxfeld, purchase price €350,000: Total brokerage fee €24,990 (7.14%); buyer and seller each pay €12,495 (3.57%).

Practical Tip for Property Owners in Nuremberg and Franconia

In the Nuremberg metropolitan region, splitting the brokerage fee 50/50 for residential properties has been the standard practice since the legal reform. We recommend that sellers clearly stipulate the commission arrangement in the brokerage contract before marketing begins to avoid later disputes with prospective buyers. Since the brokerage contract for residential properties must be concluded in writing, a verbal agreement is no longer sufficient and renders the commission claim invalid.

For buyers in Nuremberg and Franconia, it is important to know that their own share of the commission is only due once the seller has demonstrably paid their share. We provide our clients with the relevant documentation transparently and ensure a smooth process for commission settlement.

Frequently Asked Questions

Can the brokerage fee be negotiated?

In principle, yes, because the amount of the brokerage commission is not fixed by law. The standard market rate of 3.57 percent per party in Bavaria is a guideline, not a requirement. In practice, the scope for negotiation depends on market conditions, the property value, and the scope of the broker’s services. We recommend openly discussing the commission amount before signing the contract and clearly documenting it in the brokerage agreement.

When is the brokerage fee due?

The brokerage fee becomes due upon the execution of the notarized purchase agreement, provided all conditions for payment have been met. In the case of a 50-50 split pursuant to Section 656c of the German Civil Code (BGB), the broker may only demand payment of the buyer’s share once the seller has demonstrably paid their share. In practice, the standard payment term is 14 days after the invoice is issued, unless a different term has been agreed upon in the brokerage contract.

Does the commission split also apply to multi-family homes?

No, the legal obligation to split the commission equally under Section 656c of the German Civil Code (BGB) applies only to the purchase of apartments and single-family homes by consumers. The regulation does not apply to the purchase of multi-family homes as a whole, commercial properties, or undeveloped land. In these cases, the brokerage fee can still be freely agreed upon between the parties, meaning that in practice, commissions paid solely by the buyer or seller remain possible.

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