Real Estate Brokerage Commission (Amount & Legal Basis)

The real estate agent’s commission (also known as the brokerage fee) is the compensation an agent receives for successfully brokering a real estate transaction-it is only due upon the conclusion of a valid purchase or lease agreement (performance-based principle). Since the 2020 real estate brokerage reform, clear legal regulations have been in place for the purchase of residential real estate regarding the division of the brokerage fee between the buyer and seller. The amount and due date of the brokerage fee are determined by the brokerage contract; in Bavaria, a total brokerage fee of 7.14% of the purchase price (including VAT) has become standard, which is split equally between the parties.

Legal Regulation Since 2020: The “Ordering Party Principle” for Purchases

With the Act on the Allocation of Brokerage Costs in the Brokerage of Purchase Agreements for Residential Real Estate (in effect since December 23, 2020, Sections 656a-d of the German Civil Code), the legislature has revised the cost allocation rules: Whoever first engages the broker (the client) may no longer impose more than an equal share on the other party to the contract. If the seller engages the broker and agrees to a seller’s commission, the buyer may be charged no more than the same amount (50-50 split).

Passing the entire commission on to the buyer is no longer permitted. In the brokerage of rental apartments, the “who commissions, pays” principle has been in effect since 2015: whoever commissions the real estate agent pays the agent. Since 2020, brokerage contracts with buyers must be concluded in writing (Section 656a BGB); verbal agreements do not give rise to a claim for commission. The buyer’s brokerage fee is only due once the seller has paid their share to the broker.

Commission Rates in Bavaria and Nuremberg

There is no legal cap on real estate commissions (except for rental brokerage); the market and competition determine the rate. In Bavaria, a total commission rate of 7.14% of the notarized purchase price, including 19% VAT, has become standard-equivalent to 3.57% per party when split equally. In other federal states (North Rhine-Westphalia, Hesse), a total commission of up to 7.14% is also common; in Berlin and Brandenburg, the total commission is often 7.14%, but is borne entirely by the buyer-which has not been possible for residential real estate since 2020.

The brokerage fee is only incurred upon conclusion of the contract (purchase agreement); it is not due if the contract fails, is contested, or is rescinded. The success-based principle protects buyers and sellers from commission claims for unsuccessful brokerage services.

Tax Aspects of the Brokerage Fee

For sellers, the brokerage commission is tax-deductible under certain circumstances: If the property is rented out, the commission is deductible as business expenses. In the case of a private sale with a taxable capital gain (sale within 10 years without owner-occupancy), the commission reduces the taxable capital gain. For buyers, the brokerage fee for rented properties counts as incidental acquisition costs and increases the depreciation base. For owner-occupied properties, it is not tax-deductible.

Brokerage Fees for Special Types of Transactions

In the case of foreclosures, no brokerage commission in the traditional sense is incurred, as the broker does not act as an intermediary in these cases. For bidding processes and off-market transactions, the same basic rules apply as for publicly marketed properties-the right to a brokerage fee arises upon the conclusion of the contract. In the case of sales following an inheritance, standard brokerage law also applies; special considerations arise from the community of heirs acting as the client.

Practical Tip for Property Owners in Nuremberg and Franconia

As a seller, you should read the brokerage agreement carefully: What specific services does the broker provide? Is there a repayment clause in case the purchase contract is rescinded? In Nuremberg, 3.57% buyer’s commission + 3.57% seller’s commission (total 7.14%) is standard market practice. We disclose all terms transparently-no fine print, no hidden additional costs. Feel free to ask us about our scope of services under an exclusive listing agreement.

Frequently Asked Questions

As a seller, do I always have to pay a brokerage fee?

No, that depends on the brokerage agreement. If the broker is engaged solely by the buyer and only a buyer’s commission is agreed upon, the buyer pays alone. If the seller engages the broker, a 50/50 split has been mandatory since 2020.

When is the brokerage commission due?

The brokerage commission becomes due upon the execution of the notarized purchase agreement (provided there is a causal link between the broker’s services and the conclusion of the contract). It is typically payable within 14 days of invoicing, i.e., shortly after notarization. The buyer’s commission is not due until the seller has paid their share.

What happens to the commission if the purchase agreement is rescinded?

In principle, the claim for the commission remains valid, as the broker has rendered their service (finding a buyer). Exceptions may be agreed upon in the brokerage contract; courts decide on a case-by-case basis in good faith. In practice, many brokers waive the commission or defer payment in cases of rescission through no fault of their own.

Can the brokerage commission be negotiated?

In principle, yes-the amount is freely negotiable. In practice, market rates are relatively stable. There is more room for negotiation with very high-priced properties. Important: Since 2020, the commission agreement with the buyer must be in writing.

Brokerage Fees for Rental Apartments

In the area of rental brokerage, the “principle of the party commissioning the service” has been in effect since 2015: whoever commissions the broker pays the fee. Since landlords typically engage brokers to find tenants, the landlord bears the commission-passing it on to the tenant is prohibited by law. The permissible amount of the brokerage commission for rental apartments is limited to two months’ net rent plus VAT (Section 3 of the Housing Brokerage Act). In practice in Nuremberg, however, the brokerage commission for rentals is often lower or waived entirely if the landlord finds tenants through their own networks or direct listings. The “buyer pays” principle does not apply to commercial real estate, so other arrangements remain possible in this sector.

Is the real estate commission subject to sales tax?

Yes. The commission rate of 3.57% per party specified in Bavaria and nationwide already includes the statutory sales tax of 19%. The broker’s net commission claim is therefore 3% of the purchase price; the 0.57% VAT is remitted to the tax office. For businesses eligible for input tax deduction (e.g., investors with commercial rental properties), the VAT can be claimed as input tax, which reduces the net cost. Private individuals and buyers not subject to sales tax bear the full brokerage fee, including VAT.

What applies to brokerage fee lawsuits - which court has jurisdiction in Nuremberg?

Brokerage fee lawsuits against buyers or sellers are generally filed with the Local Court or Regional Court of Nuremberg-Fürth, depending on the amount in dispute (up to 5,000 euros: Local Court; above that: Regional Court). The statute of limitations for brokerage fee claims is three years from the end of the year in which the claim arose (Section 195 of the German Civil Code (BGB)).

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