Commission (Real Estate Brokerage)

Commission (real estate brokerage law) is the performance-based fee that a real estate agent receives for facilitating the conclusion of a purchase or lease agreement. The right to commission arises only when the main contract is validly concluded and the broker has provided the causal brokerage or referral services for it. Since December 23, 2020, the Law on the Division of Brokerage Commissions has applied to purchase contracts for residential real estate, ensuring that buyers and sellers generally bear the commission in equal shares.

Legal Basis for the Commission Claim

The brokerage agreement and the commission claim are governed by Sections 652-654 of the German Civil Code (BGB). The claim requires that a valid brokerage agreement exists, that the broker has provided a referral or brokerage service, and that the main contract was concluded as a result of this activity (causality). If even one of these conditions is missing, the claim lapses. Causality, in particular, is often disputed in practice: if the buyer was already aware of the property from another source, the commission claim may fail.

Amount of the Brokerage Commission in Germany and Bavaria

The brokerage commission is not uniformly set by law but has become established as standard market practice. For real estate purchases, the total commission in Bavaria is typically 3.57 percent (including 19% VAT) per party, amounting to a total of 7.14 percent of the purchase price. Since the 2020 reform, the seller may not agree to a buyer’s commission higher than their own commission share. For rental brokerage, the “principle of the party commissioning the agent” applies: whoever commissions the agent (usually the landlord) pays the commission-up to a maximum of two months’ net rent plus VAT.

When does an agent forfeit their right to a commission?

The right to a commission may be forfeited if the real estate agent breaches their fiduciary duties-for example, if they act simultaneously for both the buyer and the seller without disclosing a conflict of interest (dual agency without permission), if they act with fraudulent intent, or if they withhold information that would be crucial to the client. Subsequent contestation of the main contract also generally results in the loss of the right to commission, as the contract is deemed never to have been concluded.

So-called dual agency-that is, the simultaneous representation of both parties-is generally permitted if both sides agree (Section 654 BGB by analogy). In practice, this means: The broker explicitly informs both parties of the dual agency and obtains their consent. Without this disclosure, the broker completely forfeits their commission claim against both parties. Reputable brokers therefore always regulate dual agency transparently and in writing.

Practical Tip for Property Owners in Nuremberg and Franconia

Anyone wishing to sell a property in Nuremberg or the metropolitan region should document the brokerage contract and commission agreement in writing and read them carefully-especially the provisions regarding the term, the exclusive listing, and any expense reimbursements in the event of termination. In our contracts, we clearly outline the services we provide and the commission incurred-so there are no surprises after a successful sale. Especially for high-priced properties in the Nuremberg metropolitan area, it’s worth comparing options: A professionally managed sale often achieves a significantly higher purchase price than a private attempt, so the commission is more than offset financially. We work exclusively on a success-based fee structure-no commission, no sale.

Brokerage Agreement: Exclusive Listing vs. Standard Listing

In real estate brokerage law, the distinction between a simple brokerage mandate and a qualified exclusive mandate is of considerable importance. With a simple mandate, the owner may work with other brokers in parallel and also market the property themselves-the commission is only due to the broker whose brokerage services were actually the cause of the sale. With a qualified exclusive agency agreement, the owner commits to marketing the property exclusively through this one agent. In return, the agent invests more resources in the marketing: professional photography, home staging, paid advertising, and actively reaching out to pre-registered prospective buyers.

For sellers, the exclusive listing agreement offers the advantage of a clear, professionally coordinated marketing strategy. In contrast, having multiple agents list the same property on different platforms can give the impression that the property is difficult to sell-which depresses the achievable price. Those who choose their agent wisely generally fare better with an exclusive listing agreement.

Commission in the Event of a Failed Sale

If the purchase contract does not come into effect after signing-for example, because the buyer cannot secure financing or the contract is invalid due to a formal defect-the agent’s claim to a commission generally lapses. This also applies if the main contract is later contested. Exception: If the buyer is personally responsible for the contract not being executed (e.g., withdrawal without cause after the notary appointment), the real estate agent may, under certain circumstances, claim damages from the buyer. Sellers should therefore ensure that no expense reimbursements or minimum fees have been agreed upon in the brokerage contract in the event of a failed sale.

Frequently Asked Questions

As the seller, do I have to pay the broker’s commission if I found the buyer myself?

If a valid exclusive agency agreement exists with the broker and the broker has already provided brokerage services, the commission claim may still apply-even if the seller happens to acquire the buyer on their own. In a simple brokerage agreement without an exclusive mandate, no commission claim arises if the broker was not instrumental in the conclusion of the contract.

Is the brokerage commission tax-deductible?

When purchasing a rented property, the brokerage commission can be capitalized as incidental acquisition costs and depreciated over the useful life of the property. When purchasing an owner-occupied property, it is not directly tax-deductible but increases the acquisition costs, which may be relevant in the event of a later taxable sale.

What applies to brokerage contracts for rental apartments?

Since the introduction of the “buyer pays” principle (in 2015), the party who commissioned the broker pays the commission for rental brokerage services. If the landlord hires the agent, they pay the commission-up to a maximum of two months’ net rent plus VAT. Tenants may not pay a commission higher than this rate, even if a separate contract was signed with the tenant.

Can I negotiate the commission amount?

The commission amount is generally open to negotiation. However, since the 2020 reform, the following applies to real estate purchases: The buyer’s share may not exceed the seller’s share. In the Nuremberg and Franconia market area, deviations from the standard market commission of 7.14% are rare-but for high-priced properties, discussing reduced rates is generally possible. What matters is not just the commission rate, but the overall success: An experienced real estate agent who secures the best possible selling price on the market often justifies their commission solely through the additional proceeds compared to an unprofessional private sale.

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