What is the size of the intermediary fee?
THE INTERMEDIARY FEE IS PRESCRIBED BY THE LAW ON MEDIATION
Often from users of the services of real estate agencies, one can hear dissatisfaction and confusion about the intermediary fee, popularly called the agency commission. Dissatisfaction concerns the amount of agency commission, and confusion comes from uneven practice in the real estate market. Clients are persistently wondering who is obliged to pay the intermediary fee?.. Is it the buyer of the property or is it the seller after all. In this blog we bring answers to all questions related to the brokerage fee, when and who pays the commission to the real estate agency.
First, let's answer the question of what is the size of the intermediary fee. The fact that the commission may be charged to the agency up to a maximum of 6% is incorrect. This provision was very briefly spelled out By law, you are the same due to non-compliance of provisions in national legislation with the provisions of Directive 2006/123/EC on services in the internal market, this remuneration for the intermediation is left to the free contracting of the parties.
Thus, it is evident from the adopted provision that the agency commission can be charged in an amount that depends on the agreement (Contract) between the party and the intermediary, and that no legal maximum is prescribed. In practice, in our real estate market, the intermediary fee i.e.agency commission generally ranges from 2% to 3%.
The answer to the question of when to pay a commission to a real estate agency is prescribed by the Law, but it is also customary in practice, and in all serious, licensed real estate agencies,intermediary fee is paid at the conclusion of the contract of purchase/rent/lease. Therefore, the party is not obliged to pay an agency commission when concluding a Pre-Contract, unless it has agreed to such a provision through an Intermediation Agreement that it has concluded with a specific agency, and I repeat, such a thing is not the practice of serious agencies in our market.
Who pays the agency commission is also clearly stipulated by the Law on Mediation which says that it is the principal. So not the buyer, not the seller but the principal.The principal in the real estate market can be: buyer of real estate, seller of real estate, tenant of real estate, lessor of real estate and tenant of real estate. Therefore, any real estate market participant can also be a principal, and if any of the above has a business relationship with a real estate agency, and has concluded an Agreement with it, he is the principal and he is obliged to pay agency commission under the Brokerage Agreement.
Each of these stakeholders may decide of their own free will whether or not they wish to use the services real estate agenciesand whether he wants to enter into a business relationship with a real estate agency as a principal. It is up to each client to assess for himself whether the agency offers him what he is looking for and expects, and whether he is willing to pay for it.
At the same time, I would like to emphasize that most agencies communicate clearly and transparently what services they charge for, and clients are aware of the operating conditions of the agency even before contacting it. This transparency can be seen through advertisements for a specific property, through the website and the general terms and conditions of the agency and/or in personal contact with the real estate agent.
To avoid any doubt or feeling that the agency is misleading you, the recommendation is: Ask! A simple question to a real estate agency:” What service do you offer and what is the agency commission?” will help you decide if you want to be a principal.
published 19.07.2024