The ordering principle

The important balance between buyer and seller interests

Garcia Immobilien

New draft law

In which cases does the ordering principle apply, and when does it not apply?

The important balance between buyer and seller interests

Garcia Immobilien

New draft law

In which cases does the ordering principle apply, and when does it not apply?

Are you looking for a property or considering selling one?

Garcia & Co. Immobilien

Find property Your personal consultation

Living space has become increasingly scarce in recent years, and finding a suitable property takes time and an active presence in the real estate market, which most people do not have. Many therefore use the services of a real estate agent, who conveniently and easily finds the right property for them – and they pay a lot for this service. In addition to the actual purchase price, the agent must of course be paid for their services in the form of a commission. These costs have usually been borne by the buyer, especially in highly sought-after locations and large cities. This is now changing: On December 23, 2020, a new law will come into force that regulates the distribution of real estate agent commissions – the so-called "Bestellerprinzip" (ordering principle).

Anyone who wants to sell their property through a real estate agent places an order and concludes a legally binding contract. However, hardly anyone concerns themselves with the legal basis as a prospective buyer – or did you know that you are already entering into a contract when you request a property listing or a viewing appointment? This is the basis on which a prospective buyer has previously had to pay the entire brokerage commission themselves. Here we show you what has changed and in which cases the new law applies and when it does not.

What do I need to bear in mind as a seller?

With the buyer principle, it is more important than ever that you make clear agreements. Do not simply allow an agent to offer your property! Decide in advance whether and what services you require and ask the agent to explain clearly how they intend to market your property in your best interests. Not all real estate agents are the same, and the sale does not begin when interested parties are sought. Long before the first viewing appointment, there are a number of formalities to be clarified: Is there a plausible valuation, and will the real estate agent take care of all the necessary documents? Do their services include credit-checked prospective buyer management, preliminary marketing work, a professional property brochure, and sufficient advertising? Will I receive support in preparing and handling the notary appointment? Is it important to me to have a personal contact person who is easily available? And most importantly: How high is the commission in the event of a successful sale?

What do I need to consider as a prospective buyer?

Even as a prospective buyer, we recommend that you make clear agreements from the outset about what services you can expect and what you will have to provide in return—for example, the amount of the broker's commission. But taking care of the contract documents, accompanying you on viewings, and ensuring a smooth and timely handover to your new home are also qualities that distinguish a good real estate agent.

Until now, when selling real estate, the owner would hire a real estate agent, but the commission was often paid by the buyer. The reason for this is that when brokering a property, an agent can conclude two types of contracts individually: The first is with the seller and includes a range of services that ultimately lead to the sale.

The second type of contract is concluded with the prospective buyer long before they have purchased the property. Strictly speaking, this contract is valid from the moment the prospective buyer requests a property listing, for example. By doing so, they automatically agree to pay the brokerage commission stated in the listing if they wish to purchase the property. In practice, many real estate agents have waived their commission to the seller and then claimed it from the buyer alone.

Under the new rules, whoever "appoints" the real estate agent is also obliged to pay for their services, at least in part. The new draft law balances the distribution of commission in favor of the prospective buyer: From December 23, 2020, brokers will be obliged to split the costs of the brokerage equally between the prospective buyer and the seller. If an agent charges a 3% commission, they must charge 3% from the buyer and 3% from the seller, so that both parties bear the same costs for the brokerage of the property by an agent. However, every law has its limitations and exceptions.

The buyer principle only applies if the prospective buyer is legally considered a "consumer," i.e., if the prospective buyer is a private individual. Furthermore, the new law only applies to residential properties that are intended for personal use, i.e., single-family homes, single-family homes with a granny flat, or condominiums. On the other hand, prospective buyers acting as companies, as well as multi-family houses and commercial and industrial properties, are excluded from the buyer principle.

Regardless of this, the seller still has the option of voluntarily paying the entire commission, thereby relieving the prospective buyer of all costs. This makes a property very attractive from the buyer's point of view and often leads to many more interested parties coming forward and the property being sold more easily

Another special rule applies if the broker receives a property search request and has to actively search for a property. If they find a suitable property for their client, the client alone bears the commission costs— the owner cannot and may not be charged in this case, as their property was not yet for sale at the time the order was placed. However, if the client ultimately decides against the property offered to them and the owner still wishes to sell, the property becomes part of the broker's portfolio. This means that the buyer principle applies again to the next interested party and the owner bears half of the broker's commission.

If you want to know for sure which rules apply in your specific case, it is best to seek professional advice.

When demand is high, professional brokers filter out suitable prospective buyers and clarify, for example, whether the property fits within the buyer's budget before arranging a viewing.

Do I need a real estate agent despite high demand?

Do I absolutely need an exposé to sell my property well?

The property listing is the calling card for the property and contains all the important information that a buyer needs to make a purchase decision. A high-quality property listing promotes a positive assessment by the prospective buyer and has been proven to lead to a more successful sale.

Get transparent and performance-oriented advice

Our work has been based on the buyer principle since 2007. Thanks to this experience, we know what matters: from the initial consultation to the conclusion of the sale, it is important to us as your personal contact on site to maintain clear communication and make every step in the sale process comprehensible and transparent – so that everyone knows what to expect.

Are you looking for a property or considering selling one? Contact us without obligation. We look forward to getting to know you and will be happy to advise you on your options.

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Riccardo Giamporcaro

Real estate consultant for residential properties

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Pedro Garcia

Managing Director - Real Estate Consultant for Commercial Properties & Investments

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Peter G. Beuth

Real estate consultant for property owners Real estate valuations – DEKRA-certified expert in real estate valuation D1

0 27 22 - 93 720

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