Federal Minister of Justice Katarina Barley is currently examining the expansion of the 2015 existing ordering principle for leases on real estate sales, in the next few weeks, a draft bill should be available. The introduction of the buyer principle to facilitate the purchase of real estate, since the purchase costs in Germany depending on the state between 11 and 15% of the purchase price. As a rule, the banks do not finance the incidental acquisition costs, so the buyer must have equity, which is often not available.
In the legitimate hope that the SPD-led Justice Department picks up their proposals, the Bundestag faction Alliance 90 / THE GREENS under the Drucksachennr. 19 / 4557 introduced a bill last September. Since it is in the opinion of the "Greens" in the sole interest of the seller to sell a property, the buyer's commission should be canceled without replacement. But also the seller should be protected to the extent that a cap on the seller's commission should be introduced at 1,68% net.
From currently 6% (in most of the states), according to the will of the "Greens", the total commission should be reduced to 1,68%, which would correspond to a loss of turnover of 73%. Any company that has to cope with a reduction in sales on this scale has only two alternatives: either give up its business or massively lay off staff.
It can be assumed that - if the scenario initiated by the "GREENS" became a reality - tens of thousands of jobs would be lost. The closure and downsizing would also affect around 15.000 young people who are currently training to become real estate agents. What remained, and this makes the absurdity of the initiative particularly clear, were the so-called part-time brokers. This group, mostly without training and expertise and largely responsible for the industry's bad image, can continue to do business from the kitchen table.
In twelve states, brokerage commissions are shared between seller and buyer. Only in Hamburg and Berlin, as well as Brandenburg and parts of Hesse, does the buyer alone pay between 5,95 and 7,14%, which is indeed a heavy burden. Except for Brandenburg, where the SPD ruled together with the Left, the "Greens" have been part of the government for some years in all state governments and senates. Why no effort has been made to share brokerage commissions remains unfathomable.
It is worth taking a closer look at the arguments presented in the "GREEN" bill.
Broker rewards in European countries
For example, the low broker commissions in some selected European countries, such as the Netherlands, where the seller paid the commission of max. 1,5% have to pay. Not to mention the exceptions. Thus, the buyer can hire a broker and the commission as well as any chargeable extras are freely negotiable. The commission models in other countries are diligently kept secret. In France, the commission is between 5 and 12% and is usually included in the increased purchase price, the buyer therefore contributes indirectly. In Portugal, the seller pays between 5 and 10%, in Italy both parties pay between 2 and 6%. Europe is a patchwork of brokers' commissions; picking out only those examples that are politically opportune is unfair.
Discrediting the brokerage service
The draft discredits the services to be provided by real estate agents across the board in an ignorant manner. In a populist manner, the job description is reduced to the cliché of the “door opener”. Quote: "(it is) the brokerage of residential real estate is a simplified / standardized service of a simple kind through the Internet". This statement cannot be beat for ignorance. Just one example: in order to seriously value a property, you usually need in-depth training and a lot of experience. But of course it is also possible to have an evaluation carried out on the Internet in two minutes. Here, however, the results are consistently wrong because the standardized procedures cannot even come close to reflecting the individual character of a property. However, competence is also in demand in other areas: construction law, real estate law, sales contract law, real estate financing to name just a few. The complexity of brokerage is also reflected in the guidelines for the three-year training course to become a real estate agent or in further training to become a real estate specialist.
The brokerage fees as the sole price driver
Not the brokerage brokerage, but the real estate transfer tax is the biggest cost driver when buying property, at least in the federal states, in which the commission between buyer and seller is shared. In NRW the land transfer tax is 6.5%, the brokerage fee 3,57%, plus costs for notary and land register entry. The draft law does not say a word about lowering the land transfer tax, and in the opinion of the Federal Group, there is still a need for action in the notary's fee and the costs of the land register entry. For decades, the brokerage costs in Germany have remained stable, but in the last ten years, the land tax in the individual federal states has been raised 27 times. It is astonishing that the benefit principle, which is used for canceling and lowering brokerage commissions, is irrelevant when collecting land transfer tax.
Transparent consumer protection
This argument, which has been tried several times in the bill, does not apply, on the contrary, it undermines consumer protection. Since the brokerage company is to be reimbursed solely by the purchaser, ie by the seller, then consequently the advice of the purchaser would have to be dropped. Considering that buying a property is one of the most important financial decisions of a lifetime, especially for younger acquirers, consumer protection should play a prominent role here. A wrong or wrong advice of the broker was often sanctioned in the past by the courts, ever stricter requirements were rightly put to the consulting service. The liability of the real estate agent for his advice would be omitted in the future, since he is only obliged to the client.
Cost increase instead of reduction
In addition to the topic of consumer protection, the cost-cutting aspect is particularly emphasized in the present draft. This is pure window dressing as sellers will price in the commission on the sale. Since the broker no longer advises the buyer, he will be forced to consult an expert if he is interested in buying, which is also associated with costs. Incidentally, these are based on the corresponding market value. The argument that an increased purchase price would be financed by the banks - in contrast to the incidental acquisition costs - does not work either. Banks do not use the market value or real value, but rather the mortgage lending value when granting loans. If the purchase price is above this value, a bank will not finance unless the buyer provides additional security such as a higher share of equity. But it is precisely the lack of equity capital that, according to the green reading, is the reason for introducing the bill.
The job description of the broker, apart from the technical qualification, is mainly to mediate between the interests of the seller and the buyer. To represent only the seller side, ultimately harms the buyer, which is why the division of the commission would have to be introduced nationwide. By contrast, the amount and the percentage should not be uniformly regulated because the demand and supply sides are too heterogeneous in structurally weak areas and agglomerations.
The fact that the sole scapegoat is being sought for the failure of housing policy at federal state and municipal level can not be tackled. Here an unjustified interference in the freedom of occupation and contract takes place and a price regulation, as it exists for example with the fee regulations, likewise can not be used, since the broker receives his fee only in the case of success.
The truth is that for decades politics has seen no reason to regulate the activity of the real estate agent and to regulate the approval, although this has been repeatedly demanded by the professional association IVD. Not least because many black sheep have damaged the reputation of the entire industry. The calculus of the "Greens", your demands would therefore find little headwind in the population, could rise. That's simply called populism!