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Real estate agent and brokerage contract

If you have decided to sell your property with a real estate agent, this is done on the basis of a so-called brokerage contract. In this contract all rights and obligations as well as the conditions and term are bindingly agreed upon. The brokerage contract is the basis of the cooperation and should be carefully checked by the seller before signing. The following contract contents should be represented:

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The real estate agent agreement:

  • If you have decided to sell your property with a real estate agent, this is done on the basis of a so-called brokerage contract. In this contract, all rights and obligations as well as the conditions and duration are bindingly agreed.
  • The brokerage contract is the basis of the cooperation and should be carefully checked by the seller before signing. The following contract content should be shown:
Brokerage contract
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The basic duration of the brokerage contract must be regulated. The contract generally ends with the fulfilment, i.e. the sale of the property. This is often seen as the same as the date on which both parties signed the purchase agreement at the notary.

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The remuneration that the real estate agent receives for his activity, the brokering of the property, is also a minimum criterion of a brokerage contract. Real estate agents are normally remunerated exclusively on the basis of their performance. Any marketing services that the real estate agents commission, they do as a rule at their own expense. Sometimes real estate agents charge a marketing fee in addition to the actual commission, which has to be paid in advance. In principle, this is not a KO criterion, but the percentage commission should then be below the usual value to be paid, since the real estate agent shares part of his risk with you.

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Furthermore, it is regulated how exclusively a real estate agent may market your property. There is the possibility to agree on no exclusivity, which means that you are basically allowed to market the property yourself and in addition you can also commission other real estate agents with the sale. Then there is the so-called Exclusive Contract, where only one real estate agent is allowed to offer the property. With the Exclusive Contract, however, you are also allowed to look for a suitable buyer in your own network, friends, families and neighbours. If you find someone who buys your property, the real estate agent is left empty-handed. The most common form is the qualified Exclusive Contract. In this case, all inquiries go through the real estate agent. In principle, you are allowed to look for a buyer yourself, but you then forward the contact details to the real estate agent. The visits of the real estate as well as the further steps of the sales process are accomplished by it. The great advantage of a qualified Exclusive Contract is that the real estate agent has the security of knowing that if a buyer is found, he will definitely receive his commission. This increases the willingness of many real estate agents to invest more in marketing. The marketing activities can accelerate the marketing of the property.

We do not recommend hiring several real estate agents at the same time to market your property. Basically, the more service providers offering the property, the faster the marketing could be. However, if your property is offered many times with different pictures and texts, this could lead to confusion among prospective buyers. As a result, the property will receive fewer inquiries. This may even affect the price in the end. Therefore, you should give the assignment to a real estate agent. However, always stay on top of things and check with the real estate agent of your choice how the marketing of your property is developing.

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Range of services:

Good brokerage contracts also have a listing of what services are offered in detail. For example, it should also be listed that they provide listed marketing services in addition to just brokerage.

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Termination options:

One important point is the options for terminating a brokerage contract. The sale of a property is not done within a day. Accordingly, your life circumstances may change. If, for example, you no longer want to sell or are dissatisfied with the services of the real estate agent, it should be regulated how the contract can be terminated. It will also be regulated under which circumstances the brokerage fee or a part of it must be paid. This case occurs, for example, if the real estate agent has already commissioned a photo shoot of the property and has already invested a lot of time in marketing it. If you want to terminate a contract, and the reasons are of secondary importance, all these points are openly regulated in a sound real estate agent's contract.

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Real estate evaluation:

The biggest and all-important question when selling a property is, how high will the purchase price be. Basically, there are online tools for real estate evaluation and tables to determine a rough price or a price estimate. However, these calculators often give a price range of sometimes more than 100,000 €. Tables represent the past and not the current developments of the market price. In addition, each property is unique. In some parts of the city, the side of the street can determine whether the same house is worth €50,000 more or less. Also the interior furnishings can make a significant difference in price. All these factors must be taken into account when determining the purchase price.

Real estate agents evaluate real estate every day and have a good feeling, usually already from the gut and from the daily work, in which direction the purchase price of a property moves.

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Marketing material:

In order to sell your property at the highest possible price, it is important to present it in the best light and as extensively as possible. A good real estate agent therefore creates extensive and high-quality marketing material of your property. High-quality pictures, floor plans, location description, energy data and facility texts form the basis for the exposé and online advertisements. But also beyond that, very good real estate agents are characterized by offering additional tools in your marketing portfolio. In addition to drone shots, these can also include home staging (professional preparation of a property's rooms) and 360° tours.

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Documentation summary:

In addition to the good presentation of your property itself, good real estate agents also compile all relevant documents about a property. The real estate specific documents are usually located in different places: The building authority has documents about the building and its use or reconstruction and extension possibilities, online platforms provide the development plan and the property management of a condominium has the declaration of partition, the energy certificate and other documents. The current owner has insurance data, utility bills, and in the case of single-family homes, the energy certificate and much more. All these documents need to be gathered so that the new owners also have all the documents when they buy your property. Should a property be financed with a loan, the bank also needs a large part of these documents to check your loan application. Therefore, excellent real estate agents are characterized by already having all the documents at the start of marketing a property.

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Online portals, newspapers, social media channels and especially the real estate agent's own search customer base are the most common marketing channels for a property.

In addition to publishing an ad for sale, the real estate agent also plays another important role: he answers the inquiries and questions of interested parties, sends the exposé if there is interest and also other documents and arranges appointments for viewings.

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To plan a property viewing is a skilful job. Very good real estate agents make exclusively single viewings with the potential prospective customers and take themselves sufficient time, in order to present the real estate fully and to answer all questions. After a viewing, additional documentation is usually provided. After the viewing, a good real estate agent will follow up by phone and email to see if there is continued interest.

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Selection of interested parties:

If there are one or more interested parties for a

property, it must be checked which one is best. If there are for example prospective customers, who can show already a positive financing promise, these can be evaluated more highly. It is already more foreseeable that the sale can be completed.
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Price negotiation:

The real estate agent already has a lot of experience from daily price negotiations. Therefore, he should know the margin, if any, of the sellers, and confidently conduct a possible price negotiation in their interest with the potential buyers. Since the real estate agent is not emotionally attached to the property and has the years of experience, he can often act more diplomatically and better in a negotiation than two private individuals. Through his negotiating skills, a real estate agent can provide a very high added value for you, as this usually accounts for high price differences.

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Preparation of the purchase contract:

The purchase contract itself is drawn up by the notary, which means that a professional is already involved. Since the real estate agent knows both parties to the contract and also the building, he is often a great support in the preparation of the purchase agreement. The notary receives all the necessary information from the real estate agent directly from one source. The purchase contract can thus be drawn up more quickly..

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The last service of a real estate agent can be called the handover of the property. Often the real estate agent as well as the seller and the buyer walk through all rooms of the property together and check whether they are in the agreed condition. If there are any defects, they are documented. Together they read all utility meters such as gas, water and electricity. The handover is recorded in a handover protocol and the buyer receives the original documents such as the declaration of partition or the energy certificate. Finally, the buyer receives all the keys, which completes the handover and ends the work of the real estate agent. However, even at this stage, eager real estate agents are still available to your customers for any questions they may have.

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In our opinion, it is almost always worthwhile to sell your apartment or house with a good real estate agent. The real estate agent is a professional in this business and knows the process from A to Z. In addition, he takes a lot of work from you and supports you especially in the purchase price and the selection of interested parties. But especially here it is worthwhile to compare. There are tens of thousands of real estate agents spread all over Germany and, as with any service, the quality varies. Comparing is worthwhile, even if a real estate agent has its price, you have more time when selling and at the same time you may achieve a higher price than you would have expected.