Agency fees : myth and reality

What we called « agency fee » is the real estate agency salary owned for its work and services when it is mandated by a private individual to sale his property.

Those fees are based on a scale defines by the agency and can be borne by the buyer or the seller, according to the agent or the seller decision. It is important not to confuse agency fees with notary fees[1] which are settled during the deed of sale's signature and born by the buyer.

Since 1987, fees are freely set by real estate professionals. According to the services they are paid by a flat fee or they  are based on a commission. Usually the commission is decreasing gradually: the highest is the price, the less the commission is significant. For example, it is around 5% or 6% for a property while it rises until 10% for a parking space.

What are the services covered by the agency fees?

Agency fees allow to cover fees of the whole sale's process. In this way, they include :

  • The sale's preparation : property valuation (depending on local data), writing of the property advertisement and potentially pictures, virtual tours or videos... 
  • The advertisement : diffusion on communication medias (window display, website, social medias, leaflet) and on portals of property advertisement as Bien'ici.com.
  • Research and management of connection with potential buyers : viewings, viewings reports... 
  • Recommendations : the real estate agent can give you legal advices and also inform you about technical diagnosis which have to be done, help you with the buyer selection, the different financing solutions, professional suggestions in order to do the work and also help you to highlight your property... 
  • Closing of the sale: drawing up of the sale agreement, cashing of the security deposit on the account of sequestration, the notification of the period of withdrawal to the buyer ("SRU" French Law), the transmission of the whole file to the notary...

Indirectly, those fees also allow to finance the continuing professionals education, so that they can effect at best the above services and they can stay informed about the evolutions of the regulations and the real estate market. 

Obligation to display prices since 2017

Since April, 1st 2017, real estate professionals have to display their price lists in public reception places and on their websites. Furthermore, all the property advertisements have to bring out clearly :

  • The sale price included fees, 
  • The sale price without fees, 
  • The amount of their fees in euros. 

It also has to be specified if the fees are borne by the seller or the buyer.

[1] Notary fees comprise emoluments, in other words the notary payment, and registration fees, which is a tax set given to the State and local authorities. On average, notary fees represent 7% to 8% of the sale price.

Source: bienici.com

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