Brokerage Contract: What it Contains and What to Watch Out For

Mandatory since 2020: Written Brokerage Contract

The broker is hired to find a suitable property, buyer, or tenant.
In return, the client agrees to pay a commission if the transaction is successful.

Common questions:

Simple Contract (Einfacher Auftrag):
- The owner retains the right to search for buyers and hire additional brokers.
Exclusive Simple Contract (Einfacher Alleinauftrag):
- Only one broker is hired, but the owner may still search for buyers independently.
Qualified Exclusive Contract (Qualifizierter Alleinauftrag):
- The broker is fully responsible for selling.
- All interested parties must be referred to the broker.

Allows hiring multiple brokers simultaneously.
Essentially gives the broker permission to act, with no legal obligations.
Commission is paid to the broker whose efforts directly lead to the sale.

Drawbacks:

Brokers may not be fully motivated as their commission is uncertain.
Listing the property multiple times on portals may cause confusion and distrust among buyers.

All interested buyers must be referred to the broker.
Property cannot be sold without the broker’s involvement.
Advantages: broker is highly motivated, increasing the chance of a successful sale.
Contract can have a fixed term.
Unsatisfied with performance? You can hire another broker.

Benefits:

Can be fixed-term or open-ended.
Fixed-term contracts reduce the risk of a broker being inactive or slow.
Excessively long contracts may be considered unfair and invalid, decided case by case.
Commission rights do not expire: if the sale occurs after the contract ends, the broker is still entitled to commission if they can prove their contribution.

Open-ended contracts: can be terminated at any time with “important cause.”
Examples of important cause: broker fails to fulfill obligations or misuses their position.
Written termination notice: 2 weeks from learning of the reason.

Contracts made via email, phone, fax, SMS, mail, or online forms are “distance contracts.”
Automatically include 14-day withdrawal right.
If the broker fails to inform you, you may withdraw even after signing a sale or rental contract, and the broker loses the right to commission.

Depends on the contract terms agreed upon.
If the broker has already started marketing, they may claim reimbursement if specified in the contract.
Improper termination or client misconduct may allow the broker to claim damages (e.g., lost profit from a ready buyer).

You may stop the sale at any time.
Inform the broker.
Typically, the broker ceases their efforts, but if the contract allows, they may claim reimbursement.

Excessive Commission: more than double the market rate is considered unreasonable.
Reimbursement Fees: only for services actually performed by the broker.
Penalty or Non-Completion Clauses: fixed commission if the owner changes mind is not allowed.
Prior Knowledge Clause: buyers always retain the right to claim they knew the property.
Non-Compete Clause: final price deviation up to 15% is acceptable, 50% is not.
Unreasonable Contract Duration: excessively long terms are “tying contracts”; 6 months is standard.
General Liability Exclusion: broker cannot avoid responsibility for gross negligence or intentional misrepresentation.
Commission for preemptive sale or foreclosure: legal but must be agreed individually, not in general terms.
Obligation to go through broker: only valid if agreed individually, not in general terms (AGB).