When hiring a real estate agency to manage the sale of our house, the percentage of fees that we will have to pay if the sale is carried out is one of the first points of concern for the seller. How much is the real estate commission? If you are wondering “how much do I have to pay to sell my house”, we explain it to you below.
What are real estate fees in Spain? Types and laws in 2021
Real estate commissions are the amount of money that real estate agencies charge for their services when marketing a property. If you hesitate between doing it yourself or hiring a real estate agency, you should think about the amount of time you can dedicate to all the steps involved in selling a flat: placing the ads on real estate websites, preparing the documents, receiving the visits, etc.
Real estate commissions are not subject to any regulation. There’s no official institution or law that fixes their amount, so each real estate agency decides the fees it charges according to its experience in the sector and the figures that other companies in the sector usually charge.
So, is there a document in which the real estate commission is recorded? Yes, the so-called “nota de encargo” (agent agreement), which is the intermediation contract between the owner of a property and the real estate agency. It reflects the conditions of the service, who pays the commission, how much it amounts to, what work the real estate agency offers and the exclusivity, if it is the case. That is to say, if the owner offers only one agency to market his property, which allows a more direct work with the agency and, normally, reduces the percentage of the real estate commission.
What is the real estate commission for the sale of my flat or house?
In general, the real estate commission is between 3% and 6% of the final price of the sale of the property, an amount to which 21% VAT must be added. As mentioned above, it is the real estate agency that sets its fee and the seller can find numerous options on the market. It is also possible to negotiate this percentage, but it usually depends a lot on the factors related to the property.
For example, granting exclusive marketing to one real estate agency, i.e. the owner agrees that only that agency will have the right to market his property, implies a lower commission than if he hires several agencies. Luxury real estate agencies, which specialise in exclusive properties with a price tag usually above 600,000 euros, have more elaborate marketing approaches than the traditional neighbourhood real estate agency, so the commission may be higher.
the real estate commission is between 3% and 6% of the final price of the sale of the property, an amount to which 21% VAT must be added.
The real estate fees includes:
- ➡️ Valuation of the property to advise on its ideal market price, although the owner always has the final say.
- ➡️ Elements to advertise the sale of the property: photographs, floor plans, videos for virtual tours, etc.
- ➡️ Publication of the property ads in the main national and international websites and tools to improve its positioning, which these real estate websites charge for as an extra.
- ➡️ Handle the viewings, without the need for the seller to be present.
- ➡️ Negotiation with the buyer and mediation to achieve the sale with an agreement that benefits both parties.
- ➡️ Management of documents and legal and tax advice.
- ➡️ Assistance during the signing of the earnest money and the final contract of sale before the notary to help verify that everything is correct.
When is it paid?
The real estate fee is paid once the buyer of the property has made the sale. Each real estate agency decides how and when it is paid, according to what is established in the agent agreement. For example, it’s common for it to be paid in two instalments: the first during the signing of the contract and the second when the deed of sale is finally signed.
The real estate commission is never paid in advance, as it is a percentage of the final purchase price. With each payment, the real estate agency issues the corresponding invoice.
Who pays it?
The real estate fee is paid by the seller of the property. That’s why in the negotiation it is necessary to take this amount into account in order to know how much will be left from the sale of the property, although there are other concepts for which it is also necessary to pay, such as tax on the profit from the sale and the capital gains tax from the town hall.
Real estate agency commissions for renting
In the case of rental management, the job of the real estate agency is practically the same as that of a sale, as it is also necessary to publish the advert, manage the viewings, process the contract documentation, etc. Some estate agents also manage the tenant’s check-out process to ensure that everything is in order when they leave the flat and, in the event that a new tenant takes over the property, they receive it in perfect condition.
In the case of rentals, the latest law of March 2019 establishes that, in the case of legal persons, the property management and contract formalisation costs must be assumed by the owner of the property. In other words, if the flat is in the name of a company or firm, the landlord.
Regarding flats rented by individuals, the law does not say anything about this, but it is most common for the tenant to pay the commission to the real estate agency. The most common real estate commission for renting is around 10% of the amount that the tenant must pay in a year’s rent.
Are there real estate agencies that do not charge commission to the buyer?
The real estate market is no exception to the technological evolution and there are many companies that have been born under the protection of the Internet and mobile apps that claim that they do not charge commissions. It is true, but this does not mean that they do not charge us anything, as their business model is different and they are based on charging a fixed fee to the owner. It may be said that they are real estate agencies without commissions, but we still have to pay for their services even if it is in a different way than traditional real estate agencies.
Online real estate agencies are mainly based on cost reduction and can therefore offer fixed fees for their services. In addition, these often vary according to the owner’s involvement in the process of selling the property. With the most basic fees, the owner may assume the management of the viewings and paperwork related to the sale, while if the online agency takes care of everything, the price to be paid will be higher and similar to that of a traditional real estate agency.