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Cost of realtor when looking for a rental home

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Posted

Hi all,

My husband and I are looking for a house to rent in the Munich area. His company will cover the 2 months of provision for us. What are other costs related to using the services of a real estate agents, if any? I am sure he/she could help greatly with getting to know the area and best places to live.

Thank you for your answers!

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Posted

Speaking as a Realtor, if you use a realtor you will be required to pay no more than 2.38% tax is included, sometimes you can negotiate for cheaper, personally speaking depending on the monthly rent I sometimes charge only around 1.5%. And you are right, having a realtor will greatly speed up your search for a house that fits to your requirements, they also help you with a proper contracts and various paperwork, and the other sundry things that must be taken care of. Also sometimes I drive my clients to the location if they havent private transportation. If you were in the Stuttgart area I would offer you my services, sadly you are a little too far away. :D

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Posted

Hi Crossman,

This is great help. So the 2.38% comes on top of the Provision right? That is strictly paying a real estate agent for his help in finding a house.

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Posted

Crossman may be a realtor, but his math skills need some polishing.

He means you will pay 2.38 times the cold monthly rent (= 2x rent plus 19% VAT) as a commission at most. That is the Vermittlungsprovision. You only pay the estate agent once a lease is signed.

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Posted

Helpful realtor in Munich? That'll be the day. They just send a few emails and then peacefully wait for dozens of well paid professionals to come beg that they're given the advertised place. For this "work" they're paid 2.38 times the monthly cold rent.

Basically, if your budget is between 800-1500 for a 60-80 sqm apartment, be prepared for a prolonged search. If you're in for the luxury market it's easier (or at least it was a couple of years ago) as the number of interested people is obviously reduced.

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Posted

El Jeffo,

Thanks for your answer. I just want to make sure I understand this correctly. I will be paying 2.38% of provision + 2.38% of realtor fees, right? Or are those 2 the same thing and I will pay it once only?

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Posted

They're the same thing and you're only paying it once. What's your renting budget and expectations, if I may ask? But really, be careful. In Germany, and in Munich in particular, the realtors are not on your side and not there to help you.

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Posted

Leave out the percentage signs. The Provision (realtor commission/fees) will be 2.38 times the monthly cold rent (rent not including utilities). As I stated above, this seemingly odd figure is calculated as 2 months' rent plus statutory VAT (19%).

You said your husband's employer will be picking up the tab for this, so you might as well do it. Note that German real estate agents don't work like American agents (some would say they don't work at all, but I digress). If you call them and tell them what you're looking for, they will only offer you what they have on hand at the moment. So you're best off calling a number of different Maklers - you only have to pay one of them, and only after they provide a lease to sign.

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Posted

Ok maybe I wasn´t very clear. The provision is what you will pay the realtor for his services, you only pay it once. Normally they request 2.38 tax included (no more than that) of one month cold rent. Example: €1800 cold rent, you will pay the realtor the sum total of €4284. 1800x2=3600+19%(684)=4284

This is not to be confused with the Kaution which is usually 2 months(sometimes up to 3 months) of cold rent as well. This you will receive in full once you leave IF nothing is damaged from you in the apartment. I encourage you before you move into a place go with your realtor and point out anything that is damaged already and have him note it all into the contract, even take pictures of it as well, so in the future when you leave you have no disagreements with your landlord.

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Posted

I will give an example with numbers so that it will be crystal clear:

Let's say that you find (through a realtor) the place you want and it costs 1000 euro cold (cold = without heating, electricity ,etc).

Apart from you, there is a good chance that many others are interested (even through the same realtor), for the property.

You will have to submit a lot of documents (Schufa, Employment contracts, etc).If you are lucky and the landlord chooses you, now you have to pay:

2380 euro ( 1000 x 2.38) The provision to the Makler. This is done once and usually the only fee the Makler (realtor) gets.

Apart from that you have to give 2-3 cold rents (it depends on the property it is stated in the ad) in advance to the landlord.

Let's say that for your property is 2x the rent.

This is called Kaution, in your case : 2000 euro. This is usually deposited in a special account in your name and the landlord's.

At the end of the contract, if you leave the property in great condition you will get it back, any damages you caused will be paid from there.

Many horror stories have been told :D

After that you will arrange with your bank to deposit the rent amount to the landlord's account monthly.

So bottom line is that for a 1000 euro property even before you enter you have to give about 5x the rent (about half of them, you will get back if all goes well, by the end of the contract (the Kaution+interest)).

Cheers,

Alex

Edit: While writing this, many additions have been made so I am repeating some stuff already said.

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Posted

Ok, that all makes more sense. I will pay the provision for services offered by my real estate agent once I decide to sign the lease. I am assuming the renter's realtor will then deal with giving part of the commission to the realtor on the other end, as I had understood that the provision went to the listing agent.

Anyhow, all I need to know is that if I get a home with provision, that will cover my realtor fees!

Mtbiking - we have a 1 year old and a baby on the way. We allocated ourselves a budget of about 2200€ (inc. NB) to find a single-family home (dopplehaus at most) with 4 bedrooms within 30 minutes (car or public transp.) of OlympiaPark.

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Posted

Mtbiking - we have a 1 year old and a baby on the way. We allocated ourselves a budget of about 2200€ (inc. NB) to find a single-family home (dopplehaus at most) with 4 bedrooms within 30 minutes (car or public transp.) of OlympiaPark.

I have no Munich experience, but based on what you ask it looks doable :

This link is for : Up to 2000 kalt, 5+ Rooms , EF haus or DHH , 15Km radius from Olympiapark

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Posted

Ok, that all makes more sense. I will pay the provision for services offered by my real estate agent once I decide to sign the lease. I am assuming the renter's realtor will then deal with giving part of the commission to the realtor on the other end, as I had understood that the provision went to the listing agent.

Anyhow, all I need to know is that if I get a home with provision, that will cover my realtor fees!

Mtbiking - we have a 1 year old and a baby on the way. We allocated ourselves a budget of about 2200€ (inc. NB) to find a single-family home (dopplehaus at most) with 4 bedrooms within 30 minutes (car or public transp.) of OlympiaPark.

No, you haven't understood it. You don't have a real estate agent working for you. That profession does not exist in Munich! The Markler (realtor or real estate agent or whatever you want to call it)) is working as an intermediate of the landlord and is chosen by him. His fees are nonetheless coming from you (the 2.38 x cold rent). Think of it as a win-win-lose situation, where the renter loses, and be happy the company is picking up the bill.

edit: your budget is quite generous and it certainly puts you above the majority of young families looking for a place.

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Posted

So bottom line is that for a 1000 euro property even before you enter you have to give about 5x the rent

Actually this statement is not completely true.

According to German law, she do not have to pay the entire Kaution prior to moving in. She have up to three months to pay the Kaution after moving in and the Kaution can be paid in monthly divided payment.

Makler threads.

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Posted

Hi all,

My husband and I are looking for a house to rent in the Munich area. His company will cover the 2 months of provision for us. What are other costs related to using the services of a real estate agents, if any? I am sure he/she could help greatly with getting to know the area and best places to live.

Thank you for your answers!

Ideally your husband's new employer should actually contact and book a relocation agency for you guys. A relocation agency would not only support you in the search for an apartment (either with embeded or attached real estate agents or by themselves) but would also help you finding for instance a daycare/creche for the older baby, help you to open bank accounts etc. Once you have found a place you like and start packing things to move, you might also want to look for an independent insurance broker to help you setting up the right kind of insurances you guys need in Germany. Since Germany is a rather poorly regulated market for financial advice it is kinda hard for newcomers to understand if and where independent advice is offered in contrast to restricted advice from tied agents or other sales persons. You might want to read about the different kind of insurance and financial advisors here: http://www.crcie.com/mediapool/64/649626/data/INfo_-_Financial_advice_in_Germany_-_rules_and_laws.pdf

There are a number of well-respected independent broker advertising here on Toytown, take your pick.

Cheerio

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Posted

Oh boy, ok.. I was probably picturing a relocation agent then. Someone who could help me look for houses and possibly find more than I could myself. I will keep on searching Immoscout and reading the newspaper. Thanks all!

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