Real Estate Agency Fees

June 27, 2023 8-minute read
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Les honoraires d’agence immobilière

When you’re buying, selling, or renting a property, you’ll often need to work with a real estate agency to make the process easier. You won’t be able to avoid paying agency fees to the real estate agent. It’s essential to understand the fees charged by real estate agencies so you can plan your budget accordingly. Selling with or without a real estate agency, our real estate agency in Paris's 16th arrondissement, CENTURY 21 Auteuil Immobilier walks you through everything you need to know about real estate agency fees.

Real Estate Sales: Everything You Need to Know About Real Estate Agency Fees

What are real estate agency fees?

Real estate agency fees are the charges billed by the agency in exchange for the services it provides. They are generally expressed as a percentage of the sale price or the annual rent of the property and cover the agency’s fixed costs and services related to property appraisal, finding buyers or tenants, marketing, scheduling appointments, negotiation, and administration of the transaction. These agency fees, or “real estate agency commission,” will be paid to the real estate agent who will handle your real estate project and guide you throughout the transaction, as compensation for their professional work as an intermediary between the buyer, the seller, or the landlord and will be paid to the real estate agency upon signing thenotarized deed of sale or when signing the lease agreement. However, there are no actual regulations governing these fees; the agency is free to set them.

What are real estate agency fees?

Real estate agency fees are an integral part of the process of selling or renting a property.

There are different types of fees:

  • Sales Commissions : When you entrust the sale of your property to a real estate agency,
    Whether these costs are borne by the seller or the buyer, they will be specified when drafting the sales mandate, generally expressed as a percentage of the final selling price.
    These fees include the appraisal of your property, preparing the listing for publication, searching for potential buyers, conducting showings and preparing showing reports, and organizing the various appointments necessary for the sale, such as the technical diagnostics, the photos, connecting clients with notaries.
  • Rental Fees : If you’re looking to rent or list a property for rent through an agency, you’ll have to pay a rental fee to cover marketing, drafting the lease and its attachments, and the move-in inspection. For the landlord, these fees may amount to one month’s rent, including utilities and tax; for tenants renting a primary residence, they are capped at €15 per square meter, including tax (there is no cap for second homes).
  • Management Fees : If you entrust the rental management of your property to an agency, the agency will charge you a management fee, which is generally calculated as a percentage of the monthly rent. These fees cover services related to the day-to-day management of the property, such as collecting rent, paying utility bills, handling insurance claims and repairs, managing tenant relations, andMove-out Inspection…).

These agency fees must be clearly stated in real estate listings and in sales, rental, or rental management agreements.

How much do real estate agent fees cost?

The cost of real estate agency fees can vary depending on the type of real estate transaction (purchase, sale, rental) and the services provided by the agency. In general, real estate agency fees are expressed as a percentage of the sale price or rent.

  • Real Estate Sales Commissions: Real estate agency commissions for the sale of a property generally range from 3% to 6% of the total sale price. However, it should be noted that since January 1er January 2021, the ALUR Act In France, real estate agent fees are capped at 10% (including tax) of the transaction amount.
  • Real Estate Rental Fees: When renting a property, agency fees may be charged to either the tenant or the landlord. Since January 1er June 2019, the ELAN Act sets limits on real estate agency fees for rentals. Agency fees are generally broken down as follows: property viewing fees (maximum of €2 including tax per square meter), application processing fees (maximum of €10 including tax per square meter), and move-in inspection fees (maximum of €3 including tax per square meter). These amounts may vary depending on the geographic area.

Each real estate agency has its own fee schedule, which it is required to display in the window at the agency’s entrance and which it applies to each real estate transaction.
It is always recommended to clarify the real estate agent’s fees with the agent before committing to a real estate project or before signing a sales or lease agreement.

How are real estate agent fees calculated?

A real estate agency’s commission is calculated very simply, as a percentage of a property’s sale price, including tax. The real estate agency calculates its commission and bills based on the sale price; there is no flat fee, and there are no specific regulations governing the amount of agency fees.

How Can You Reduce Real Estate Agency Fees?

It is sometimes possible to negotiate real estate agency fees. Before signing a contract with the agency, discuss the fees openly with the real estate agent in charge of your project to find the best solution for your needs and see if it’s possible to reduce the agency fees. You can also consult several agencies and compare the fees they offer. Competition may encourage agencies to offer more competitive rates.

How can you avoid paying real estate agent fees?

Skipping the real estate agency to avoid paying commission may seem like a way to save money within your budget, but it’s not the most effective way to sell your property quickly and at the best price.

You can consider various approaches to avoid paying real estate agency fees:

  • When searching for properties for sale or for rent directly from the owner, since some owners or sellers choose to handle the sale or rental of their property themselves, without going through an agency.
  • By reaching out to your personal network—letting your friends, family, coworkers, or acquaintances know that you're looking for a property without using a real estate agency.

It is important to note that working without the assistance of a real estate agency requires you to have legal knowledge to ensure the security of your real estate transaction and to navigate the real estate market; you will need to invest more time and effort in your search.
Be on the lookout for potential disruptions.

How do you negotiate real estate agent fees?

You can find out about the average rates charged by real estate agencies in your neighborhood; this will give you an idea of the market and help you determine whether the fees being quoted are reasonable or not.

If you're ready to grant a exclusive sales agreement or to rent through a real estate agency, the agency may be more willing to reduce its commission if it is assured that you will work exclusively with it to sell or rent your property.

Keep in mind that negotiating real estate agency fees is a delicate process, and there is no guarantee of success. Each agency has its own pricing policy, and some may be less flexible than others.

Are real estate agency fees always listed in real estate listings?

To ensure greater transparency, the ALLUR Act requires real estate agencies to disclose their fees, and since 2017, their fee schedules must be posted in their storefronts, their advertisements, their websites, and on real estate portals. 

With regard to real estate listings, this law requires that the following information be included: 

  • the sale price of the property, including the agent's commission (or "Agency Fees Included"—F.A.I.),
  • the selling price, net to the seller, excluding real estate agent commissions
  • the amount of the fees, expressed in euros including tax,
  • who is responsible for paying the fees, the buyer or the seller.

Who pays the real estate agent's commission?

When drafting the sales agreement, does the ALLUR law require specifying whether the buyer or the seller will pay the real estate agency’s fees? In fact, the real estate agency is free to choose in agreement with the seller. Notary fees are calculated based on the total amount of the transaction—including agency fees—when the seller is responsible for the agency’s fees. 

When are real estate agency fees due?

Whether paid by the seller or the buyer, real estate agency fees are included in the listed sale price, which ultimately has no impact on the final purchase price—which will always be paid by the buyer on the day the notarized deed of sale is signed. The notary will then pay the portion corresponding to the commission of the real estate agent handling the transaction directly to the real estate agency.

Our team is here to answer any questions you may have about your real estate projects—whether you're selling, buying, or renting. You can view the fee schedule for our real estate agencies by clicking on this link.

Please feel free to contact our two real estate agencies, CENTURY 21 Auteuil Immobilier and CENTURY 21 Auteuil Seine, by phone at 01 42 15 16 21 or 01 56 07 16 21, or by email: auteuil@century21.fr or auteuilseine@century21.fr

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