In a real estate transaction, whether it’s a sale or a rental, one question comes up regularly: who has to pay the real estate agency fees? Several factors influence the answer, including the nature of the transaction, the signed contract, and current legislation. Here’s everything you need to know about agency fees.
Real Estate Agency Fees: What Are We Talking About?
What are agency fees?
Agency fees, also called commission fees, represent the real estate agent’s compensation for various services: property valuation, property promotion, organizing visits, negotiation, drafting of the lease or sales agreement, etc.
How are these fees calculated?
They are usually calculated as a percentage of the sale or rental price, but may also be defined as a flat fee. According to the law, the fee schedule must be displayed in the agency’s window and on its website.
Who Pays the Fees in the Case of a Sale?
The buyer or the seller: a contractual matter
In a property sale, the fees may be paid by either the seller or the buyer, depending on what is stated in the sales agreement. This information must be mentioned in the listing as well as in the preliminary sales agreement.
Common case: fees paid by the seller
Often, the fees are included in the listed sale price, meaning they are borne by the seller. This allows the buyer to finance the full amount through their mortgage.
Specific case: fees paid by the buyer
Sometimes, the fees are paid by the buyer. In that case, the listing will break down the price clearly, showing the agency fees separately. The price will appear in two parts: net seller price + fees. This can be advantageous for lowering notary fees, which are calculated based on the net seller price.
Who Pays the Fees in the Case of a Residential Rental?
Fee sharing under the ALUR law
In the case of renting a primary residence, the ALUR law, which came into effect in 2014, introduced strict legal rules on how agency fees are split. Rental-related fees can no longer be entirely paid by the tenant: they are now shared between the landlord (owner) and the tenant, according to specific legal rules.
What the tenant pays
The tenant may be charged for the following services:
These fees are regulated and capped depending on the size of the property and its location (tight housing zones, very tight zones, and non-tight zones). The tenant can never be charged more than the legal cap, ensuring protection against excessive fees.
What the landlord pays
The landlord covers the other half of the fees, as well as any costs not attributable to the tenant (advertising, property management, etc.). According to the ALUR law, the landlord can never pay less rental-related fees than the tenant.
Can Agency Fees Be Negotiated?
Negotiation and personalized fee schedules
Since April 1, 2022, fee schedules no longer have to reflect the actual fees charged but instead indicate the maximum fees for each type of service: sales, rentals.
Summary Table: Who Pays What?
Type of Transaction | Who Pays? | Notes |
|---|---|---|
Sale | Seller | Fees included in the total sale price |
Sale | Buyer | Notary fees calculated on the price excluding fees |
Rental | Tenant + Landlord | Fee sharing governed by the ALUR law |
Conclusion
Agency fees are a key component of the overall cost of a real estate project, whether buying or renting a property. Their distribution depends on the type of transaction, the contract signed with the agency, and the legal framework in place, notably the ALUR law for rentals.
To avoid any unpleasant surprises, it’s essential to understand the fee schedule, ask the right questions from the very first visit, and compare agency offers. Transparent information about fees allows you to better anticipate your expenses and negotiate effectively.
To benefit from personalized support at every stage of your real estate project — including understanding and optimizing agency fees — don’t hesitate to contact an Optimhome advisor. Thanks to their expertise and that of our specialized partners, you’ll be guided to secure your transaction and carry out your project under the best possible conditions, with complete peace of mind.
FAQ
Can agency fees be negotiated?
Yes, except in regulated rental markets, agency fees are negotiable.
Are agency fees included in notary fees?
Notary fees are calculated based on the total price if the seller pays the fees, or on the net seller price if the buyer pays them.
Who pays the agency fees for a furnished rental?
For a furnished primary residence rental, fees are shared between tenant and landlord, according to the ALUR caps.
How can you find out about the fees before signing?
The fee schedule must be accessible in just two clicks online:
The decree of January 26, 2022, amended the provisions of the decree of January 10, 2017, regarding the display of agency fees. Real estate agencies must display their rates in a clear and visible manner to inform clients from the beginning of the commercial relationship. The DGCCRF strictly monitors compliance with these obligations to prevent misleading practices.
- Organizing visits to the property,
- Preparing and reviewing their application file,
- Drafting the lease contract,
- Carrying out the move-in inspection.
Author
Fabrice DOBROWOLSKI - Network Development Director at Optimhome
« Optimhome offers you personalized support for your real estate project. Benefit from all my advice, based on several years of experience, to ensure the success of your project.»
