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Securing the brokerage commission for a successful real estate business

Brokercommission commission for real estate transactions

E1 Real Estate Franchise

Easy
the No. 1

With a business partner like E1 Holding at your side, you can significantly improve your standing. You are not alone, but can rely firmly on your franchise partner in any situation. We are a team in which everyone with their strengths contributes to the joint business success.

So – Let’s try it together and become an E1 Holding Franchise Partner.

The right time to announce the real estate address to the customer

At this stage of customer information about the property, you should have the expression of interest signed by the potential prospect in your hand. It documents his serious buyer interest, so to speak in the preliminary stage of the subsequent notarial examination of the real estate contract. The expression of interest is as Letter of Intent or LoI for short the mutual declaration of intent for the conclusion of the contract. The property is reserved for an agreed period, comparable to option or right of pre-emption.

Joint business and commission hedging

The joint or joint business is a much-used alternative to competing real estate marketing. The joint transaction requires an additional individual agreement with the cooperation agreement between the property broker and the client broker, with which the agreed commission is secured.

Finding the right lawyer for the claim – not difficult, but not easy

The best reference for a lawyer of trust is a personal recommendation from colleagues. Real estate and brokerage law is part of the legal area of general contract law. The chemistry between the lawyer and the client must be right; means that the client should have the emotional feeling of being optimally represented by his lawyer. He must represent the interests of his client exclusively and consistently, both out of court and in court. Confidentiality and discretion of the lawyer are a matter of course.

Protection against circumvention of the payment obligation for the broker's commission

We at E1 Holding as a franchisor offer you the decisive advantage that your sales share in the amount of five to seven percent is first claimed and forwarded to you in case of success. This ensures the titulation of your claim, which you can then ideally sue in a separate deed process.

In your own lawsuit, you shouldn’t clap, but knock. This means that you do not file your commission claim as a partial claim, but in the amount of the full claim plus interest and expenses. A partial action is legally possible; however, it gives the impression from the outset that you are unsure and would also agree to a partial amount.

This encourages the judge to make a comparison with the consequence that

• he does not need to formulate and write a judgment and thus saves himself a lot of time and work

• each forgoes half; the creditor on his entitlement and the debtor on the obligation to pay

• each party to the proceedings bears its own costs

• the court costs are distributed half or pro rata

• no significant sum remains for you as a creditor

• the phrase applies: except expenses have been nothing

Conclusion – With E1 Holding as a franchisor and middleman on the safe side

With a business partner like E1 Holding at your side, you can significantly improve your standing. You are not alone, but can rely firmly on your franchise partner in any situation. We are a team in which everyone with their strengths contributes to the joint business success.

So – Let’s try it together and become an E1 Holding Franchise Partner.

I look forward to hearing from you.

Your CEO Muharrem Erdogdu from E1 International Investment Holding GmbH

Our recommendation is:

“Negotiate the broker’s commission before the stove top is hot.”

Different broker commission from state to state

Notwithstanding the fact that each brokercommission commission can be freely negotiated among the parties involved, there are standard percentages on the market, which vary between the federal states. These commission levels are not binding, but rather as a recommendation due to the regional circumstances.

• In the case of commercial transactions, the broker’s commission is always and in any case freely agreed; there is no country recommendation here

• For private purchases and sales of real estate nowadays, the commission rate is between about three and more than seven percent gross of the purchase price, i.e. including the statutory value added tax

Some country examples

– up to a good 3.5 percent in Baden-Württemberg, Bavaria, Mecklenburg-Western Pomerania, North Rhine-Westphalia, Rhineland-Palatinate, Schleswig-Holstein or Thuringia
– up to almost six percent in Bremen and Hesse
– up to a good seven percent in Berlin and Brandenburg

Customer refuses to pay broker's commission - what to do

It is ideal to find an ‘intermediate as mediator’ who both sides know and who is able to reach an agreement. If this is not possible, then the legal redress remains with the aim not only of being right, but also of getting justice.

• In the run-up to the court order for payment proceedings, the broker’s invoice should be served on the debtor by bailiff. This causes manageable additional costs, but has a major impact on

• The next step is the official delivery of a reminder notice. Again, the costs are not too high, especially since they have to be paid by the debtor anyway

• The recipient can appeal within two weeks

• If he does not do so, the order for payment becomes final. This follows the enforcement order which leads to the titulation of the claim. This is collected by the bailiff, in the extreme case up to the submission of an asset information, the earlier oath of disclosure

• If an appeal is filed in due time, the broker as a creditor must give reasons for his claim, which is very simple

• The competent district court awaits the debtor’s reply and then sets the oral hearing date in a timely manner

• The judgment in favour of the broker as a creditor is usually immediately enforceable

Sell entitlement to brokerage commission to debt collection agency

The debt collection agency is a legal service provider. The commission claim is at most saleable as long as no invoice has been issued. The debt collection service provider would then take over the recovery. If the debtor has received the invoice and refuses to pay, “then there is a dispute in the world”. At this point, figuratively speaking, it is too late for the debt collection agency as a legal service provider. Legal advice, including legal representation, would now be considered in court.

Moreover, debt collection agencies have no great interest in taking over commission claims or, in other words, buying them up. The subsequent process risk is simply too high for them, especially since this also entails the cost risk for litigation.

Do you have any questions ?

We look forward to hearing from you!

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