Brokerage commission for property sales

1. Amount, Maturity and Composition of the brokerage Commission in Switzerland

2. The appointment principle: Who pays the brokerage commission for the purchase or sale of the property?

3. Can the property seller evade the estate agent's commission?

4. When does the claim to a commission expire?

5. Negotiating the brokerage contract: Tips and tricks when selling real estate

6. What our customers say

The amount of the brokerage commission is not regulated but is entirely a matter of negotiation. However, to protect vendors from excessive charges, a restriction (Swiss Code of Obligations 417) allows for a judge to reduce a disproportionate brokerage contract at the request of the vendor. Local rates are applied, which vary in amount.

The brokerage commission is only payable upon the successful sale of the property - more precisely: upon public notarial certification of the purchase contract.

In principle, a contract between a property vendor and an estate agent can be concluded in writing or orally. For the brokerage contract to be payable, the determining factor is that the broker is demonstrably responsible for the successful sale. In practice, contact established between the vendor and purchaser is sufficient. Sometimes the agent also participates in the negotiations surrounding the sale.

In addition, depending on the case, estate agencies are able to invoice their clients for the additional expenses and costs involved with documentation, estimates, promotional fees, etc. These are also payable regardless of the success of the sale. It is thus important that these tasks be defined and possibly capped in the contract with the estate agent.

A written contract is always recommendable to avoid later misunderstandings or disputes over the amount and due date of the brokerage contract and to avoid any further payments.

In principle, estate agents work for the vendor of the property and must accordingly be paid by the vendor who has appointed them. Moreover, the brokerage commission can be taxable (see real estate gains tax).

Sometimes, however, the opposite situation prevails: A prospective buyer needs a certain property and appoints an estate agent to carry out the search. Thus, it is frequently the purchaser who must also pay the brokerage contract. However, in practice, this can depend on the respective property situation in each individual case.

Can the agent ask both parties to pay? Yes. In accordance with Swiss Code of Obligations 415, the broker may not demand the commission from both the vendor and purchaser. An exception occurs, however, when the estate agent establishes contact with both parties and informs them about his or her dual mandate, assuming neither party objects to this arrangement.

For a commissioned estate agency, the short answer is No. We will deal with exceptions in the next section.

Any vendor seeking to evade the broker’s claim to a commission – possibly by selling the property to the relatives of the interested party represented by the broker – is conducting what is called an “evasive transaction”. Under the law, however, this is equated to conclusion of the main contract, enabling the agent’s performance to be protected and the agent’s claim to a commission to be enforced without problem.

The broker or the estate agency can in fact lose the right to a commission. This can happen, for example, if the fiduciary duty is breached or in the event of a prohibited dual mandate (see above). Even if the contract expired before the conclusion of the contract or only a preliminary contract was concluded, the entitlement to commission expires.

As we have indicated above, the amount of the estate agent commission is a matter to be negotiated. As the vendor, you should not be reluctant to obtain offers from a number of estate agencies. You can compare the services or also ask your local professional associations to recommend customary rates that would fit your sales situation.​

Have you found a suitable estate agency but still wish to negotiate the fee? Our tip: Ask what the tariff is for an exclusive contract. An exclusive contract means that you will not hire any other agent – in this case, many estate agencies are ready to accept your fee.