In this article, I‘ll introduce you to the topic of commissions so that you have all the information you need when dealing with a Czech real estate agency. I’ll guide you through what the normal amount of commission is in the Czech Republic, what it includes, and to who and when you need to pay it.
The commission charged by Czech real estate agencies and agents varies, and it is usually influenced by factors such as the property’s value and the confidence of the agency or agent. Typically, there’s a standard commission that’s considered reasonable. Along with the basic percentage, it’s important to account for the statutory VAT at 21%, which is added to the commission. So, if the commission stands at 3% + VAT, the overall commission totals to 3.63%, with 0.63% being the VAT portion. Here’s what you can generally expect in terms of commission amounts:
- Typically, for real estate valued between CZK 3,500,000 and CZK 15,000,000, the commission ranges from 3% + VAT to 5% + VAT.
- Regarding properties priced between CZK 2,000,000 and CZK 3,500,000, the usual commission is from 4% + VAT to 5% + VAT.
- For real estate valued between CZK 800,000 and CZK 2,000,000, the standard commission is 5% + VAT. It’s worth noting that you might encounter a minimum commission, such as CZK 80,000 + VAT.
- When it comes to properties priced up to CZK 800,000, you should anticipate a minimum commission ranging from CZK 50,000 + VAT to CZK 80,000 + VAT. In such cases, there might be a more limited range of real estate agency services available (such as homestaging or professional photoshoots).
At this point you may wonder whether it’s better to pay a higher commission or go with a cheaper real estate agency. There’s no one-size-fits-all answer here. It’s about people, and it depends on your personal preferences. You might find a real estate agent who offers a complete package, selling at a good price with a lower commission, such as 3% + VAT. On the other hand, you might run into an agency that doesn’t offer great service but asks for a higher commission, more like 5% + VAT. So, it’s about choosing an agency that gives you the best value for your money. What really matters isn’t whether it’s 3% + VAT or 4% + VAT, but whether the end result is favorable for you as a seller – getting the best price for your property within a reasonable time.
What is included in the services of a real estate agency in the Czech Republic?
Here I will list the standard of services offered by a good quality Czech real estate agency:
- Understanding the seller’s requirements thoroughly to tailor the sale accordingly.
- Placing strong emphasis on preparation, including a price analysis, verifying tax implications, confirming legal status, assessing property modifications, and compiling a comprehensive property dossier.
- Implementing high-quality marketing strategies such as professional photography, homestaging, video and virtual tours, well-crafted floor plans, detailed descriptions, adding listings on major property platforms and social media promotions.
- Engaging effectively with potential buyers, conducting property tours with knowledgeable insights, maintaining professionalism, providing regular updates to the seller, and analyzing the progress of the sale.
- Reconciling the interests and timing preferences of both buyers and sellers.
- Facilitating a smooth property transfer, including secure handling of deposit boxes.
- Ensuring the smooth completion of the entire property transfer process.
The real estate agency should cover all costs with the sale, i.e. the seller should not incur any additional costs from the sale. The same applies to the buyer; the real estate agency should not transfer any costs to them.
Who pays the real estate commission in the Czech Republic?
The commission is usually paid by the seller, and that’s only fair. The seller is the customer of the service, they choose the broker and the broker acts in their favor. However, there are real estate agencies that have built their advertising campaign on the fact that the seller does not pay the commission. But beware, this is just a play on words. The buyer has a maximum budget for the purchase, e.g. CZK 5,000,000, and they do not really care whether they pay CZK 5,000,000 to the seller and the seller then pays CZK 180,000 of it to the real estate agency, or the buyer pays the seller only CZK 4,820,000 and the real estate office 180,000 CZK. The costs for the seller will remain the same in both cases.
When is a real estate agency entitled to commission?
The right to a commission only arises after the whole transaction is successfully completed, which for the seller is the day they receive the money from the sale in their bank account. Unfortunately, most real estate offices set this deadline earlier, e.g. on the day of signing the purchase contract. At that time, however, the property has not yet been paid for and the sale has not even been successfully registered with the cadastre, so this deadline is very premature. We recommend that you inquire about the term of entitlement to the commission before concluding the contract.
The KOTULA real estate agency has a commission of 3% + VAT on the sale price of the property. The commission includes all costs of selling the property, including quality marketing. The commission is payable only after the transfer of the property and receipt of the purchase price on the account.
We wish you the best of luck in choosing the right real estate agency for your needs. If you are thinking about selling a property, you can get in touch with us here at KOTULA Real Estate, and we will be happy to assist you and guide you through the sale.
Photo: Anton Estrada via Canva.com
