Opinion | The Agency Fees in Real Estate

This is the opinion of the writer. I will be talking about the good and the bad of real estates, about the maximum agency fee an agency can ask from you and why it’s recommended to pay it (answer: so you can sleep safe at night).

I have been working in the Real Estate business in Luxembourg for several months as growth manager, marketer & sales person. Whenever I mention I’m in this field, people are saying that I’m working in an unsafe environment full of sharks. Then when I post on social media one of the nice apartments we have, I receive 50 messages. When I’m saying there will be an agency fee, only 2 people remain interested.

On one hand, I can totally understand this fear. Yes, there are agencies who are trying to screw you up badly and they are doing it. But just like in love, you have to find that agency that you can trust and that doesn’t have any interest of messing with you. I truly believe that where I’m working we are doing our best in not screwing the client. Like this, I can sleep at night.

I have two recent examples concerning the bad side:

  1. A real estate agent from the competition is trying to rent an apartment and get a double agency fee. Why that? I don’t know, I didn’t ask. The maximum fee for a renting contract an agency can get is the value of one month’s rent + VAT. And that’s that.
  2. My co-worker was searching for an apartment to rent. She found it through another agency and then she wanted to pay the first month of rent, the caution of three months following as well. The agent insisted to receive the money in cash, otherwise there will be a no-go. My co-worker accepted, finally, but with the condition to receive an invoice. The agent said an invoice will be issued when they will get the keys as well. Change of plans, my co-worker doesn’t want the apartment anymore and now asks for the first month of rent to be paid back (she didn’t stay one single day in the apartment). What month of rent? There is no proof whatsoever that this payment has been done, since there are no “traces”, just my co-worker and her husband as witnesses.

Cases like this happen, sadly, quite often. And I can understand the fear or this “barrier” that stops people from choosing an agency.

But what are some of the good sides? Why should you pay the agency fees?

  1. You have a well established renting contract. We have a lawyer working with us on the contracts to ensure that everything is up-to-date and that both the renter and the owner are on the winning side. If one doesn’t respect his / her side of the deal, there will be a penalty.
  2. As an owner, you have the confidence that the agent will check the files and send you the most suitable candidates, according to your needs. No pets? Ok. Dogs allowed? Great. But besides this “matching” that we are doing (and that in the future could be done by an app), there is also the legal part that we are establishing and the follow-up.
  3. Follow-up. I may not be an expert in internet providers, but I can give you my opinion on who is the most responsive in this specific town. I may not be an expert in city halls issues, but I can give you the right response if you’re new in the town and you need a vignette for your car. The customer relationship doesn’t end when you sign the contract, we are there when needed. It doesn’t come with the job description, it simply comes as a human being.

To sum up, there are good people and bad people. Furthermore, there are good agencies and not-so-good agencies. You might be lucky from the start or you might need to try again. In case you want to start looking or to try again, we are here.

If you had a bad experience and you’d like to share it or if you’d like to find out more about our services, contact me at m.mezaros@parcimmo.lu.

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