What estate agent commissions do I need to budget for when buying a property as my own home?

Who pays the estate agent? The facts

The Swiss standard model: the seller pays

In contrast to Germany and other European countries, the Swiss real estate market almost universally applies the so-called "orderer principle". This means that whoever orders the music also pays for it. In 95 per cent of cases, the seller commissions the estate agent to sell their property. Consequently, it is also the seller who owes the commission.

For you as a buyer, this means that you usually do not have to budget for a direct estate agent commission. In the usual advertisements on platforms such as Homegate or ImmoScout24, the estate agent's services are free of charge for you as a prospective buyer. You receive the exposé, the viewing and the consultation without ending up with a bill for an estate agent commission.

The exception: the search request (search mandate)

However, there is one important exception where you do have to pay a brokerage commission. This is the case if you turn the tables and hire a broker yourself.

If you don't have time to search yourself or want access to off-market properties, you can hire a "search agent". In this case, you are the client. The search mandate contractually stipulates that you owe a brokerage commission on the purchase if the search is successful. This is usually between 1.5% and 3% of the purchase price or is agreed as a flat fee. In this case, the brokerage commission on the purchase is a conscious part of your strategy and not a hidden fee.

Hidden costs: the indirect brokerage commission on the purchase

Even if you do not receive an invoice with the subject line "brokerage commission on purchase", you often still pay for it in economic terms. How does this work?

A seller who hires an estate agent includes their fee (usually 2% to 3% of the sale price) in the asking price.

• Example: A house is valued at CHF 1,000,000. The estate agent costs CHF 30,000. The seller lists the house for CHF 1,030,000.

You transfer the entire amount to the seller, but you are indirectly financing their expenses. However, an explicit estate agent's commission does not appear anywhere – neither in the purchase contract nor on a separate invoice. This is important for your bank financing: the bank finances the purchase price (provided it corresponds to the market value), but it would not finance a separate estate agent's commission.

Be careful with "double brokerage"

One term you should be aware of when it comes to estate agent commission is "dual agency". The Swiss Code of Obligations (CO) is strict in this regard. An estate agent is not allowed to charge both parties (buyer and seller) for the same transaction unless this has been expressly disclosed and approved by both parties or if it conceals a conflict of interest.

If a broker attempts to charge the seller a commission and at the same time charge you a brokerage commission, caution is advised. This is unusual in the regular residential property market and often dubious. Reputable brokers will never charge you a brokerage commission if they have already been mandated by the seller.

Difference to neighbouring countries (important for newcomers)

The Swiss regulations on estate agent commission are often surprisingly positive, especially for newcomers from Germany.

• Germany: For a long time, it was common practice for the buyer to pay up to 7.14% commission. Although this is now often split between the buyer and seller, estate agent commission remains a cost factor.
• Switzerland: Here, estate agent commission is unheard of for buyers (except in the case of a search mandate).

If you are moving to Switzerland as an expat, you can confidently remove this item from your budget. However, do not confuse the estate agent commission with the notary and land registry fees – these are still payable and must be borne by you.

What does the reservation agreement say?

A critical moment with regard to the estate agent's commission is the signing of the reservation agreement. Sometimes, unscrupulous actors try to hide fees here. Read the small print carefully. A deposit for the reservation is normal (and is credited towards the purchase price). However, there must be no clause that converts this deposit into a "processing fee" or a hidden brokerage commission if the purchase does not go through. The money must be earmarked for the purchase.

Negotiation tactics and estate agent commission

Can you lower the purchase price by pointing out the estate agent commission? Since the commission is included in the price, you theoretically have some leeway. If you negotiate directly with the owner (without an estate agent), you could argue that they should save themselves the commission and meet you halfway on the price. However, if an estate agent is involved, their fee is fixed by contract. You can negotiate the price, but the argument "save yourself the estate agent commission" does not work here, as the seller is bound by contract.

Summary of the costs for you

To be clear, in 99 out of 100 cases, your cost breakdown will look like this:

• Purchase price: 100%
• Notary/land registry: approx. 0.5% - 3.5% (depending on the canton)
• Estate agent commission on purchase: 0.0%

There is no legal obligation for the purchaser to pay a brokerage commission on the purchase. If someone sends you such an invoice, check the mandate. If you have not signed anything, you do not owe any brokerage commission on the purchase.

Conclusion

Fear of estate agent commission on purchase is usually unfounded in Switzerland. The market model protects you as a buyer from direct additional costs incurred by the agent. As long as you do not sign an explicit search request, the estate agent's services are free of charge for you – they are financed indirectly via the purchase price.

Nevertheless, be vigilant: do not sign anything you do not understand and make sure that there are no hidden estate agent commissions lurking in the reservation agreement. Enjoy the advantages of the Swiss system and use the money you save for notary fees or furnishings.

If you need help finding commission-free property listings, Loft can help you find your dream property transparently and securely.

Glossary

• Brokerage commission (courtage): The success fee for the estate agent. In Switzerland, this is usually paid by the seller and amounts to 2–3% of the sale price.
• Orderer principle: The principle that the person who commissioned the estate agent pays them. As it is usually the seller who places the order, there is no direct estate agent commission for the buyer.
• Search mandate: A contract in which you, as the buyer, commission an estate agent to find a property for you. In this case, you must pay an estate agent commission on the purchase.
• Dual agency: When an estate agent works for both the buyer and the seller at the same time and collects from both. This is often not permitted without disclosure and consent.
• Reservation agreement: Preliminary agreement to secure the property. This may not contain any hidden brokerage commission for the purchase, only a deposit on the purchase price.