Susanne and I just got back from a trip to Austria. We visited family and spent a week in the Alps.
Austria is a great place for mountain hiking. First class hotels and excellent restaurants are plentiful where ever you go.
Here’s a picture of me hiking through a gorge near the Dachstein mountain.
The “Hometown” Real Estate Broker
Susanne and I grew up in a town called Mistelbach, 30 miles north of Vienna. It’s a county seat in the center of a wine growing and farming area.
To find out how the real estate business works in Austria we stopped by the local RE/MAX office.
The broker’s name is Franz Hugl. He has owned RE/MAX Best for 12 years and employs 10 agents.
Franz was glad to sit down with us and share his story.
How Real Estate is Sold in Austria
Terms The German term for real estate is Immobilien. The broker is called Makler.
Agents are employees not independent contractors. Franz said the Austrian government is strictly enforcing employment laws (of which there are many) and don’t allow agents to work as independent contractors.
Obviously, this creates additional expenses for the brokerage. The employer has to withhold taxes, as well as mandatory health insurance, social-security-like retirement insurance and more.
Commission Splits Due to the high cost of employing agents’ commissions are split 50/50. The brokerage pays for all advertising.
Commissions The typical rate is 3% for each side. However, the government charges VAT (value add tax) which is 20% in Austria. This means the seller has to pay 3% of the purchase price plus 20% of the commission.
Agent Income Franz told us his top agents make more than 100,000 Euros.
Austrian Housing Market
Listings Most listings are not exclusive. Sellers hire multiple brokers to market their properties. There’s no MLS, so a listing agent has to actively market the property to find buyers.
Buyer Agency When a buyer is represented by a real estate agent, the buyer pays the agent’s fees (usually 2 – 3%). The seller will not pay for the buyer agent’s commissions.
Leasing Franz is representing both landlords and tenants. Leasing commissions are usually one month’s rent or more, depending on the length of the lease.
Competition Although Mistelbach has only 10,000 inhabitants there are 11 real estate offices. Some are affiliated with banks. RE/MAX is the only global network to speak of and has excellent brand recognition.
Leads As Austrians do not move every 7 to 10 years as Americans do, there’s less turn over. Franz told us his best lead sources are probate (if the owner dies the heirs usually sell the property) and new built condominiums.
What do you think?
Is it easier or harder to sell real estate in Austria?
Reply with your thoughts!