What you need to know before engaging an estate agent in Greece

What you need to know before engaging an estate agent in Greece

• A real estate brokerage agreement must be concluded in writing.
• The agreements must include details of the contracting parties (Tax Identification Numbers (TIN), Broker’s GEMI number, description of the property, type of main contract (e.g. sale or lease) for which the agent shall provide his/her services).
• The Brokerage fee (which can be either a certain amount or a percentage of the price of the main contract to be signed), is freely negotiable. A usual practice is that the brokerage fee is calculated at 2% of the price of the main contract. The fee is payable when the main contract is concluded if the broker mediated or introduced the opportunity.
• As far as the duration, Greek Law provides that if the parties do not agree otherwise, the duration of the agreement is 12 months with the possibility of an extension of 6 months unilaterally by the principal. If the duration of the agreement exceeds the above-mentioned limit, either party has the right to terminate it without compensation after the lapse of twelve (12) months. The effects of such termination take place after a period of three (3) months.
• Real estate agents are allowed to be instructed by both the seller and the buyer in the same transaction, which creates an obvious state of conflict. It is possible and advisable to agree with the estate agent not to act for the counter party in a transaction, even in exchange for a higher commission.
• The law provides the possibility for an exclusive brokerage agreement, under which the principal is not entitled to assign another broker, nor to act personally or through a third party on their behalf in seeking an opportunity for as long as the agreement remains in force, while the broker is obliged to actively pursue the execution of the mandate. Exceptions to the prohibition of third-party activity on behalf of the principal are allowed only if they concern natural or legal persons expressly named in the agreement. The duration of an exclusive brokerage agreement may not exceed eight (8) months, with the right of extension for an additional four (4) months upon unilateral written declaration of the principal; after its expiry, a new agreement may be concluded. If the main contract is concluded during the term of the exclusive brokerage agreement, it is presumed to have been concluded through the indication or mediation of the exclusive broker, unless the main contract was concluded with one of the persons expressly mentioned in the exclusive brokerage agreement, for whom it was agreed that the principal may act personally. In the latter case, the broker is entitled to claim reimbursement of all expenses incurred for the promotion of the property, in addition to reasonable compensation, which may not exceed one-third (1/3) of the agreed fee, with the total amount not exceeding one-half (1/2) of the agreed fee. If the main contract is concluded within three (3) months after the expiry of the exclusive brokerage agreement, and in the meantime the principal has assigned a mandate to another broker, then the (first) exclusive broker is entitled to remuneration only if it is proven that the conclusion of the contract resulted from their own actions.
• An exclusive mandate by the seller to the estate agent has advantages and disadvantages. The advantage is that the agent may be more motivated to find a buyer and thus invest more in advertising. The disadvantage is that the property depends on the performance on one person. Multiple (non-exclusive) mandates to more than one estate agent, may “kill” the product and create a small mess, but unfortunately it is a commonplace.
• Some estate agents are marketing properties without mandate from the seller, list properties that are for sale (copy paste from other agents’ listings) and seek to obtain it after a buyer approaches them.
• Estate agents operate in certain areas and are not usually familiar with other areas outside this range. For assistance in choosing an area where to buy or rent a property, it is better to consult bigger estate agency firms, so that you receive independent advice.
• Usual estate agent’s fee for finding a property to rent is 1 months’ rent for rentals that are of a duration of over 3 years. For shorter term tenancy agreements, the fee should be less.
• Engaging a trusted lawyer before finding a property is advisable, so that the estate agent’s terms and conditions for engagement are reviewed before commitment.
• If a buyer sees a listing in a newspaper or estate agents’ website / newsletter, they will see the contact details of the agent. If they express their interest to the estate agent after the mandate is over, the agent will normally ask them to extend the mandate before they put the parties in direct contact.
• It is important for a buyer to ask if the agent has exclusivity over the property or if the seller has appointed multiple agents.

 

 

 

* The information is accurate to the best of our knowledge as at the time of writing. We have no obligation to update it. We accept no responsibility against any third party who is not a client of the firm and has not signed the terms of our engagement.