To begin, fees in Poland are different from other countries and a basic rule of thumb is that buying or selling will cost you 3 % + VAT of the sale/purchase price whilst renting or letting will cost a months rent + VAT. These are headline costs and as we will explain, there is lots of room for negotiation. Additionally, being aware of these fees can be very important when deciding to sell or let as your buyer or renter will certainly include this information in their decision making.
We would add another feature of the process is that any agent you contract to help can do a deal on your behalf with another agency agent and in most cases they just split the total commission when a deal is completed.
In the second of our series we will look at
Buying your Property
There are essentially two types of properties. New developments and second hand properties.
Straight off the bat we would suggest that you should NOT pay commission on buying a new Development. Developers sell the apartments themselves and also use agents, whom they pay a commission to. Agents know that buyers can go directly to a Developer so they do not normally charge a commission. It is for this reason that you should definitely use an agent. You get all the benefit of their wisdom and expertise, along with legal potholes without any extra charge.
For second hand properties, things get a bit more complicated. There is paperwork from the courts, valuation reports, building reports (a broken chimney is not always obvious etc.). If you are well connected you may be able to get your lawyer to do the paperwork but on an hourly rate this can sometimes add up. We would suggest that you definitely get either a lawyer or a property agent to help you but agree a fixed fee beforehand.
How can a Polish property agent help you ?
When buying any property it is certainly worth having someone who knows the process to help. Agents in Poland are allowed to represent and collect fees from both buyers and sellers of a property. This, we would suggest can easily lead to conflict of interest.
A good agent can ensure that you find the property you want, or at least a good selection based on your requirements. They will arrange property visits, negotiate the price, check the ownership in the courts on the day of signing any agreement, arrange the notary and translator and any valuers/ engineers you need to feel comfortable moving forward. If they are representing both sides then be aware that an agent is primarily trying to get the deal closed at the highest price, in that order.
One way of ensuring that you are not paying too much is to get an official valuation done. Even if you are not getting a Polish mortgage it may still be worthwhile. For added security, consider a small mortgage. This ensures the bank will check all of the elements of the purchase too. If the bank wont lend you money because of the price of the property then maybe you should consider walking away too.
Is this worth 3 % of a purchase price?
Assuming you are buying for zl. 500,000 commission will be zl. 15,000 + VAT (zl. 18,450 gross) (Less if you go through BigDoor24.pl). That's a lot and if you add in the fact that the seller may also be paying the same amount then that's almost 7.5 % in total of the available budget going to property agents.
The answer really lies in your level of confidence in buying your own property, your access to the property professionals ( lawyers, notaries, valuers etc.) and good access to information on pricing and negotiating skills.
Can you negotiate?
Property brokers know generally how long the process of buying each type of property is going to take. If it's a second hand apartment that is relatively new then the process will be easier than a farmhouse in the countryside beside agricultural land.
But they want the same fee. Assuming you are pretty clear about what it is you want to buy then it is worth having a conversation with the agent at the beginning and once you have outlined your requirements, ask for a fixed fee that reflects the work involved. A good agent will say no if you go to low but a bad one may not and you will end up with nothing so don't try and low-ball too much. One tactic may be to ask them to suggest a fee that they would be comfortable with. You may be surprised how low they may go. Just engage with one agent rather than lots of them and tell them that they are exclusive. This again can help keep the fee lower and result in a successful process.
Help the Seller, help yourself.
Try to find out through your agent why the seller is selling. If time is a factor this may help you in negotiations. Make an effort to get to know the seller a bit as they are more likely to accommodate someone they like rather than a complete stranger. Enquire what the seller wants to do with the fixtures and furniture and ask as many stupid questions as you can think of as there may not be time later for re-negotiation. Polish sellers regularly take the curtain fittings, plugs or mirrors with them when selling unless already agreed to so do not assume anything when negotiating.
And don't forget, by referring a successful Polish Mortgage applicant to us, BigDoor24.pl, you get zl. 250 and they get zl. 200 for every zl. 100,000 they borrow. Register for more details and Like us now on Facebook for regular articles on working and living in Poland.
The value of a property agent can be quite a subjective decision but hopefully the above will help you get the most from whatever decision you make. We have lots more articles in our Blog section that may also help in your adventure.