Kasha,  Monday, 11 November 2013

 

This article is part of a series of 6 articles about buying property in Poland. The other articles in the series cover the following topics:

Property Buying Guide
Overview of the Polish real estate market
Buying Process
Costs
Applying for Home Financing in Poland

It is not necessary in Poland to go through real estate agents when buying or selling property, however it may be the preferable solution for those who want to save time or/and are not knowledgeable about the local market. Buying through an agency gives the parties security, since the agents are usually insured and bear responsibility for any mistakes or problems with the transaction.

The real estate agents will typically collect a commission equivalent up to 3.5% of the property sales price plus 23% VAT on the fee, each from the buyer and the seller. In some cases the fee can be negotiated and in other cases the agent will only take commission from the seller.

In exchange, they offer access to large databases of property for sale and perform a number of functions during the purchase process. The role of the agent is to find the right property, to review its legal information in the Mortgage and Land Registry and to prepare the preliminary and final sales documentation (together with the notary).

Once the preliminary sales agreement is signed, the agent provides the buyer with all the documents related to the property that are needed to apply for the bank loan. Some real state agencies will also offer bank loan advisors to help in the selection of the bank and the appropriate loan offer. Once the bank financing is secured, the agents prepare all the necessary sales documents and they arrange for a notary meeting to sign the final contract. After the sale is finalized, the agents prepare the property handover protocol, including the handover of the utility meters (e.g. heating, water, electricity etc.) The agents may also handle the handover with the utility companies.

In Poland, there are largely two types of real estate firms: small or family-run real estate companies and large real estate chains. The latter are characterized by a high percentage of employees who work under the supervision of a licensed real estate agent, but who in fact and not licensed to broker real estate. Those companies are also characterized by high employee turnover but also lower commission rates.

Before hiring a real estate agent to assist in purchasing property in Poland, it is advisable to do some research. The most important factors include checking whether the agent:

is certified, i.e. has a state-issued license allowing him/her to broker real estate transaction. The license would preferably be acquired before 2008, meaning that the agent had to pass state tests, which were removed as requirements in 2008;
has third party liability insurance (in Poland known as “OC”); such insurance will protect the buyer’s finances in case the agent makes a mistake (e.g. if the client buys a mortgaged property under his watch);
has proven experience and specializes in the type of property the buyer is trying to purchase (e.g. residential, luxury, agricultural, etc.);
is a member of the Polish Real Estate Brokers Association – a national association which obliges agent to behave ethically and expels those who don’t;
cooperates with other real estate companies, giving him access to a wider database of properties and saving the buyer from signing contracts with multiple real estate brokerage companies;
has physical headquarters which clearly states their field of work. All reputable agents will have physical offices;
signs a written agreement with the client, preferably such which doesn’t give the agent exclusivity over the buyer (i.e. allowing the client to hire other real estate firms as well as seek properties by themselves) and which releases the buyer from any fees or penalties if they buy a property which was not found by the real estate firm.