The average commission rate practiced in France in 2022 amounted to 5,78% of the sale price, compared to nearly 4% in the rest of the European Union, recalls the Authority, based on several studies.
In 2022, the government had asked the Autorité to look into the subject in order to respond in particular to the evolution of the "real estate brokerage" market - the support of players allowing a seller and a buyer to reach a transaction.
The competition policeman has identified several "problems", including the opacity of the commission rates applied, the asymmetry of information between the different players and the fact that they are not all subject in the same way to the Hoguet law, which has regulated real estate sales since the 1970s.
These difficulties are particularly linked to the emergence of "new professions" in real estate (online agencies, "real estate coaches", agents, etc.), not subject to the same legal provisions as traditional real estate agencies, but which can be mandated by agencies. Their services are then included in the commissions, sometimes in an opaque way.
The high fees weigh on French consumers, pointed out the Competition Authority in its report, submitted to the Ministry of the Economy last week and published on Wednesday.
“If the commission rates for intermediary professionals in France were brought down to the European Union average, an annual gain of nearly 3 billion euros could be generated for the benefit of households”, estimates the Authority in this opinion, which has the value of recommendation.
The Authority proposes "a reform" aimed at "giving households the choice to determine what they want to do themselves and what they want to delegate to intermediaries, to regain control of their budget", explains Thibaud Vergé , the vice-president of the Authority.
The report therefore suggests, in particular, establishing an exhaustive list of the services rendered by professionals, standardizing the rules for displaying advertisements, in particular online, or even making public real estate data already held by notaries on the prices of sales and commissions.
All with the aim of "reducing the asymmetry of information" and "clarifying the scope of the Hoguet law", underlines Benoît Coeuré, the president of the Competition Authority.
Industry professionals fight back
The National Real Estate Federation, the National Union of Real Estate Professionals and the Union of Real Estate Unions, like the entire profession, have taken note of the opinion of the Competition Authority "on the competitive situation of the real estate intermediary market", at a time when access to housing is compromised for many French people, faced with an unprecedented slowdown in transactions. Convinced that the model of the transaction framed by regulated real estate agents is the pillar of consumer safety, the profession asks to be received by Bruno Le Maire as soon as possible.
The Autorité de la concurrence proposes a complete overhaul of the economic model of the transaction. This has always been based on a global service, reassuring for the consumer, and in fact, on a global remuneration, only on the result.
“Let's remember an essential element: the range of services provided by professionals during a transaction is not limited to mediation alone” underline the representatives of the profession. “Our mission includes a global service, advice and support until the finalization of the act. If it is settled only when the transaction is carried out (whether it is settled by the buyer or the seller), it actually covers the entire process. Our highly competitive activity guarantees the best price and freedom of choice of intermediation, or not, and provider. The satisfaction rate expressed by our customers is 92,8%! [1]”.
The margins of these companies are among the lowest in Europe [2].
Loi Hoguet: safety at the service of consumers above all
The Autorité de la concurrence defines real estate brokerage as “the selection of customers and the negotiation of the selling price”. Such a vision of intermediary is particularly reductive, a fortiori today. Buying a property has become a long, complex process, with obligations at each stage to support, advise and secure the consumer, to fight against scams, fraud, terrorist financing and money laundering.
The division of the service, recommended by the Autorité de la concurrence, would lead to a major upheaval on the market, to the detriment of the consumer, without checking the advisability of securing a global service.
“Can you imagine an actor doing the evaluation, a second marketing, a third showing people around, a fourth checking the easements, a fifth checking the technical condition of the accommodation, a sixth drafting the sales agreement, etc?! Do we seriously think that the consumer will be more secure and that he will gain purchasing power? Who will bear the responsibility? ask the representatives of the profession.
By attacking the Hoguet Law, the Autorité de la concurrence is committing a fundamental error. Through all of its rules and the requirements it imposes on real estate professionals, this law is above all a guarantee of security for consumers.
“The Competition Authority seems to completely forget that the Hoguet Law, which regulates real estate professionals, is a police law, consumer safety. Cutting up the transaction will not lower the price of housing. “Alert the representatives of the profession.
Growing constraints and lack of confidence: danger in the real estate sector
Obligations and constraints weigh more and more on real estate professionals in order to guarantee supervision and security of the real estate journey of French people. "Wanting to deregulate real estate professionals, what guarantees will we leave to the consumer?" wonder the professional unions.
The real estate sector, driven by the good health of the market, has been a source of jobs and public revenue in recent years, which the State has always observed favorably.
The trade unions in particular point out that the profession itself was at the initiative of strengthening training to protect consumers and support them economically and technically. It should be added that the State has still not published, for almost ten years, a decree provided for by the ALUR Law in 2014 on the training of authorized employees.
Real estate agents are players in energy renovation and good housing in France, guides in the enhancement of heritage, facilitators of the residential journey. The Loi Hoguet has always been able to adapt to meet the needs of the French.
Representatives of professionals are determined to defend access to secure housing by regulated professionals, in the interest of consumers are mobilized to ensure the defense of all professionals.
In 2022, 75% of French people trusted professionals for their real estate projects [3]. “And the customer is never wrong! »
[1] Source: Opinion System – March 2023 (sample of 225.500 customer reviews checked for the FNAIM)
[2] Source: Eurostat 2015-2019
[3] Source: NOTICE 23-A-07 OF JUNE 2, 2023 concerning the operation of the French real estate brokerage market.