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What is meant by a tipster commission?

Obtaining new sales orders is time-consuming for real estate agents, but is of great importance. That is why every real estate agent is happy to be contacted by an intermediary, through whom he or she can obtain a sales order.

A tip commission is paid by a real estate agent to a tipster in return/remuneration for putting him in contact with the buyer or seller of a property. The betting commission is either a lump sum or a certain percentage of the purchase price and is paid out by the real estate agent to the bettor upon completion of the sale.

Example: Within your family, friends or acquaintances you learn that a property is to be sold and inform the real estate agent of your choice or recommend him/her directly. If the real estate agent receives an order to sell on the basis of your recommendation, you will receive a tip commission as a tipster when the order is placed and/or when the property is successfully sold.

How high is a tipster commission in the real estate sector?

The amount of the tipster commission can be freely agreed. In most cases, the sales price achieved is used as the basis for the betting commission. The betting commission is either a flat rate or a fixed amount or is determined as a percentage depending on the purchase price.

However, there are also tipster models in which a tip commission is paid in installments. For example, a small flat-rate betting commission (fixed amount) already when a sales order is concluded and the remainder of the betting commission when the property is successfully sold and the real estate agent receives the commission (conclusion of a sales contract).

A usual tip commission is often between 5% and 10% of the purchase price.

Example: The selling price of the real estate amounts to € 250.000. The real estate agent receives a brokerage fee of about 6 % percent (net commission), thus 15.000 Euro. If you receive a tip commission of 10% of this commission, your tipster commission is € 1,500.

Are the type and scope of the tipster commission regulated by law?

There is no uniform legal regulation. It is advisable as a tipster to have the amount and method of payment of the tipster commission confirmed in advance.

Is a tipster commision taxable?

A tipster commission of up to € 256 Euro per year may be taken tax-free. Beyond this amount, a tipster commission is taxable as other income. A distinction must also be made between whether the tipster acts occasionally or with the intention of making a sustainable profit and thus a commercial activity. If this is the case, the betting commission is also subject to VAT.

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