Charges of Tanzania Brokerage Industry

Most residential real estate firms in Tanzania residential sellers a concessional of 5% to 10% of the selling price. Agents seem to compete for business on every dimension except commission rates with claims of faster sales, higher selling prices, or better service.

Commission rates in many developing countries with no public records and no reliable Multiple Listing Services, such as Tanzania and Uganda, fluctuate between 5% and 10%. Sometimes the agency fees may run even higher than 10% among the real estate agents due to the lack of proper information in the market.

In Tanzania there is no any Law or regulatory body to supervise Real Estate Agency activities.In non-Tanzanian countries, it appears that the commission rates are lower when the information within the market is more efficient, open, and reliable.

Many developing countries, like Tanzania, without Multiple Listing Services system, show the highest commission rates (10%). This makes sense in a market where information is costly and unreliable, and transactions are burdened by a high government bureaucracy.Globally, we see much lower residential commission rates in most of the highly industrialized nations, including the United Kingdom, Hong Kong and Dubai.

Kenya is the only east African country with the low commission fee of 3% for the sellers.Fees in Hong Kong, typically 1% for the seller, are among the lowest in the world even with the extra charges for lawyers typically incurred at closing. In the UK, the commission rates average less than 2%.

The seller is often required to pay for some advertising costs up front without a contingency for this fixed charge, which lowers the risk of the broker spending money that may not be recovered through a successful sale.The Tanzania residential brokerage fees should run closer to 3%, if the typical Tanzania agents were as productive as those in Kenya, the brokerage fees would be closer to 1.5%.

International Residential Real Estate Brokerage Fees Comparison
[TABLE="width: 100%"]
[TR]
[TD]Country[/TD]
[TD]Commission Fee (Sale)[/TD]
[TD]Commission fee ( Rent)[/TD]
[TD]Comments[/TD]
[/TR]
[TR]
[TD]Tanzania[/TD]
[TD]10%[/TD]
[TD]One (1) Month's Rent[/TD]
[TD]Negotiable[/TD]
[/TR]
[TR]
[TD]Kenya[/TD]
[TD]3%[/TD]
[TD]One (1) Week's Rent[/TD]
[TD]Negotiable[/TD]
[/TR]
[TR]
[TD]Uganda[/TD]
[TD]10%[/TD]
[TD]One (1) Month's Rent[/TD]
[TD]Negotiable[/TD]
[/TR]
[TR]
[TD]South Africa[/TD]
[TD]7.5%[/TD]
[TD]12% of the Monthly Rent[/TD]
[TD]Negotiable[/TD]
[/TR]
[TR]
[TD]United Kingdom[/TD]
[TD]1.5%[/TD]
[TD]10% of the Rental income over Letting Term[/TD]
[TD]Negotiable[/TD]
[/TR]
[TR]
[TD]U.S.A[/TD]
[TD]6%[/TD]
[TD]One (1) Month's Rent[/TD]
[TD]Negotiable[/TD]
[/TR]
[TR]
[TD]Dubai[/TD]
[TD]2%[/TD]
[TD]5% of Annual Rent[/TD]
[TD]Negotiable[/TD]
[/TR]
[TR]
[TD]Hong Kong[/TD]
[TD]1%[/TD]
[TD]Half of One (1) Month's Rent[/TD]
[TD]Negotiable[/TD]
[/TR]
[TR]
[TD]India[/TD]
[TD]2%[/TD]
[TD]Two (2) month's Rent[/TD]
[TD]Negotiable[/TD]
[/TR]
[/TABLE]

For more real estate information click the link below.
DarProperty: East Africa's Ultimate Property Guide