Introduction: A Shocking Development in the Real Estate Industry
This week, news shook the real estate world:
Police raids at Engel & Völkers—on suspicion of false self-employment.
As a real estate agent with over 18 years of industry experience, I wanted to share some background and personal insight on my YouTube channel Immobilientagebuch.
Because what’s happening here doesn’t just concern Engel & Völkers. It’s about an entire system that has shaped the way many brokerages operate.
What Happened?
At the request of the Bielefeld public prosecutor’s office, customs authorities raided 18 Engel & Völkers offices across Germany.
The accusation: Real estate agents who were officially listed as “freelancers” might in fact have been working as employees—without proper contracts, and without social security contributions.
Over 300 investigators were involved, questioning staff and securing documents.
What Is False Self-Employment?
False self-employment (in German: Scheinselbstständigkeit) occurs when someone is registered as a freelancer or independent contractor but actually works like a regular employee, including:
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Set working hours
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Bound by instructions
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No entrepreneurial risk
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Only one client/employer
Why is this a problem? Because the state loses social security contributions—for pension, healthcare, unemployment, and nursing care insurance.
It’s a legal gray area that can have severe financial consequences for employers.
Engel & Völkers: A Franchise Model Under Pressure
Engel & Völkers doesn’t operate like a single company—it’s a franchise system.
Individual licensees run offices under the E&V brand and often hire so-called “independent real estate consultants”—often on a commission-only basis, with contracts resembling commercial agents.
From the outside, it may look like one big company. But internally, it’s highly decentralized, and each franchisee is legally and financially responsible.
How This System Works (and Why It’s Risky)
Many young agents enter the industry as “independent contractors.”
They:
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Work on commission
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Pay their own taxes and insurance
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Use the office infrastructure (phone, email, branding)
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Work exclusively for one brokerage
This exclusivity can quickly cross the legal line into false self-employment.
My Personal Experience in the Industry
When I started in real estate at 26, I entered the business in exactly this way—as a freelance agent, highly motivated but with no steady income.
The first six months?
I earned nothing. I was learning, networking, figuring it out.
And yet, I was expected to act like an employee:
To be there, to follow guidelines, to use company systems.
Why This Model Was Attractive (Until Now)
For brokerages:
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No fixed payroll costs
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No employer social contributions
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No risk
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Only pay when deals close
For agents:
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Easy entry into the industry
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Flexible hours
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High earning potential
But—legally unstable, as the raids now show.
The Reality Behind “Freedom”
Often, this so-called “freedom” exists only on paper.
Agents:
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Work only for one company
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Use the company’s tools and systems
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Are expected to follow internal processes
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Have little to no independence
From a legal standpoint, this can qualify as an employment relationship—with consequences.
What Could This Mean for the Industry?
The Engel & Völkers case might just be the tip of the iceberg.
It could force the industry to rethink its employment structures.
One possible solution:
Employ agents as salaried staff with a base salary + commission model.
Some brokerages already use this system—including mine.
Why I Switched to Salaried Employees
In the past, I also worked with freelancers. But I realized:
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There was little long-term loyalty
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Some built their own competing business on the side
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I carried the risk—without control
Today, all team members at Koch & Kollegen are salaried employees.
In property management especially, fixed roles and responsibilities are essential.
What’s Next for Engel & Völkers?
The investigation is ongoing. But one thing is clear:
It’s going to be expensive.
Each franchisee is individually liable. That means:
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Possible back payments
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Penalties
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Even bankruptcy in extreme cases
Some may downsize. Others may switch to salaried employment. Some might leave the business altogether.
Conclusion: The System Is Changing
This raid is more than a one-off. It’s a warning.
The old model of “independent” agents working like employees is no longer sustainable.
Going forward, we’ll need:
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Legal clarity
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Fair employment models
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Real accountability
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And the courage to evolve
To Young Agents: A Word of Encouragement
Yes, this business is tough.
Yes, the rules are changing.
But with honesty, persistence, and a willingness to learn, you can still thrive in real estate—without cutting corners.
Thanks for Reading – Let’s Keep Talking
If you found this insight valuable, feel free to comment, share, or check out my YouTube channel “Immobilientagebuch”.
Because real estate is more than deals—it’s people, systems, and integrity.
