Land Broker Commission and Profit
Question:
What is your opinion of commissions that a land broker takes? Legally in my country they are allowed to take 2% from both parties, buyer and seller. Is this islamically allowed? Moreover, sometimes these brokers strike a deal with the seller where he asks the seller how much he wants to sell the land for, so that if the broker can sell it for more than that price he keeps that extra amount. Sometimes, sellers, esp here in Bangladesh have no choice but to agree to these terms because all brokers look to make this deal. Sometimes by this way brokers end up making huge profit. Is this type of business where being a broker you do business with someone else's land and make huge profit allowed?
Answer:
A broker receives money for the added value that he is producing. That added value is in fact the service that he is giving to his customers. The service is to facilitate the buying of a land. There is nothing wrong with this as long as it is done within the legal framework of your country.
As for the broker asking the seller how much he wants to sell and getting the excess amount for himself, in principle this is allowed as long as the seller freely and with no pressure agrees with it and it is legal. There is in fact a narration from Ibn Abbas who describes similar situation and considers it to be fair, although there the proposal comes from the seller not the broker.
However if this is not legal or if the seller is not aware of it or if the seller is some how forced to propose a lower price for the property to be able to enter such a deal then morally this is not an acceptable business and therefore religiously it has to be avoided.
May God be satisfied with the family of the Prophet (pbuh) and his pious companions.
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May 2013
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What is your opinion of commissions that a land broker takes? Legally in my country they are allowed to take 2% from both parties, buyer and seller. Is this islamically allowed? Moreover, sometimes these brokers strike a deal with the seller where he asks the seller how much he wants to sell the land for, so that if the broker can sell it for more than that price he keeps that extra amount. Sometimes, sellers, esp here in Bangladesh have no choice but to agree to these terms because all brokers look to make this deal. Sometimes by this way brokers end up making huge profit. Is this type of business where being a broker you do business with someone else's land and make huge profit allowed?
Answer:
A broker receives money for the added value that he is producing. That added value is in fact the service that he is giving to his customers. The service is to facilitate the buying of a land. There is nothing wrong with this as long as it is done within the legal framework of your country.
As for the broker asking the seller how much he wants to sell and getting the excess amount for himself, in principle this is allowed as long as the seller freely and with no pressure agrees with it and it is legal. There is in fact a narration from Ibn Abbas who describes similar situation and considers it to be fair, although there the proposal comes from the seller not the broker.
However if this is not legal or if the seller is not aware of it or if the seller is some how forced to propose a lower price for the property to be able to enter such a deal then morally this is not an acceptable business and therefore religiously it has to be avoided.
May God be satisfied with the family of the Prophet (pbuh) and his pious companions.
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May 2013
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