Homefront: ‘How much commission does an agent charge for selling a property?’

The industry norm in the UAE is for the buyer to pay a 2 per cent fee plus VAT

Female sales agent meeting with clients in front of a house for sale. All are wearing masks to protect from the transfer of germs.
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I am considering buying a property in Dubai, but do not understand the commission rates that real estate agents charge. I have been searching online for guidance on this issue, and wondered if the Real Estate Regulatory Agency has set a fixed percentage that can be charged by agents.

At the moment, all I am seeing is that it could be anywhere between 2 per cent to 5 per cent. Why isn't it a set amount and is it possible to negotiate with a broker on the commission? Are both the seller and buyer charged a commission – if so, is it the same amount? AJ, Dubai

With reference to broker’s commissions, I can confirm that the standard industry norm in the UAE is currently 2 per cent plus VAT and is normally payable by the buyer. That said, any broker who charges more than 2 per cent is not breaking any rules. The commission payable is a contract between two parties and as long as both parties agree, the fee can be whatever is decided.

Broker fees in the UAE are, in fact, one of the lowest when compared with other parts of the world such as the US and Europe, where the fees start from 5 to 6 per cent and sometimes even more for primary market sales.

It is worth noting that agents here in Dubai are charging sellers, too, and this is perfectly legal. Rera states that a broker can charge both buyer and seller as long as the parties are aware of the facts and have agreed to the same.

In the primary market, many developers offer much higher fees than 2 per cent to brokers, often doing so to entice agencies to focus on their inventory over the competition.

When it comes to negotiating fees, this largely depends on the actual transaction and, of course, on a case-by-case basis, but I would point out that there is no harm in asking the question if the fees are negotiable.

This agreement of fees should be noted on Rera form B, which is the contract between the buyer and the broker when initially engaging their services. The fees of the buyer and/or the seller should normally be the same, but again this is not necessarily set in stone and there could be many reasons why this is not the case. The fees attached to a seller should be agreed and mentioned on Rera form A.

The fees of the buyer and/or the seller should normally be the same, but again this is not necessarily set in stone

The last point I would like to stress is the misconception of buyers that they need to speak to a multitude of brokers in order to get the best deal. Doing this often has the opposite effect. My advice is to pick one agency and one broker and stick with them. In the event that the broker doesn’t have the inventory or properties that you like, this is not the end of the world as often brokers will work with their counterparts from different companies in order to find the required property.

Make sure you pick a broker registered with Rera and ideally use someone via a recommendation. Broker profiles can be found on property listing portals such as Bayut or Property Finder. Build a rapport and trust between the two of you, which I guarantee will lead to a successful sales conclusion.

Mario Volpi is the sales and leasing manager at Engel & Volkers. He has worked in the property sector for more than 35 years in London and Dubai. The opinions expressed do not constitute legal advice and are provided for information only. Please send any questions to mario.volpi@engelvoelkers.com