Paying realtor commission in Dubai – A complete guide

The real estate agents in Dubai are experts who assist in the search for a home to buy and prepare documentation for a property transaction, which is highly regarded. It can be difficult to purchase a home abroad. Choose an experienced realtor as a result to ensure a secure and easy home sale. Find out who pays a realtor’s commission when purchasing a home or apartment in this post. You’ll also learn how much a broker’s commission is and whether a realtor must be present while signing a sale contract.

In what ways is the UAE’s realtor industry governed?

Dubai’s real estate industry is governed by Law No. 85 of 2006. All facets of the services offered by these specialists are governed by the document. For instance, it outlines the duties of a real estate agent in Dubai as well as the key details of their client-cooperation relationship. To know the accurate value of your property, you can also opt for property valuation in Dubai by experienced agents.

As a result, under this law:

In order for the specialist to be paid, the client must sign a contract with the broker, and the contract must be registered with the Dubai Land Department (DLD);

If more than one broker is hired to perform services under a single agreement, they are all jointly liable for the work performed;

The parties’ names, information on the property, and guidelines for the rendering of real estate services must all be included in the brokerage agreement.

The financial obligations between the agent and their customer are also expressly laid forth in the legislation. For instance:

Unless otherwise stated in the papers, the broker is entitled to payment after signing the contract of sale and submitting it to the Department. The realtor is not entitled to remuneration while the contract is in progress unless this need has been satisfied;

Only the party who gave the broker permission to mediate the transaction may pay the broker for their services. The regulation also applies in the opposite direction; if such consent is granted by both parties, each of them will be completely accountable to the broker for the payment of the remuneration due, even if they determine that only one of them will pay the whole remuneration.

Everyone is entitled to compensation, and the sum must be distributed among them in line with the contract if numerous experts participated in discussions on behalf of one party and their efforts resulted in the purchase of real estate in Dubai.

The agent who successfully completed the deal would be compensated in full if the party entered into an agreement with multiple agents.

The document also lists the situations in which you may not be required to pay the agent:

If the broker violates their duty to the party they represent by acting on behalf of a third party, they forfeit their entitlement to compensation or expense reimbursement. Similarly, an agent is not eligible for payment if their services did not result in an agreement between the parties. In this situation, the broker is likewise ineligible to receive reimbursement for costs. When all of the terms of the contract are accepted by the parties to the discussions, the contract is deemed to have been reached.

In Dubai, who covers a realtor’s commission?

Unless otherwise specified in the contract, the broker will typically receive 2% of the property’s value as compensation. Typically, an extra 5% VAT may be applied.

Typically, the buyer in Dubai foots the bill for the realtor’s commission. There are no set laws in this regard, however, and depending on the seller’s and buyer’s agreement, the commission may be shared equally or retained by the party who lists the property for sale. The agency fee is waived if housing is acquired straight from the developer.

If the parties are working with the same broker, this information is significant. If various specialists are hired to represent the interests of each party to the transaction, their direct employers will pay them. In other words, if the seller hires a different specialist to locate a buyer, they are responsible for paying the agent’s commission when selling an apartment or villa.

Typically, the commission is given to the agent when the keys are delivered. Payment is typically done via a “manager’s check,” which differs from all other options in that it allows the bank to certify that the required amount is in the account.

The buyer writes a manager’s check in the name of the developer or owner to pay the principle in the same manner.

Other additional costs could consist of:

a real estate registration fee; a tax to the Land Department equal to 4% of the value of the property plus an administration charge of AED 580 for homes and offices, AED 430 for land plots, and AED 40 for projects that are still under development.

Dubai Land Department Mortgage Registration Fee: 0.25% of the loan amount plus AED 290; for real estate valued at less than AED 500,000, AED 2,000 + 5% VAT; for real estate valued at more than AED 500,000, AED 4,000 + 5% VAT;\

Fees for issuing a Certificate of No Objection are normally between AED 500 and AED 5,000. Commission for processing transactions is between AED 6,000 and AED 10,000.