How Much is a Real Estate Agent Commission in Dubai

The Real Estate Market has been known for its profits for a few years in Dubai. Real estate agents serve a crucial role in guiding potential clients in buying, selling, and renting designated properties.  People yearn to know what commission real estate agents earn from the business. Property commissions are charged as a percentage of the property’s final ore rental price. 

The commission is paid once the buyer legally acquires the property. Commission is split between the company and the agent at 50:50. Commission rate may vary depending on property type, location, and the agent’s services.

Standard Commission Rates for Real Estate Agents

Standard commission rates vary, but their normal range lies somewhere between 2% and 10%, depending on the type of property and its value. The standard commission rates depend on the following:

Residential sales

The standard commission rates for residential areas are commonly 2% of the retail price. The rate is negotiable according to the specifications of the agent and the client.

Rental transactions

The standard commission rates for rental transactions are commonly 5% of the annual rent or a fixed amount of AED 5,000. The lodger, when signing the contract along with the security deposit pays the fee. 

Commercial properties

Commercial property commissions are complex and higher than residential commissions. This includes office, warehouse, and industrial property sales and rentals requiring more time and prudence. The commission ranges somewhere between 2% to 4%. Usually, it is 10%, and the lodger pays the full amount.

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Who Pays the Commission?

The parties involved in the transaction process pay the commission fees to the agent. The following are the responsibilities of the buyer and the seller:

Buyer’s Responsibility

Buyer pays the commission when buying land in Dubai. The amount is agreed upon in the earlier stages of the transaction.

Seller’s Responsibility

The seller pays the commission, covering extensive costs for the property. The cost includes professional photography and videography, advertising, events and digital marketing campaigns. This commission is negotiable.

Factors Influencing Commission Rates

The real estate market in Dubai fluctuates tremendously, and several factors are causing this change.

Property Type and Value

The property type and value affect the rate considerably. Higher-value properties have lower commission rates and lower-value properties have higher commission rates. For example, a villa of AED 5 million may have a commission rate of 1.7%, and an apartment costing AED 30,000 may have a commission rate of 3.7%.

Location and Property Demand

The location and property demand also affect the rates. The areas with high demand have a low commission rate and those with lower demand may have a higher commission rate. 

Agent Experience and Services Offered

The real estate agent’s experience and services offered also influence the commission rate. The more experienced the agent is, the higher their commission rates are. Additional services such as property management or advertising cost higher commission rates.

Roles and Responsibilities of Real Estate Agents

Real estate agents play a major role in Dubai’s real estate market. They are responsible for various things, including lodger’s property purchases, sales, or rentals. Agents also fulfill some other roles and responsibilities.

Marketing and Sales Responsibilities

The most crucial role of an agent is the advertisement of the land. They need to acquire excellent marketing skills to attract potential buyers or renters. They must be able to negotiate and close deals. The marketing resources include social media, TV ads, newspapers, direct mail or online listings.

Property Management and Tenant Relations

Real estate agents are also accountable for managing properties and maintaining positive lodger relations. They make sure the land is maintained and the lodgers are satisfied with the purchase in every way. They also resolve any disputes between both parties.

Continued Education and Training

Real estate agents must keep themselves up-to-date with the changing industrial trends and regulations. Dubai offers training and licensing courses. Bayut Academy serves as an excellent training facility for real estate agents to polish their skills.

Additional Costs and Fees Apart from Real Estate Agent Commissions

The buyer and the seller must know any additional costs and fees associated with the transaction. These costs may change over time depending on the transaction type and the type of property. The next section discusses the common additional costs and fees associated with real estate transactions in Dubai.

Dubai Land Department Fees

Dubai Land Department Fees (DLD) are the most crucial cost linked with real estate transactions and the seller pays this fee. It is calculated as the property’s retail price. DLD rate is 4% of the property price, split between the buyer and the seller, at 2% each.

Mortgage Registration and Other Associated Costs

Mortgage registration and other associated costs in Dubai are some of the other additional costs. The buyer pays this fee. It is calculated as a percentage of the mortgage amount. The cost ranges from 0.25% to 0.5% of the mortgage amount, depending on the bank and the specific mortgage product. Other costs include property valuation and legal and real estate agent fees.

Special Considerations for Different Property Types

Here are the things you should consider for commissions in Dubai’s real estate market:

Residential vs. Commercial Properties

Real estate commissions vary for residential and commercial properties in Dubai. Commercial properties have higher commission rates than residential properties. Commercial properties require additional work. Commercial property commission rates vary from 4% to 6% of the retail price, and residential areas have a commission rate between 2% and 3%. 

Off-Plan Sales and Commission Implications

Off-plan sales and their commission implications are very popular in Dubai. This commission is split between the buyer and the seller. Off-plan sales are more complex than the usual property sales. An experienced agent is required in this field. 

Conclusion

The commission rates may vary depending on the growing economy, market rates, and changing trends in Dubai. Real estate agents charge commissions depending on their interests and level of expertise. When dealing with such transactions, one must be knowledgeable about real estate agent commissions for proper financial planning. 

Frequently Asked Questions

What is the commission for real estate agents in Dubai?

The commission commonly is 50% of the total value of the commission for the said transactions. If a property is sold for AED 10,000,000, the buyer has to pay AED 200,000 and the agent gets 100,000.

How much do estate agents earn in Dubai?

Real estate agents in Dubai can earn an average monthly salary of AED 15,000 but these values are not absolute as they may change depending on market trends.

What percentage do most real estate agents charge?

The average real estate commission is 2%-3%. 

Is it worth being a real estate agent in Dubai?

The real estate market is flourishing and becoming a RERA-certified real estate agent offers tremendous benefits and profit gains.