Experienced realtors, specialists who help search for housing and prepare documents for a property transaction – are highly valued in Dubai’s and UAE markets. Now, when due to the pandemic, travelling across the world may be challenging, the realtor’s service has become especially important. In this article, you will find out who pays a commission to a realtor when selling an apartment or house, what is the amount of a broker’s commission and whether a realtor is required to present when signing a sale contract.
The real estate service in Dubai is controlled by Law No. 85 of 2006. The document regulates all aspects of the services provided by these specialists. For instance, it indicates the function of a real estate agent in Dubai as well as the most important nuances of their cooperation with the client.
So, according to this law:
The law also clearly stipulates the financial obligations between the agent and their client. For example:
The document also states in which cases you may not pay the agent:
The control of such transactions in the emirate is carried out by the Real Estate Regulatory Agency (RERA), a division of DLD. To conclude the transaction, the broker must prepare and submit three forms of the contract: A, B and F:
Emirati legislation does not oblige buyers and sellers of real estate to hire agents to conclude a transaction. The parties themselves can sign a Memorandum of Understanding, after that the buyer pays a deposit – about 10% of the total amount. Then, if it is a second home or resale property under construction, you must obtain a No Objection Certificate (NOC) from the developer. Without this document, it is impossible to register the transaction with the Land Department. In the Certificate, the developer confirms that he has no claims against the seller, who, in turn, has closed all his financial obligations.
Nevertheless, the participation of a broker in this process is desirable. An experienced realtor will not only select the best option matching the client’s budget and requirements, but also protect you from possible mistakes in preparing all the necessary papers as for those who are not familiar with the real estate market of the emirate, it can be difficult to understand all the intricacies.
The amount of remuneration to the broker, as a rule, is 2% of the value of the property, unless otherwise provided by the contract. As a rule, an additional 5% VAT may be charged.
The realtor’s commission in Dubai is usually paid by the buyer. However, there are no clear rules in this regard – by agreement between the seller and the purchaser, the commission can either be divided between the two parties, or it can be taken over by the one who puts the property up for sale. If housing is purchased directly from the developer, then the agency fee is not charged.
However, this information is relevant if the parties are doing business with the same broker. If the interests of each participant in the transaction are represented by different professionals, they are remunerated by their direct employers. In other words, the agent’s commission when selling an apartment or villa falls on the seller if they hire a separate specialist to find a buyer.
The commission is paid to the agent, as a rule, when the keys are handed over. Payment is usually made by the so-called manager’s check: its difference from any other is that with its help the bank confirms the presence of the required amount in the account. The principal amount can also be paid in the same way – the buyer draws up a manager’s check in the name of the developer or owner.
Other additional fees may include:
If you are interested in buying a property in Dubai or another emirate of the UAE, please contact Ax Capital real estate agency. Professional brokers will select an ideal property for you according to your requirements and organize the entire process of buying and registering property.