How Real Estate Agents Are Paid (And What You Should Know)

Real estate agents play a vital role in Dubai’s booming property market—connecting buyers and sellers, negotiating deals, and ensuring legal compliance. But one of the most common questions asked by both property buyers and sellers is:

“How do real estate agents get paid?”

Understanding how agent commissions work is essential before entering into any property transaction. In this blog, we’ll break down everything you need to know about how real estate agents are paid in Dubai, who pays them, standard commission rates, and what it means for you.

1. Real Estate Agents Earn Commission-Based Income

In Dubai, real estate agents are not salaried. Their income primarily comes from commissions earned through successful property transactions. This motivates agents to close deals and ensures they work in their client's best interest—since they only earn when a transaction is completed.

2. What Is the Standard Commission in Dubai?

The Dubai Land Department (DLD) does not regulate agent commissions directly, but the industry standard is generally:

• 2% of the property’s sale price (residential sales)
• 5% of the annual rent (for rental transactions)

This commission is usually paid by the buyer in sale transactions and by the tenant in rental agreements—though it can be negotiable based on the deal and agent.

Example: For a property worth AED 1,500,000, the agent’s commission would typically be AED 30,000 (2%).

3. Who Pays the Commission: Buyer or Seller?

For Property Sales:

In most cases in Dubai:

• Buyers pay the 2% commission to the buyer’s agent.
• Sellers may also pay if they have appointed an exclusive seller’s agent.

In some off-plan deals, developers offer 0% commission to the buyer because they pay the agent directly for bringing clients.

For Rentals:

• Tenants usually pay the 5% agency fee.
• For luxury properties, this can sometimes be a fixed rate (e.g., AED 5,000 or AED 10,000).

4. Are There Any Other Fees Besides Commission?

Yes, buyers and sellers must also pay:

• DLD Transfer Fee: 4% of the property value
• Trustee Office Fee: AED 580
• NOC Fee (if applicable): AED 500–5,000
• Valuation Fee (if using a mortgage): AED 2,500–3,000

Agent commission is separate from these government fees.

5. What Happens If a Deal Falls Through?

If a buyer or seller backs out after signing the agreement, agents may still be entitled to partial commission based on the terms of the Form F contract (official RERA sales agreement).

Always read and understand your agreement with the agent before proceeding.

6. Tips for Dealing with Agent Commissions

• Always ask the agent what their commission is upfront.
• Get the commission amount in writing (on Form A or Form B).
• Confirm whether the commission includes VAT (5%) or is exclusive of it.
• For off-plan deals, check if the developer pays the agent, meaning you pay 0% commission.

7. What Does the Commission Cover?

You’re not just paying for property showings. A professional agent’s commission covers:

• Market research and area expertise
• Property sourcing and shortlisting
• Arranging and attending viewings
• Negotiating the best deal on your behalf
• Drafting and reviewing contracts
• Coordinating with banks, developers, and DLD
• Facilitating smooth title deed transfers

A good agent adds tremendous value, saving you time, money, and legal headaches.

8. Beware of Unlicensed or Unethical Agents

Only deal with RERA-licensed real estate agents. You can verify their registration through the Dubai REST App.

Unlicensed agents may:

• Overcharge commissions
• Misrepresent property listings
• Disappear after the deal

Work only with registered brokerages who provide official receipts and contracts (Forms A, B, F).

9. Can You Negotiate Commission?

Yes, in some cases—especially for high-value properties or if you’re buying multiple units, agents may reduce their commission. However, remember:

Lower commission doesn’t always mean better service.

You want someone committed and motivated to get you the best outcome—not someone cutting corners to undercut the market.

Frequently Asked Questions (FAQs)

Q: Can the seller cover the buyer’s commission?
A: While not standard, in some cases—especially off-plan deals—developers or sellers may absorb the buyer’s fee as an incentive.

Q: Are agent commissions refundable?
A: No. Once the deal is closed and the commission is paid, it is non-refundable.

Q: Do tenants pay agent fees every year?
A: Yes. Every time you renew or sign a new lease through an agent, you typically pay the 5% commission again.

Final Thoughts

Understanding how real estate agents are paid helps you make better, more informed decisions when buying, selling, or renting property in Dubai. It ensures transparency, trust, and prevents last-minute surprises.

A professional, licensed agent earns their commission by protecting your interests, navigating complex paperwork, and making your transaction smoother and safer.

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