Introduction: Why Do You Need a Real Estate Agent for Buying Property in the UAE?

The United Arab Emirates, and particularly Dubai, is a global hub for real estate investments. However, the local market has its unique features, legal nuances, and high dynamism. Without a qualified real estate agent in the UAE (broker) who holds a DLD (Dubai Land Department) license, virtually no property transaction can be completed.

A realtor not only helps you find a property but also handles negotiations, verifies legal compliance, assists with documentation, and ensures the transparency of the transaction. Naturally, these services come at a price.

Real Estate Agent Service Costs for Property Purchase/Sale in the UAE

The amount of a real estate agent's commission in the UAE is generally not fixed by law across the entire country, but clear standards have been established in the market, especially in Dubai.

Standard Purchase Commission

The most common practice in Dubai is a commission of 2% of the property value.

• Who Pays: Traditionally, this commission is paid by the buyer. However, in some cases, the seller may also pay their share, or the commission may be split.

• Additional Fee: An additional VAT (Value Added Tax) of 5% of the commission amount is often added to the standard 2% commission.

Special Rules for Off-Plan Properties (New Developments)

If you buy a property directly from the developer (on the primary market), the situation changes in your favour:

• The commission for the buyer is often 0%.

• The developer usually covers the real estate agent's fees. This makes buying new developments through an agent more financially attractive for the investor.

Special Rules for Secondary Market (Ready Properties)

When purchasing on the secondary market, the 2% commission + 5% VAT is the standard paid by the buyer. The seller may also pay a commission to their own agent, which can range from 0% to 2-4% of the sale price (depending on the agreement).

Important: In Dubai, in addition to the realtor's commission, the buyer must pay a mandatory Property Transfer Fee (DLD Fee), which is 4% of the property value and is paid to the Dubai Land Department.

Real Estate Agent Service Costs for Rental Properties in the UAE

For those planning to rent accommodation in the UAE, the services of a real estate agent are also necessary, and different tariffs apply here.

Standard Rental Commission

For residential property rentals in Dubai, the most common commission is 5% of the annual rent amount.

• Who Pays: This commission is typically paid by the tenant (the one who rents the property).

• VAT: Unlike purchase and sale, VAT (Value Added Tax) is generally not charged on the agent's commission for residential rentals.

Calculation Example: If the annual rent for an apartment is $30,000, the realtor's commission will be: $30,000 * 5% = $1,500.

Property Management (for Landlords)

If you are a property owner and entrust the realtor with full management (finding tenants, maintenance, repairs, reporting), their remuneration will be higher and may range from 8% to 15% of the annual rent. This depends on the scope of services provided.

Tips on How to Optimise Realtor Costs

1. Work with New Developments: If you are an investor, buying off-plan will allow you to avoid paying the realtor's commission, as it is covered by the developer.

2. Clarify Before Starting Cooperation: Always sign a written agreement (MOU - Memorandum of Understanding) that clearly states the commission amount, who pays it, and at what point.

3. Compare Offers: While 2% is the industry standard, a slight negotiation or individual arrangements may be possible for very expensive or illiquid properties.

4. Use Licensed Agents: Make sure your realtor has an RERA (Real Estate Regulatory Agency) license to ensure your costs are protected and the transaction is legal.

Conclusion

The cost of a real estate agent in the UAE is approximately 2% for purchases (paid by the buyer) and 5% for rentals (paid by the tenant). These tariffs are generally accepted and provide access to professional services necessary for the safe and effective execution of transactions in the Emirates' real estate market. Always remember the additional 4% DLD fee for purchases and the VAT on the realtor's commission.