Are you thinking about buying or selling a house in Dubai? If so, you might be wondering how much real estate commission in Dubai you will have to pay.
Don’t worry, it’s not too hard to understand! In this blog post, we will explain everything you need to know about Dubai’s real estate commission.
Understanding Real Estate Commission in Dubai
First, let’s talk about what real estate commission is. Basically, it is the money that a real estate agent gets paid for helping someone buy or sell a property. The commission is usually a percentage of the total price of the property.
For example, if a house sells for 1 million dirhams and the commission rate is 2%, the real estate agent would get paid 20,000 dirhams (which is 2% of 1 million).
Who Pays Real Estate Commission in Dubai To Agents?
In Dubai, the seller usually pays the real estate commission to the agent. This means that if you are buying a house, you probably won’t have to pay any commission.
But if you are selling a house, you will have to pay the commission to the real estate agent.
How the commission is typically split between the buyer’s agent and the seller’s agent?
Sometimes, there are two real estate agents involved in a sale – one who is helping the buyer and one who is helping the seller. In this case, the Dubai real estate commission is usually split evenly between the two agents.
So if the total commission is 20,000 dirhams, each agent would get 10,000 dirhams. But sometimes, the seller’s agent might get a little bit more than the buyer’s agent.
Real Estate Commission Rates in Dubai
Okay, now let’s talk about the actual real estate commission in Dubai. The rates can be different depending on the type of property and where it is located.
Standard commission rates for residential properties
For regular homes and apartments, the standard Dubai real estate commission rate is usually between 2% and 5% of the total price of the property.
So if a house sells for 1 million dirhams, the commission would be somewhere between 20,000 and 50,000 dirhams.
Standard commission rates for commercial properties
For commercial properties like office buildings or stores, the real estate commission is usually a bit higher. It is usually between 5% and 10% of the total price of the property.
Any variations in commission rates based on property value or location
Sometimes, the commission rate might be lower for really expensive properties. For example, if a house is worth more than 10 million dirhams, the commission rate might be only 1% or 2%.
Also, in some parts of Dubai, the commission rates might be a little bit different. For example, in really popular areas like Downtown Dubai or Palm Jumeirah, the rates might be a bit higher.
What if multiple agents are working on the same property/listing?
Sometimes, more than one real estate agent might be trying to sell the same property. In this case, the agents usually agree to split the real estate commission between them.
For example, if two agents are working on selling a house and the total commission is 20,000 dirhams, they might agree to split it 50/50, so each agent would get 10,000 dirhams.
What is an Agent to Agent agreement (Form I)?
An “Agent to Agent agreement” or “Form I” is a special agreement between two real estate agents who are working together to sell a property.
This agreement says how they will split the real estate commission in Dubai between them.
Tips on how to negotiate commission rates with real estate agents
If you are selling a property, you might be able to negotiate a lower Dubai real estate commission rate with your agent. Here are some tips:
- Shop around and talk to different agents to see who offers the best rate
- If your property is really expensive or in a popular area, try to negotiate a lower rate
- If you are also buying a property with the same agent, see if they will give you a discount on the commission for your sale
- Remember, even a small difference in the commission rate can save you a lot of money!
Conclusion
In conclusion, the real estate commission in Dubai is the money that real estate agents get paid for helping people buy and sell properties. In Dubai, the seller usually pays the commission, and the rate is usually between 2% and 5% for homes, and 5% and 10% for commercial properties.
If you are selling a property, it’s a good idea to try to negotiate a lower commission rate with your agent. And remember, even though commission can seem like a lot of money, a good real estate agent can help you sell your property faster and for a better price, so it’s usually worth it in the end!
Also Read: 15 Reasons Why Should You Invest in Dubai Real Estate
