Most people do not think about real estate commissions until they are in the middle of a transaction. When this occurs, a figure is thrown about, usually in the range of 2% or greater, and a series of questions ensue: who pays this fee? Can this fee be negotiated? What exactly is being provided by the real estate agent to warrant this fee? And what about when there is a dual agency situation and two real estate agents are involved—how is this split determined?
These questions are all legitimate ones to ask and concern the real estate commission as one of the major costs of a transaction. The answers to these questions will generally lie with the person who has a better overall understanding of the structure of real estate commissions and how they operate in the United Arab Emirates and Dubai in particular, as this is where the rules and regulations are well established and must be well understood prior to engaging in a transaction of this nature.
This guide will outline how real estate commissions operate in the United Arab Emirates and specifically in Dubai and how this structure is regulated and governed by the appropriate authorities and what you can do if you believe this structure is not appropriate and how you can take steps to ensure you pay no more or less than you should in this transaction and whether or not the real estate agent representing the other party is acting in your best interests or otherwise.
A major factor to note is that real estate commissions in Dubai are indeed regulated by the Real Estate Regulatory Agency (RERA), and there is a set fee structure in place. There is indeed flexibility in this structure and can be negotiated in some areas, but much of what can or cannot be negotiated is not and indeed should not be negotiated in order for you to ensure you pay no more or less than you should in this transaction and to have a better overall understanding of the rules and regulations in this area as the first step in ensuring you do not fall prey to being taken advantage of by the real estate agent representing the other side of the transaction.
The UAE property market processed over 180,000 real estate transactions in 2023 according to the Dubai Land Department, a record at the time. Every one of those transactions involved commission. That's a lot of money moving through a structure most participants don't fully understand.
What the Standard Commission Rate Is in Dubai
Let's start with the numbers, because that's what most people want to know first.
The standard real estate commission rate in Dubai is 2% of the transaction value, paid by the buyer. That's the RERA-established norm for residential property transactions. On a AED 3 million property, that's AED 60,000 in commission. On a AED 7 million property, it's AED 140,000. These are not small numbers, and they come on top of the 4% Dubai Land Department transfer fee that the buyer also typically pays.
For rental transactions, the standard commission is 5% of the annual rent value, again paid by the tenant. On an annual rent of AED 120,000, that's AED 6,000 in agency fees. Some landlords choose to cover this cost themselves to make their listing more attractive to tenants, but the 5% norm is well established.
Commercial property transactions use a different rate. The standard for commercial sales is also 2%, but commercial leasing commissions are typically 5% to 8% of the annual lease value depending on the size and complexity of the deal.
These rates apply per side. If there are two agents involved in a transaction — one representing the buyer and one representing the seller — the commission structures can work in a few different ways, which we'll get into in the next section.
Here are the standard commission benchmarks to know:
- Residential sale: 2% of purchase price, paid by buyer
- Residential rental: 5% of annual rent, paid by tenant
- Commercial sale: 2% of purchase price, standard across most deals
- Commercial lease: 5% to 8% of annual lease value depending on deal size
- Off-plan sales: typically 2% to 4%, often paid by the developer rather than the buyer
- Holiday home or short-term rental management: 15% to 25% of rental revenue, ongoing
- Property management fees (long-term): 5% to 10% of annual rent collected
- Re-sale transactions: same 2% norm applies regardless of building age or type
- Luxury or ultra-high-value transactions: some negotiation possible above AED 10 million
- Dual agency (one agent representing both sides): same total commission, split internally
How Commission Gets Split Between Agents
This is the part most buyers and sellers never see, and it matters more than people realise.
When two agents are involved in a transaction — a listing agent representing the seller and a buyer's agent representing the buyer — the commission needs to be split between them. How that split works determines a lot about how each agent behaves during the deal.
The most common structure in Dubai is what's called a co-brokerage arrangement. The buyer pays 2% commission to their agent. The seller pays 2% commission to their agent. Each side pays their own agent directly. That's the cleanest structure and the one that creates the clearest incentive alignment — each agent is financially accountable to the party they're representing.
The problem is that this isn't always how it plays out in practice. In some transactions, a single agent represents both the buyer and the seller simultaneously. This is called dual agency. The agent collects commission from both sides, or sometimes a higher single commission split internally within their agency. The obvious conflict of interest here is that an agent can't simultaneously negotiate the best price for a buyer and the highest price for a seller. One of those clients is going to get a worse deal.
Dual agency is legal in Dubai but it needs to be disclosed. If you're working with an agent who is also representing the other party in your transaction and they haven't told you that, that's a red flag worth taking seriously. Always ask your agent directly whether they are representing any other party in the deal.
In off-plan transactions, the commission structure is different again. Developers typically pay the agent's commission directly, which means the buyer often pays no commission at all on off-plan purchases. The developer builds the commission cost into the property price at the margin, but it doesn't appear as a separate line item for the buyer. This is one of the financial attractions of buying off-plan for some buyers, though it also means the agent's financial relationship is with the developer, not with you.
Key points about commission splits:
- Co-brokerage: buyer pays their agent 2%, seller pays their agent 2%, cleanest structure
- Dual agency: one agent represents both sides, legal but must be disclosed, clear conflict of interest
- Off-plan: developer pays agent commission directly, buyer typically pays nothing separately
- Sub-agency: a referring agent passes a client to a listing agent and receives a referral fee, usually 25% to 50% of the total commission
- Internal splits: within a brokerage, individual agents typically receive 50% to 70% of the commission they generate, with the balance going to the agency
- Negotiated splits: in large or complex deals, the commission split between agencies can be negotiated between brokerages before the deal closes
- Transparency obligation: agents are required under RERA rules to disclose their commission arrangement to all parties
What RERA Says About Commission and Agent Registration
The Real Estate Regulatory Agency governs how agents operate in Dubai, including how they earn and collect commission. This matters because it means there's a legal framework protecting you as a buyer, seller, or tenant — if you know what it says.
First, every real estate agent operating in Dubai must hold a valid RERA licence. This isn't optional. An unlicensed agent cannot legally collect commission, and any commission paid to an unlicensed agent is not protected under UAE law if a dispute arises. Before you work with any agent, ask to see their RERA ID card or check their registration status on the Dubai REST app. It takes about 30 seconds and it's worth doing.
Second, commission should always be paid by cheque made out to the brokerage, not to the individual agent personally. This is a RERA requirement and it creates a paper trail that protects both parties if a dispute arises later. If an agent asks you to pay commission in cash or to make a cheque out in their personal name, that's a significant warning sign.
Third, Form A (listing agreement), Form B (buyer representation agreement), Form F (memorandum of understanding), and Form I (final commission agreement) are the standard RERA forms that govern the agency relationship and commission obligations in a transaction. These forms need to be signed before an agent can legally claim commission on a deal. If you're a seller and your agent hasn't asked you to sign a Form A, they don't have a legitimate basis to claim commission if you sell the property. Know your forms.
Barbara Corcoran, one of the most recognised real estate investors in the United States and a long-time Shark Tank investor, has made the point repeatedly that the best agents earn their commission and the worst ones just collect it. The difference, she argues, is preparation, market knowledge, and genuine advocacy for the client. That distinction applies just as much in Dubai as in New York.
What RERA requires agents to do:
- Hold a valid RERA real estate licence (renewable annually)
- Register every listing on the Dubai REST platform before marketing it
- Use standard RERA forms for all agency agreements and transaction documents
- Disclose any dual agency arrangement to all parties before proceeding
- Collect commission via cheque to the brokerage, not personal cash payments
- Provide a signed Form F (MOU) before any deposit is taken from a buyer
- Maintain professional indemnity insurance as required by their brokerage licence
- Complete mandatory RERA training hours annually to maintain their licence
- Not list a property without a signed Form A from the seller
- Not claim commission on a transaction where they were not the effective cause of the sale
Is Commission Negotiable in Dubai?
Technically yes. Practically, less than people expect.
The 2% buyer commission and 5% tenant commission are RERA norms, not legally fixed ceilings. An agent can agree to work for less, and some do in competitive situations or for high-volume investors who bring repeat business. But the margin for negotiation is narrower than in markets like the US or UK, where commission rates vary much more widely and buyer-agent compensation is currently going through significant structural change.
In Dubai, the bigger lever is usually not the rate but the service. A 2% commission paid to an agent who knows the building, has relationships with motivated sellers, negotiates effectively on your behalf, and handles the paperwork cleanly is better value than 1.5% paid to someone who sends you listings you could have found yourself and disappears after the MOU is signed.
That said, there are situations where negotiation is reasonable and expected. Very high-value transactions above AED 10 million, investors completing multiple transactions through the same agent in a short period, and situations where the agent is representing both sides of the deal are all contexts where a reduced rate is worth asking about.
What's not negotiable is the obligation to pay commission once you've signed a representation agreement and the agent has fulfilled their obligations. Disputes over commission that was agreed in writing and earned through genuine agency work rarely end well for the party trying to avoid paying.
Scott McGillivray, Canadian real estate investor and television host, has noted that the agents who consistently deliver results don't discount their fees — they justify them. The ones who immediately offer to cut their commission when challenged often do so because they can't articulate what they actually do to earn it.
Negotiation guide for buyers and sellers:
- Standard rate: 2% for sales, 5% for rentals — these are the starting points
- High-value sales above AED 10 million: 1.5% to 1.75% is sometimes achievable
- Repeat investor clients: reduced rates are common for volume business, worth asking for directly
- Dual agency situations: total commission should not exceed standard single-side rates
- Off-plan purchases: no buyer commission to negotiate, developer pays the agent
- Never negotiate by withholding payment after the fact — disputes belong in RERA's dispute resolution centre
- Get the agreed commission rate in writing in the Form B or Form A before proceeding
- Low commission doesn't always mean better value — consider what the agent is actually delivering
Red Flags to Watch Out For in Commission Arrangements
Most agents in Dubai operate professionally and transparently. But the market is large enough and the transactions valuable enough that bad actors exist. Knowing what to look for protects you.
The clearest red flag is an agent who can't show you a valid RERA licence. Walk away immediately. There is no legitimate reason for a practising agent in Dubai to be unlicensed, and working with one exposes you to legal and financial risks that aren't worth taking.
An agent who asks for commission before the transaction is complete is another warning sign. Commission is earned at completion. Some agents ask for a small upfront retainer for exclusive buyer representation, which is legitimate if documented. But a full or partial commission payment before keys have been exchanged and transfer documents signed is not standard practice.
Watch out for phantom listings. These are properties advertised at attractive prices that don't exist or aren't available, used to generate enquiries and then switch buyers to different properties once they call. RERA has taken action against this practice, but it still happens. If a property disappears from the listing the moment you call about it, or the agent immediately tells you it's just been sold but they have something similar, be sceptical.
Finally, be cautious about verbal agreements on commission. Everything should be in writing on the appropriate RERA form. A verbal agreement that commission will be X percentage holds very little weight if a dispute arises, and disputes over commission are not uncommon in a market where transaction values are high.
Red flags checklist:
- Agent cannot produce a valid RERA licence number on request
- Request for commission payment before transaction completes
- Pressure to sign documents quickly without time to read them
- Phantom listings — properties that vanish the moment you enquire
- Commission demanded in cash or payable to an individual rather than the brokerage
- Agent refuses to disclose whether they are representing the other party
- No signed Form A on a seller listing or Form B on a buyer representation
- Promises of guaranteed outcomes or fixed price results before viewing the property
- Agent discourages you from seeking independent legal advice on the transaction documents
- Commission rate significantly above the RERA standard without clear justification
How to Make Sure Your Agent Is Actually Earning Their Commission
Knowing the commission structure is one thing. Making sure you're getting value for it is another.
A good agent in Dubai does more than show you properties. They know recent transaction prices in the buildings they work in, not just asking prices. They have relationships with other agents that give them early access to listings before they hit the portals. They negotiate on your behalf with knowledge of where the seller's real position is, not just their opening ask. They manage the paperwork, coordinate the NOC process, and make sure the DLD transfer happens on schedule.
That's a real service worth paying for. The way to test whether your agent is delivering it is to ask direct questions early. What have similar units in this building sold for in the last three months? What's the realistic negotiation range on this asking price? Have you dealt with this seller or their agent before? What's the typical timeline for NOC from this developer?
Vague answers to specific questions are informative. So is an agent who knows the answers without having to look them up.
If you're looking for an agent who knows the Dubai market and can walk you through a transaction from search to handover, our team of agents work across all major areas and price points. And if you want to understand the full buying process before you start, our buy property service lays it out step by step.
Our Take on Commission in the Dubai Market
Commission is a cost of doing business in real estate, and in Dubai, it is stringently regulated. The standard commissions of 2% for buyers and 5% for tenants are a reflection of the value of professional agency in a market where transactions are complex, values are high, and legal implications are present in documentation that gets compromised.
The buyers and sellers who achieve the best outcomes are not those who negotiate commissions most assiduously. They are those who find an agent who has real expertise in the market, are prepared to trust them enough to listen to them and allow them to do their job. This is a relationship that is worthy of investment, and paying a fair commission is part of it.
What's not acceptable is paying commission for a service that wasn't delivered, being misled about dual agency arrangements, or working with someone who isn't properly licenced to operate. Know the rules. Use the RERA forms. Ask the questions. And if something doesn't look right, the RERA dispute resolution centre exists precisely for situations where things go wrong.
If you have questions about how commission works in a specific transaction you're looking at, or you want to understand what a fair deal looks like before you sign anything, reach out to our team and we'll give you a straight answer.
