Broker commission

Estate agents in the UAE are paid by commission on completed deals. The amount is not fixed by statute: Dubai's brokerage rules leave it to the agreement between the parties and, failing that, to market custom. Custom is well settled.

• Resale purchase. The buyer pays their agent 2% of the price plus 5% VAT. The seller may pay their own agent a similar or lower fee under Form A. On a home priced at AED 2 million the buyer's commission is AED 40,000 plus AED 2,000 VAT.
• Off-plan purchase from a developer. The developer pays the agent. The buyer pays no commission and should not be asked for one.
• Lettings. The tenant usually pays the agent around 5% of the first year's rent.

UK readers will notice the difference: in Britain the seller alone normally pays the estate agent. In Dubai a buyer should budget for commission alongside the 4% transfer fee.

The fee is recorded in Form B or in Form F, and under Dubai's rules becomes payable once the sale is registered, unless the contract says otherwise. Pay it to the brokerage company at transfer, by cheque or bank transfer, never in advance to an individual.

Two cautions. Commission is negotiable, particularly on higher-value property. And because developers pay agents on off-plan sales, sometimes at higher rates for particular projects, an agent's enthusiasm for one launch over another is not neutral. Only deal with a broker whose licence you have checked on Dubai REST or, in Abu Dhabi, DARI.