Two Deals, Two Completely Different Commission Realities
Picture this: a Tuesday morning in a Dubai brokerage. One agent has just registered a buyer on a new launch in Business Bay. Another is pushing a resale villa in Jumeirah through to transfer. Both close the same week. Both earn what looks like a similar-sized cheque on paper. But the mechanics — who owes that cheque, who releases it, when it lands, and what happens if the co-broking agent on the other side of the deal decides the split was never really agreed — are completely different in each case.
That gap is not cosmetic. It is where commission disputes are born, where payment delays compound, and where otherwise good deals turn into months of WhatsApp arguments between agency principals. Any agent who moves between off-plan and resale — and most active Dubai agents do both — needs to understand the structural differences cold, not just the headline rates.
The Off-Plan Model: Developer as the Payer
When buying off-plan directly from developers, agency commissions usually range from 2% to 8%, but developers typically pay the fee. That one sentence contains the whole logic of the primary market: the developer, not the buyer, is the client on the commission side. If you are buying a brand-new property directly from a developer, the real estate agent commission is usually 0% for the buyer. In these scenarios, the developer pays the commission to the agency as a marketing fee.
The range is wide for a reason. The exact commission rate can vary depending on the developer, the project’s location, and the property’s price point. Some premium developments might offer higher commissions to incentivise agents. Developers use commission structure as a sales tool: a project moving slowly, a new launch they want to dominate the portals in the first week, or a developer trying to break into a market where they have no brand recognition will typically offer at the upper end of that range. Agents who track these rates across developers hold a real informational edge — they know which projects are worth pushing and which are quietly cutting rates mid-campaign.
What the Brokerage Agreement with the Developer Actually Is
Before an agent can legally sell any off-plan unit, the relationship with the developer needs to be documented. The commission is built into the developer’s marketing and sales structure and paid to the authorised brokerage handling the transaction. This is not an informal arrangement. The brokerage holds a signed marketing or sales authorisation from the developer, which specifies the commission percentage, any co-broking terms, and — critically — the payment schedule.
Most developers release 50% of the commission after the buyer’s first payment clears and the remaining 50% after the second or third instalment. This creates a 30-to-90-day lag between the sale and full commission receipt.
That lag is one of the defining cash-flow realities of the off-plan business. An agent who closes three units in a launch weekend is not walking out with commission on Monday. They are walking out with a promise, contingent on the buyer’s subsequent payment behaviour and the developer’s internal processing. If the buyer delays an instalment, the second tranche of commission moves with it.
The Escrow Structure — and What It Means for Your Commission
The regulated escrow account exists to protect buyers, not agents. Under Law No. 8 of 2007 concerning Guarantee Accounts of Real Estate Developments in the Emirate of Dubai, a developer must open a separate escrow account for each approved project before any unit can be sold off-plan. All buyer instalment payments flow into that escrow account, which is managed by a RERA-licensed trustee. The developer may only withdraw funds upon reaching verified construction milestones certified by a RERA-approved engineer.
Commission, by contrast, is paid from the developer’s own operations budget — it does not flow out of the buyer’s protected escrow account. Agents should be clear on this distinction: the escrow structure is a buyer protection mechanism, and your commission is separately a matter of your commercial agreement with the developer. If a developer’s cash flow is squeezed, your commission cheque can wait even when the project is moving. Always know who you are actually a creditor of.
Co-Broking Off-Plan: The Referral Model
Off-plan co-broking typically works as a referral arrangement. Agency A holds the developer authorisation. Agency B introduces the buyer. The split — commonly 50/50 of whatever the developer is paying, but negotiated widely — needs to be agreed in writing before the client is presented to the developer’s sales team. Once that client’s name and contact details are registered by either agency, the client is generally considered “owned” by the registering party for that project. The practical consequence: if Agency B’s agent brings a buyer verbally and Agency A’s team registers them in the developer’s CRM first, Agency B has very little recourse.
The fix is simple and routinely ignored: get the referral or co-broking arrangement into a signed document — specifying agency names, percentages, the project, and the client — before a single meeting is booked. A WhatsApp message saying “let’s split 50/50” is not worthless, but it will not hold up cleanly when one party has a different recollection of events six weeks later.
The Resale Model: Commission Flows From the Client, Not the Developer
Resale operates on entirely different plumbing. If you are buying a ready property from a current owner, the standard real estate agent commission in Dubai is 2% of the property sales price. All commissions are subject to 5% Value Added Tax under UAE law.
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, and 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.
In practice, this clean structure requires the seller’s agent to have a signed Form A — the listing agreement — with the seller, and the buyer’s agent to have a signed Form B with the buyer. RERA’s primary rule regarding commission is that an agent cannot claim a fee unless they have a signed contract authorising them to represent the property.
Form F, the MOU, and When Commission Becomes Due
In a resale transaction, the formal crystallisation point is Form F — the Memorandum of Understanding, also called the Unified Sales Contract — which is the standard RERA agreement signed before the DLD transfer takes place.
Form F serves as the definitive agreement between the buyer and seller, capturing every material term of the deal: the property details, the agreed price, the payment schedule, the transfer timeline, penalty clauses, and the agent’s commission. Once signed by all three parties — buyer, seller, and agent — Form F is registered with the DLD through the agent’s brokerage. This registration is what gives the document its legal weight.
Commission is typically due upon signing the Memorandum of Understanding, though some agents collect at the point of title transfer. The distinction matters enormously when a deal stalls post-MOU. Most agents consider commission earned when the buyer and seller sign the MOU. This is the standard expectation and is supported by RERA in disputes.
The Co-Broking Resale Problem: One Pot, Two Hands
The point where resale disputes most commonly ignite is not between agent and client — it is between the two agencies co-broking the deal. Here is the usual sequence: Agency A lists the property on Form A with the seller, committing the seller to a 2% fee. Agency B brings the buyer. Both agree — verbally or via a chain of messages — to “split the commission.” The buyer signs the MOU and hands over a cheque made out to Agency A’s brokerage, because that is whose details appear on the Form F. Agency A is now holding 2% of the sale price. Agency B is waiting for their half.
What happens next depends entirely on what was agreed in writing before that cheque was presented. If the split arrangement exists only in a WhatsApp exchange, Agency B is in a weak position. Not because Agency A necessarily intends to behave badly — but because there is no signed instrument specifying what percentage is owed, by what date, and to which brokerage account. Disputes arise from ambiguity, not always from bad faith.
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.
That RERA requirement exists for a reason. It keeps the transaction in the formal, auditable sphere where recourse is possible. An inter-agency split that is documented, referenced on Form F or in a signed co-broking agreement, and paid agency-to-agency is recoverable through RERA’s dispute channels. One that exists only in a manager’s memory is not.
Where the Structures Diverge Most Sharply
It helps to see the comparison laid flat.
Who pays the commission
- Off-plan: The developer pays the brokerage directly. Buyer pays zero.
- Resale: The buyer conventionally pays their agent 2% plus VAT. The seller pays their own listing agent separately, also typically 2% plus VAT.
Commission rate range
- Off-plan: The commission may vary depending on the project, developer, and brokerage agreement, with a typical range of 2% to 8%.
- Resale: On a resale or secondary-market purchase, the buyer conventionally pays 2% of the agreed sale price plus 5% VAT. Luxury properties, especially those above AED 10 million, may offer negotiated commission rates of 1% to 1.5%.
When commission is paid
- Off-plan: Staggered. Typically half on first buyer payment, half on second or third instalment, over a 30-to-90-day window.
- Resale: On MOU signing in most deals; occasionally deferred to transfer at DLD trustee office.
The regulatory paper trail
- Off-plan: Developer marketing agreement, Trakheesi registration, Oqood for buyer. For an off-plan deal, the key records include project and escrow confirmed on Mashrooi, the developer marketing contract, the account the client paid into, Oqood registration, and milestone dates.
- Resale: Form A with seller, Form B with buyer, Form F as MOU. 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.
Co-broking dispute risk
- Off-plan: Dispute typically centres on client registration — who registered the buyer with the developer’s CRM first.
- Resale: Dispute typically centres on the split agreement between agencies, and which brokerage holds the collected cheque.
The Specific Problem of Off-Plan Resale (Assignment)
There is a third category that agents encounter more often as off-plan volumes stay high: the secondary sale of an off-plan unit before handover — commonly called an assignment or novation. This is not the same as buying from a developer, and not the same as a conventional resale.
The exception is a secondary sale of an off-plan unit — an assignment or resale before handover — where the buyer may still pay the standard 2%. While developers pay the agent commission on off-plan properties, secondary resales of off-plan units require the buyer to pay 2% commission to the broker managing the resale.
An assignment deal carries characteristics of both worlds: the underlying asset is unfinished, there is no title deed yet, the buyer is effectively stepping into the original purchaser’s shoes under the developer’s SPA, and Oqood registration transfers the interim ownership interest. Agents who treat an assignment like a straightforward resale — relying only on a Form F — often discover that the process requires an NOC from the developer, specific DLD procedures for interim register transfers, and co-ordination with the escrow trustee. Missing any of those steps can delay or void the commission entirely.
Know which deal type you are actually in before you price the client’s expectations.
Why Payment Stalls — and the Patterns Behind It
Both off-plan and resale deals have characteristic failure modes when it comes to commission reaching the agent who earned it. The causes differ.
Off-plan payment stalls
The developer pays in tranches linked to buyer payment behaviour. If the buyer misses an instalment, the developer’s obligation to release the second tranche of commission moves with it. Agents have no direct claim on the buyer in this model — their agreement is with the developer. An agency that has not read its marketing agreement carefully may not even know the precise trigger points for each commission tranche.
Add to this: developers sometimes run internal verification processes — checking Trakheesi permits, confirming the agent is still RERA-licensed, validating Oqood registration — before releasing commission. If any of those checks stall, the payment stalls. Keeping your brokerage’s licensing current and your Trakheesi permits active is therefore not just a compliance exercise — it is a cash-flow prerequisite.
Resale payment stalls
The most common pattern in resale: two agencies co-brokered, buyer paid the listing agency, and the listing agency’s principal is slow — sometimes extremely slow — to cut a cheque to the co-broking agency. There is no formal timeline requirement for agency-to-agency settlement in the way that DLD governs the transfer itself. If the split agreement was not documented, the co-broking agency is essentially waiting on goodwill.
A secondary pattern: commission is collected by the listing agency but the agent who brought the deal has moved to a different brokerage before the money is distributed internally. Internal commission splits — the agent’s share of what the brokerage receives — are governed by employment or retainer agreements, not by RERA. Once an agent leaves, collecting their share of a deal that closed while they were still there becomes a civil employment matter, not a regulatory one.
If a client refuses to pay the agreed commission after a successful deal, the broker can file a complaint with RERA or take legal action to claim it, because it is a breach of contract. That route exists, but it is slow and expensive. The better answer is to not get to the dispute in the first place.
What a Clean Deal Looks Like in Each Market
There is no mystery about what a well-structured commission arrangement looks like. Every working agent in Dubai knows the theory. The gap is between theory and the moment a hot deal is moving fast and the instinct is to sort the paperwork later.
Clean off-plan deal
The developer marketing agreement specifies the commission rate and payment schedule — tranche one, tranche two, triggers for each. Before bringing a co-broking agency’s buyer to the project, a written referral or sub-agency agreement exists between the two brokerages, signed before any client name is registered. When the buyer pays the developer, the commission clock starts on paper, not in someone’s recollection.
Clean resale deal
The listing agency has a signed Form A from the seller with the commission rate stated. Before any buyer agent is introduced, both agencies sign a co-broking or fee-sharing agreement that names the property, the percentage split, and the party responsible for paying whom. The buyer signs Form B with their agent. Form F is signed by all parties with both agencies named or referenced. Commission is paid at MOU — on schedule, to the brokerage, by cheque — and the split is paid simultaneously, not “once the deal settles.”
Always ensure that the final agreed commission is recorded in your Form A or Form B contract to avoid disputes. The same logic applies to the inter-agency agreement: if it is not in writing, it is a promise, not a contract.
The VAT Dimension
All commissions are subject to 5% Value Added Tax under UAE law. Brokerage commission is a service, so the UAE’s 5% VAT applies to the commission amount, not the property price.
In a co-brokered resale deal where the buyer pays 2% of the purchase price plus VAT to the listing agency, the question of who issues the VAT invoice — and for how much — matters. Each registered brokerage invoices its own commission. If Agency A collects the full commission and then pays half to Agency B, Agency B needs its own VAT invoice for its share of the service. This is not a theoretical concern: the Federal Tax Authority’s requirements govern this, and agencies that are not structured to issue clean VAT invoices for co-brokered income create problems for themselves and for the agencies they work with.
Always clarify, before the deal closes, which agency is issuing which invoice and for exactly what amount. Add this to the pre-deal checklist alongside the commission percentage.
The Principle That Removes the Friction
The differences between off-plan and resale commission structures are real and they matter — knowing them is a baseline professional competence in this market. But underneath the structural differences, the mechanics of every dispute trace back to the same gap: the split was discussed but not signed, the payment was expected but not scheduled, and the trigger point for commission release was assumed but not stated in writing.
The resale agent who agrees a 50/50 co-broking split verbally on a Tuesday, closes the deal on a Thursday, and waits for the listing agency to “sort it out” is not operating in bad faith — but they are operating at the mercy of another agency’s internal priorities. The off-plan agent who hands a buyer’s contact to a developer’s sales team without a referral agreement in place is trusting a CRM registration system they do not control.
The standard that cuts through all of this is the same in both markets, even though the paperwork looks different. Agree the split in writing before the client pays anyone. Specify the amount, the trigger, and who pays whom. Ensure that when money moves from client to agency, the inter-agency portion moves at the same time — not as a follow-up, not “once things settle,” but simultaneously and in documented form.
That principle does not require new technology or a change in Dubai’s regulatory framework. RERA’s forms already support it. The infrastructure exists. What it requires is the discipline to treat the split agreement as seriously as the listing agreement — which is to say, as a non-negotiable precondition of the deal, not an afterthought to it.
An agent who operates that way in both markets will close more deals, wait less for money, and spend less time in arguments that were entirely avoidable from day one.
