Agents now hired on commission-only basis
Real estate agencies in the UAE are increasingly recruiting estate agents on a commission basis instead of offering them monthly salaries, according to brokers.
"Usually there are two broad scenarios in which real estate agents are paid a remuneration, either a generous commission of up to 50 per cent without a minimum salary, or between 25 and 35 per cent of commission earned and a fixed salary," said Walter Hart, Managing Director of The Agency, a property consultancy firm.
"The second aspect where salaries are paid with a smaller percentage of commission is often offered by major developers' to their sales teams.
"However, increasingly real estate agencies are paying a commission and not salaries," he added.
Jamal Al Habtoor Real Estate, another real estate agency, is looking to recruit around 50 real estate agents by the end of 2009 but on a "commission" basis.
"We have already recruited around eight sales agents so far in the past three months and will be looking to recruit a further 15 agents in the next two to three months," said Alaa Nagawa, Business Development Director for Jamal Al Habtoor Real Estate.
In:Style Real Estate also has been recruiting agents in the market purely on a commission basis.
"We are having a large recruitment drive for 2009. We will be looking to recruit only individuals with market experience and will be paying them a nominal salary to cover expenses and a high commission rate," said Claire Collier, Manager, In:Style Real Estate.
"We are actively looking at ways to reduce our outflows even while expanding our agent network.
"We are casting the net as wide as possible in the market as this seems to be the best and most economic way to do this," said Collier.
According to industry experts, property prices and volume of transactions in the UAE real estate market has fallen over the past few months. This in turn has affected the real estate agencies in general, and sales agents in particular.
Asked if there had been any cancellation of broker licences, Real Estate Regulatory Agency's Head of Brokers Registration section Mubarak Mohammad Al Jafla said there have been no cancellations and the authority has not stipulated any rules for limiting commission payable to an agent.
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