Understanding the role of buyer’s real estate agents in Dubai is crucial to your success in the property industry in the emirate or anywhere else in the world. There is a lot of turnover within the Dubai real estate industry and many potential agents may not have accurate information about what buyers are actually looking for. It is imperative that all brokers representing buyers understand their role to become successful real estate agents in Dubai.
WHY DO PEOPLE USE AN AGENT ANYWAY?
The answer to this question is not as simple as saying it is the norm and that if you want the property you have to pay. Most people buy properties in Dubai only a few times in their life. These are expensive transactions and can be emotional for some. Taking out a 25-year loan to purchase a property overseas is a big decision to take. Buying the right home for your family requires a lot of planning beforehand, and can be very personal. While the decision in itself may be emotional, everyone also always wants to get the best price.
Because most people only do this once or twice and because it is an expensive purchase, people use buyer’s real estate agents to ensure their best interests are represented. There is often a conflict of interest in the real estate industry in the UAE as an agent often represents both the seller and the buyer. This means, technically, the real estate agents in Dubai need to work in the best interest of the seller and buyer. This is often difficult to do.
For this article, we are leaving the seller’s agent angle out of the equation and are looking at the role of the buyer’s agent in the real estate industry in Dubai. Buyers contact agents for much-needed advice about buying properties in Dubai. They will obviously do their first level of research, find a property in Dubai using Bayut.com and get in touch with an agent. Most likely, this is not the property they will buy – rather, it is the first step in the process. Agents may either show only that property or realize, they have a customer and need to work to find that investor their dream property.
WHAT DO BUYER’S REAL ESTATE AGENTS IN DUBAI NEED TO DO?
What the buyer is looking for (and the basis for a property agent receiving a commission) is outlined below.
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- Explaining the entire mortgage and purchase process to the client including ALL hidden fees involved in the investment process in advance
- Notifying buyers immediately when real estate within their desired criteria comes on the market
- Staying abreast of all new properties entering the market and maintaining professional relationships
- Handling all logistics of viewings on behalf of the client
- Compiling current statistics on property investments
- Assisting clients to analyze the condition of properties they are interested in
- Providing accurate information regarding the pros and cons of each piece of property
- Recommending lenders, inspectors, contractors, etc.
- Compiling a comparative market analysis before submitting offers
- Helping buyers to handle any issues that may arise due to a home inspection
- Negotiating on behalf of the buyer for the best sale price possible
- Filling out paperwork and including all contingencies of the sale
BUYER’S REAL ESTATE AGENTS IN DUBAI AND THEIR FIDUCIARY DUTY
While the seller’s property agent in Dubai has a fiduciary duty to act in the best interest of the seller, if you are acting as a buyer’s property agent, you have a fiduciary duty to act in the best interest of the buyer. This means you may initially make nominally less commission but if you take your role seriously, and act on behalf of your buyer you will reap the reward through referrals.
So what is this word fiduciary anyway? It means you have a legal or ethical relationship of trust; so legally and ethically you must act in the best interest of your client. Holding back information, not working to uncover any potential problems or colluding with other agents to increase commission are all violations of your fiduciary duty to your client.
Here is an example of what fiduciary duty means. You have an apartment in Princess Tower, say unit 2020, listed at AED 1,200,000. You have a client interested in an apartment in Princess Tower and they have said they are looking for the best deal for a “20” unit. You happen to know that unit 1920 (one floor down) is on the market in a distress deal for AED 975,000. If you sell your apartment, you gross AED 24,000. If you sell the distressed unit, you gross AED 9,750. Acting in the fiduciary duty would dictate you notify the client of the apartment listed at AED 975,000. While it does mean a lower commission it is doing what they have instructed, to find the best deal on a “20” unit. They may still choose the 2020 unit, but if you withhold the information, just to get a higher commission, you are in violation of your fiduciary duty. If they were to find out about this unit, they would not do business with you as you had broken your trust. Should they find out about this unit after purchasing from you, they would never refer you.
Bayut Academy holds a variety of workshops to help real estate agents across the UAE hone their selling, communication, negotiating and soft skills. Register online to join us for an interactive session at our office in Dubai Design District!