Real estate brokerage is a vital component of the real estate market, playing a key role in facilitating transactions between buyers and sellers. This article aims to explore the concept of real estate brokerage, the role the Authority plays in regulating the market, and the benefits individuals can reap from engaging with real estate brokers. We will also discuss the requirements for obtaining a brokerage license and the associated fees. Through these points, we seek to clarify the importance of real estate brokerage in supporting economic growth and enhancing confidence in the real estate market.
المحتويات
What is Meant by Real Estate Brokerage?
Real estate brokerage in the Kingdom of Saudi Arabia involves facilitating the completion of real estate transactions between parties, in exchange for a commission. This brokerage also includes electronic brokerage via modern technologies such as websites and social media platforms. Real estate services include real estate-related activities such as marketing, management, sales, leasing, and advertising.
These activities are carried out by a real estate broker, who can be an individual or an entity licensed by the General Authority for Real Estate, which concludes brokerage contracts with the parties involved.
To ensure the regulation of brokerage and real estate services, the General Authority for Real Estate is responsible for the following:
- Preparing mandatory and guiding contract forms.
- Developing programs to stimulate the practice of brokerage and services.
- Defining standards and requirements for real estate marketing.
- Establishing controls for the practice of brokerage.
- Establishing procedures for monitoring violations and receiving complaints.
Read also:?Real Estate Investment in Saudi Arabia: Why Hiring a Lawyer
The Authority’s Board of Directors is also responsible for:
- Approving regulations for activities and services.
- Determining fees for licenses and their renewal.
- Determining the real estate services that brokers can provide and their conditions.
- Establish procedures to control violations and receive complaints.
Real Estate Brokerage System Regulations
The Executive Regulations of the Real Estate Brokerage System in the Kingdom of Saudi Arabia were issued pursuant to Royal Decree No. (M/130) issued on 11/30/1443 AH. These regulations aim to regulate the executive provisions of the system, as stated in Article (Twenty-Three) of the same system, with the aim of regulating the real estate brokerage profession and ensuring the effective implementation of approved procedures and systems.
Benefits of Using a Real Estate Broker
- Expertise and Knowledge: A real estate broker has extensive experience and deep knowledge of the real estate market, which allows them to help you find properties that best suit your needs and budget.
- Negotiation Skills: The broker possesses strong negotiation skills, enabling them to assist you in securing the best possible price for the property you wish to buy or sell.
- Time and Effort Savings: The real estate broker handles all the routine tasks related to the transaction, saving you time and effort.
- Legal Protection: The broker ensures that the real estate transaction is carried out legally and safeguards the rights of all parties involved in the process.
Licensing Requirements for Real Estate Brokerage Activity in Saudi Arabia
- Minimum Age Requirement: The individual must be at least 18 years old.
- Legal Capacity: The applicant must be legally competent, and must not have been convicted of a crime involving dishonor or integrity, unless their legal status has been restored.
- Completion of Training Program: The applicant must successfully complete the training program required for each specific real estate activity.
- Payment of Licensing Fees: The applicant must pay the required fees for obtaining the license.
Check out: Conditions to Buy Property in Saudi Arabia for Foreigners
Real Estate Brokerage Fee
1. Commission Determination: The real estate broker’s commission is set at 2.5% of the total transaction value in the case of a sale, or at the value of the first year’s rent only if the transaction is a lease, unless a different percentage is agreed upon in writing between the parties to the brokerage contract.
2. Payment Responsibility: The party who concluded the brokerage contract with the real estate broker is responsible for paying the commission due, unless otherwise agreed upon in the contract.
3. Brokerage with Multiple Parties: If a real estate broker concludes brokerage contracts with more than one party in the same real estate transaction, the total commissions they receive may not exceed the percentage specified in the first paragraph (2.5%). In this case, the regulations specify the mechanism for distributing the responsibility for paying the commission between the parties, unless the brokerage contract explicitly provides for different arrangements.
Finally, real estate brokerage, whether traditional or online, is an essential part of the Kingdom’s real estate market, helping individuals and companies complete real estate transactions efficiently and quickly. Operating in this field requires compliance with a set of legal requirements and regulations that ensure the sector’s organization and the protection of the rights of various parties.
The Etqan Al Mutamayza Law Firm can provide the necessary support. You can contact their team
through the following mobile numbers: 056113776, 0541110440, 504315333
Alternatively, you can visit our branches:
Learn about: Best Law Firms In Saudi Arabia: Etqan Lawfirm – 0553320060
- Jeddah: Al-Aziziyah District–Mohammed bin Abdulaziz Street (Tahlia)
- Riyadh: King Abdulaziz Street – In front of Kingdom
- Dammam: Al-Ashri’a Street, Al-Badeea, Dammam 32415.
FAQ
What is real estate brokerage?
Real estate brokerage is the process of facilitating real estate transactions between parties in exchange for a commission. It also includes electronic brokerage using modern technologies such as websites and social media platforms.
What is the difference between real estate brokerage and online real estate brokerage?
Traditional real estate brokerage relies on direct interaction between the real estate broker and the parties via in-person meetings and phone calls, while virtual real estate brokerage is conducted online using digital platforms, providing greater flexibility and expanding client reach globally. Online brokerage is also less expensive and more efficient in terms of speed and advertising.
What is the legal framework for starting a real estate brokerage business plan?
To start a real estate brokerage business in Saudi Arabia, you must obtain a license from the General Authority for Real Estate after completing an approved training program. Applicants must be at least 18 years old and legally competent. Legal contracts must be prepared that include the parties’ obligations and commissions, while adhering to consumer protection and real estate advertising laws. The required fees must be paid and the license must be renewed regularly.