The left-sided midfielder is currently starring for Madrid's second team Castilla.
Real have yet to tie him to a professional deal and leaving the way open for a possible Arsenal move.
His agent Gines Carvajal has confirmed interest in his client, but insists they are set to hold talks with Real's hierarchy.
"Some clubs are looking at Sarabia and Real knows this," Carvajal confirmed.
"The kid wants to triumph in Real and I will have a meeting with the club's directors at the end of the season."
It is understood Arsenal's top scout in Iberia, Francis Cagigao, has recommended a move for Sarabia to his North London bosses.