- Thanks to its strong economic growth, Dubai’s property market is more appealing than ever to investors and buyers
- The real estate agents from Engel & Völkers advise and mediate with their many years of great expertise in the luxury real estate market
Dubai, United Arab Emirates: Buying a property is often one of the most important decisions of one’s life. Therefore it requires good consideration as well as an extensive service that is perfectly tailored to the buyers needs. The following tip and advice give potential buyers valuable information and support throughout the process of buying real estate.
- Do your research and define your criteria
Make sure to know what type or property you are looking for and the specific criteria. Whether we’re talking about an apartment, townhouse or standalone villa, having a clear idea in your head of realistic property prices and the factors that like location, view, amenities, community are essential.
- Find the right agent
Working with the right agent is crucial when searching for a new property. You need someone who understands exactly what you want and who will guide you through the process. That person should be fully committed to assisting you in achieving your goal. It goes without saying that they should be fully licensed and have a proven track record for success.
- Leasehold vs Freehold – things to consider
The difference in rules for freehold and leasehold purchases are significant. To avoid overcomplication and potential disappointment make sure you decide which option is best suited to your needs (freehold is often the most appealing choice, given the absolute ownership it grants). It is of course critical to ensure your agent is aware of your preference.
- Legal matters
You might be surprised to learn that being a UAE resident is not a pre-requisite for purchasing a property in a Dubai freehold area. As defined by the Government of Dubai, anyone – regardless of their nationality and location -, can buy real estate in a freehold location.
- Timeline and schedules
In Dubai an average property transaction takes around 30 days to complete from the day the Agreement for Sale is signed. That said, different variables can affect these timelines, from the time of year to the type of buyer, for example, a full cash-to-cash transaction will go through faster than a mortgage-buyer to mortgage-seller one. With that in mind, give yourself a schedule that affords a little wiggle room.
- Protocol and procedures – a step-by-step guide
- Once the buyer and seller agree terms, they’ll need to sign an Agreement for Sale and/or Memorandum of Understanding (MOU). At this point a deposit (usually 10 per cent), is also required as proof of commitment.
- The seller must then settle any outstanding fees to the developer (such as service charges) and apply for a No Objection Certificate (NOC) from the developer, granting the right to sell the property against a one-time fee.
- If the buyer is purchasing with a mortgage, then the lender bank will be involved in this process. If the seller has a mortgage on the property, the buyer is required to settle the seller’s mortgage in full prior to the NOC application.
- Once the NOC has been issued, ownership can officially be transferred. This takes place at the Dubai Land Department (DLD) offices, with both parties in attendance. The purchase payment must be made with a manager’s cheque made payable to the seller on the transfer date. Following completion of these formalities a new title deed will be issued in the name of the buyer.
- The importance of doing a thorough document check
In order to stick to your timeline, make sure to have the right documents at hand. The following documents are essential for a smooth transaction:
- Buyer and seller IDs
- Property Title Deed
- NOC from developer
- Seller service charge clearance letter
- Bank offer letter to buyer (in the case of a mortgage buyer)
- Proof of mortgage settlement
- Final bills: DEWA, A/C etc
- Be aware of all fees and costs
Make sure to include factoring fees and costs into your overall budget. Here are some important things to consider:
- The fluctuations in cost for a NOC are significant and can vary from AED 500 to AED 5,000 (plus VAT). This is usually paid by the seller to the developer. It’s worth noting that certain developers will also ask for an additional refundable deposit, which is returned when the buyer presents the new title deeds at the developer’s office.
- The average commission charged by a Dubai-based real estate agent is 2 per cent of the purchase price, plus VAT.
- Transfer fees are calculated at 4 per cent of the purchase price, with an additional payment of AED 580 required for admin fees.
- Trustee fees come in at around AED 4,000 plus VAT for ready properties and AED 5,000 plus VAT for off-plan properties. Payments should be settled at the Dubai Land Department Trustee Office.
- If mortgage registration fees are required these are calculated at 0.25 per cent of the registered loan amount and need to be paid at the Dubai Land Department.
- Developers will ask for service charges to be settled in advance, so payment of this pro-rata share needs to be taken into account by buyers.
- Enjoy the success that comes with completion
Once all transactions have been completed, payments have been made and all parties are in agreement, the next step is completion. After what is likely to have been a demanding time, completion day is the much anticipated milestone when the property finally becomes yours. It’s time to pick up the keys (or key cards) and enjoy this monumental occasion.
About Engel & Völkers:
Engel & Völkers is one of the world’s leading service companies specialised in the brokerage of premium residential property, commercial real estate, yachts and aircrafts. For over 40 years now, the wishes and needs of private and institutional clients have had top priority, giving rise to the ongoing development of a range of services relating to all aspects of real estate. Sales and leaseholds, as well as consultancy for various investment opportunities in the real estate segment are among the core competencies of more than 14,000 people operating under the Engel & Völkers brand. The company is currently operating in over 30 countries on five continents. Intensive training schemes in its in-house real estate Academy and the high level of quality assurance governing its systematically structured service provision are key factors that account for the company’s success. Engel & Völkers develops digital tools and IT products on an ongoing basis, in order to keep its service as efficient as possible. In doing so, the company is setting new standards in digital solutions for property brokerage.