10 Steps to Take when buying property in Dubai
Why rent when buying has never been easier?
LOCATION, LOCATION, LOCATION
Take a drive around your favourite areas of the city and decide which developments you can picture yourself living in. Lenders in Dubai pre-select which development they will finance so before you can talk mortgages it is a good idea to shortlist your most- liked areas.
LOOK FOR QUALITY DEVELOPMENTS
Not all developers were created equal. Look for a strong, well capitalised developer such as DAMAC Properties, which has a proven track record for delivering some of the most sought-after properties in the UAE. Choosing a reputable developer can help to ensure you are buying a high-quality apartment in a well-maintained building. It's your insurance policy for your investment in the future.
MAINTENANCE COSTS TRANSPARENCY
Dubai's real estate market is mostly comprised of apartments within high and low rise developments. While these types of developments offer apartment owners some spectacular views and a range of facilities including gyms, spas and pools they can also present some challenges in terms of how common areas are managed. Make sure to ask about the service charges or maintenance fees that as an owner you will be liable to pay.
FINANCING YOUR PURCHASE
There are different ways of financing property purchases in Dubai, such as off-plan stage payments: Most developers offer off-plan stage payment financing options. The buyer will pay an initial deposit and then the balance in structured payments (which are held in Escrow accounts) through to completion. Mortgage finance: Competition in the banking sector means banks are now offering very attractive mortgage rates below 5%. At DAMAC Properties, we even offer excellent staged payment terms on our completed portfolio.
Nobody likes paperwork but it is essential and having all the details clearly laid out in black and white will put your mind at ease. To buy off-plan a developer will only ask for a passport and a booking deposit. While documentation requirements may differ between lenders, generally you will need six to 12 months of bank statements, a copy of your passport with visa page, utility bill or tenancy agreement and a salary certificate from your employer, or minimum of two years audited accounts if self-employed.
KNOW YOUR LEGAL POSITION
The Dubai government has greatly simplified the process for buying and selling. It is well established that the Dubai Land Department only permits registration of property in the names of individuals, companies registered onshore in UAE or offshore within the Jebel Ali Offshore jurisdiction. This clearly
affects the foreign corporate purchaser but not individual purchasers. Do your research to be clear on the registration process.
MAKE A VERBAL OFFER
Once you are comfortable with the amount you wish to spend and have organised your finances, you are now ready to make an offer. It is usually advisable to present the highest offer you can afford to ensure you don't lose out to another buyer.
PAY THE DEPOSIT
Typically the prospective buyer and seller enter an MOU, wherein the buyer commits to purchasing the property and the buyer commits to selling the property. The buyer pays an initial booking deposit. However, if the buyer withdraws from the transaction, the buyer will have to forfeit his or her booking deposit. Alternatively, if the seller reneges on the sale the seller refunds the booking deposit. Beware that buying from the secondary market can carry more risk, as the transaction is between the buyer and an individual seller, and if something goes wrong there can be little recourse.
PAY THE BALANCE
If you have purchased a property off-plan from a developer, you will be required to make stage payments, which are generally linked to key construction milestones. One of the major benefits from the off-plan financing model is that it is a bit like an interest free loan for the buyer. Often developers won't ask for the final payment until months after handover, which can ease the pressure on your finances when you are moving into your home. If you have taken out a mortgage to fund your property purchase, you will be paying incremental monthly payments for the duration of the loan.
MOVE IN TO YOUR NEW HOME
On the handover of the property, the new owner will have to register the property at the Dubai Lands Department to obtain a Title Deed. The property purchaser is responsible for paying the fees to the government. The fee for the Title Deed normally amounts to about 1.5-2% of the property value. Finally, you are ready to enjoy the fun part –decorating your new home.