Dubai and the rest of UAE has seen a lot of progressive developments in the recent decades which certainly make it a great place to live for single people as well as larger families. Dubai offers plenty of great neighborhoods that are not only safe but also comes with excellent retail, education, hospitality, medical facilities, and entertainment options. This has naturally encouraged a lot of people from different parts of the world to come together and live in Dubai and the other emirates.
If you are planning to buy a property in Dubai, you must know the various rules and regulations that govern the real estate market here. This will help you to make a wise decision while you are buying properties and prevent you from making mistakes that you might regret later on.
Here are five tips that you should remember while buying properties in Dubai.
Understanding the property purchasing process applicable in Dubai
In Dubai, you can buy a property either through ‘off-plan’ method from a real estate developer or go for ‘resale’ from some private seller. While opting for an off-plan property, all expats are required to put forward their passports as well as a reservation form which clearly outlines all the various terms and conditions associated with the deal. There is also a reservation fee involved that may range between 5% to 15% of the total cost which is paid to systematically draw up Sales and Purchase Agreement (SPA), which commits both the parties to the property buying deal. If you are looking to buy properties that are under construction, make sure that such an agreement comprises a completion date as well as outlines any kind of compensation that is to be paid in case there are delays in completion by stipulated time frame. If you want to purchase a resale property from some private seller, it will involve Memorandum of Understanding or MoU which outlines all the various terms and conditions associated with the deal. In these cases, a buyer typically pays a 10% deposit of property price in order to confirm purchase of property, thus pending approved financing. Transfer of deeds usually takes place after financing has been obtained.
Think of why you are planning to buy the property
It is very important that you decide in advance as in why you are looking to buy a particular property. Are you looking to buy the property simply for investment purposes? Or you want to find a place that you can occupy yourself and/or with your family? Whatever the nature of your purpose might be, it can be a major impact on the nature and type of the property purchased. So if you want to purchase a property for investment purposes, the trend with most expats is to rent out a property like that. You should then carefully study the property market as well as look through the properties that offer the highest possible rental yield. A good investment decision would be to go for a small one or two BHK apartment instead of a large villa as such homes have better profit margins than larger houses even though a villa might seem like a better and more luxurious option.
Learn everything about due diligence
While buying resale or off-plan properties, you should definitely ask a lot of questions so as to determine reputation of the real estate agent or the developer. In case you are buying a property from a developer, it is of paramount importance that you should check the reputation of the developer, particularly in terms of quality and also whether the developer can deliver a project on time. For most cases where people buy a property from a developer, a particular unit is not ready and still under construction, hence it becomes very important for the potential buyers to explore homes for getting an idea as to what they might expect. On the other hand, if you are looking to buy a property through some real estate agent, make sure whether that agent is registered with Dubai Land Department or not.
Survey the property properly
In case you are thinking of purchasing an existing property directly from some private seller in Dubai from secondary market, you should hire the expertise of a professional surveying company who is properly registered to offer such services. Maintaining a property in the right way is the sole responsibility of current owner. The surveyors can thoroughly assess the whole property that you are looking to buy. They can check the premises critically and can alert you about potential risks such as if you might need to carry out any major repair work or need to manage high-maintenance costs. This is especially true for large villas that might remain unoccupied in many cases for several months. After you have taken the possession of a property, the maintenance of the house solely rests on your hands. Therefore as a buyer of the property, you should make sure that you do not inherit a property with any major issues down the line.
Check for debts or liabilities associated with a property
When you are purchasing a property, make sure that the house is totally free from all debts or liabilities. You will be getting a document with a title that clearly confirms that to you. It is the task of the seller to present you with a N.O.C. or no objection certificate right from the office of the developer. The developers are going to perform a number of checks on a given property in order to make sure that the property is completely free from any kind of debt or liability. Once all the checks have been performed, the developer will then issue a N.O.C. which confirms that the particular property complies with all the regulations and is ready for being transferred at Dubai Land Department. It is extremely important that you get the N.O.C. or no objection certificate while you are buying the property as without it you may need to face a lot of legal hassles in the future.