Property buying process in Dubai
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Many of our clients are familiar with purchasing
property in their own home market however, the process of finding and
securing a Dubai property can be quite different. The following
paragraphs will give you an insight into the local market but you
should seek guidance from one of our property experts who will guide
you through every step.
Finding a Suitable Property
With so many developments available on the market the biggest
challenge to face most of our clients is finding the most suitable to
their needs. To do this our staff will take time to understand your
requirements and advise you accordingly. Property deals tend to get
closed quite quickly, with this in mind it is highly advisable to
arrange your finances prior to commencing your search, this often
helps to avoid disappointment.
Construction Period and Developers
Most developments are due for completion at least 18 months after
launch. All developers and sub developers are required by law to use a
system of Escrow accounts that ensures any moneys received for
off-plan unit sales are allocated back to the developer as a project
proceeds based on official certification of the stage reached. This
system was put in place to guarantee funds are used for the correct
purpose and has resulted in increased transparency and confidence in
the Dubai property market.
Payment Schedules
Units are paid for by a series of payments spread over the
construction period. Payment schedules tend to be quite evenly spread
requiring the majority of the purchase price to be paid before
completion. All developments vary but typically the purchaser would be
required to put down 10/ 15% booking deposit followed by 10/ 15% every
3 months or even up to 20% installments in some cases.
Premium
A property is sold by the developer at the 'Original Price' to the
purchaser. The capital appreciation on the property is referred to as
the 'Premium.' When a purchaser buys from another individual it is
referred to as a 'Secondary Sale.'
Valuations
If you are raising finances for your Dubai property from one of the
locally based Banks you will often be required to obtain a valuation
if you are buying a 'secondary sale. This is normally quite a
straightforward homebuyers valuation and is aimed at confirming the
market price and any premium on the property.
Re-Sale Terms
The terms and conditions applied for re-sale have in the past differed
from developer to developer. The formation of the Real Estate
Regulatory Authority (RERA) has come about with the objective of
standardizing re-sale processes. RERA has begun to regulate these
procedures, but it should be noted that the market is still in a
period of transition and that there remains a way to go before all
developers adopt standard industry practices. Resale guidelines as
they stand at the moment are as follows:
Properties need to be pre registered with the Lands Department by the
owner before a re-sale can take place
The Lands Department will take over all property transfers
Owners will need to pay a transfer fee and a registration fee to the
Lands Department not the developer
Property transfers will be recorded with a government entity (Lands
Department) and not the developer
Vendors will need to obtain a letter of no objection from their
property developer
Understanding Dubai re-sale processes will not be easily accomplished
if you are not familiar with the market. The Dubai Realest staff is
well versed in RERA laws and will immediately be aware of any changes
or developments that occur within the market, putting us in an ideal
situation to offer advice and answer any questions that you may have.
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