Arab was not considered as an ideal place by the investors to invest or buy a property because of their strict rules and regulations. However, the Middle East and Dubai became an enormously common area for real estate investment when in 2002 the Freehold Decree was formed as a formal legislature enabling foreign nationals to purchase, sell, or rent land.
Now, with the high rent prices and the continuous growth of the thriving real estate industry, and the development of new residential projects like District One Villas Dubai or Elite City Downtown, the purchasing of properties is becoming more and more affordable and desirable for expats in Dubai.
Compared to many other countries in the world, the buying process in Dubai is fairly simple; that can both be of advantage and a challenge for buyers. Below is a guide about purchasing properties in Dubai.
1) Understand the Dubai buying process
In Dubai, the land can be bought either from a developer “off-plan” or from a private seller “resale”. Expats must submit their passports and a reservation form, outlining the terms and conditions of the contract, before buying from a developer. For drafting a Sales and Purchase Agreement (SPA) which ties the two parties to the contract, a reservation fee between 5 and 15 per cent is charged.
For properties currently under development, ensure that the contract contains a delivery deadline and outline the payments to be compensated when the time is extended. The terms of the arrangement are set out in a Memorandum of Understanding (MoU) for the purchase of the resale property from a private seller, after which a 10% deposit of the property price is generally set by the buyer to confirm the purchasing of the property before authorized funding has been obtained.
2) Determine whether you would like to buy a property
Deciding whether to purchase or buy land for investment, will have a considerable effect on the type of property that you are planning to buy. If the main purpose of buying a property is for investment, most expats will rent those properties out. Then, It is important to analyze the real estate market and the types of properties with the highest rates of rent. Investing in one or two-bedroom apartments would be a smarter investment option than buying a villa because, while the latter might sound more luxurious, the former have a better return than the latter.
3) Due diligence is necessary
Regardless of whether to purchase off-plan properties or resale properties, customers will ask several questions to determine whether or not the developer or the property agent is credible or not. In most situations when you purchase the project from a developer, it is often profoundly necessary for prospective customers to view display houses to get an understanding of what they can expect.
4) Survey the property
In order to buy a private secondary market property from an existing private seller, it would be best to employ a licensed, skilled inspection company’s services.
The owner is responsible for maintaining a property; the surveyors may examine the property by carefully examining the premises to alert potential buyers to the risk of future high maintenance costs, particularly for properties such as villas that may be unoccupied for a few months at a time. When you own the house, it will be your duty to manage it so that, as a buyer, you will make sure that you have no big issues.
5) Seek advice from the expert
It is widely advised, while it is not required by regulations, that buyers obtain licensed legal representation to assist them in the buying process. It is a valuable recommendation, though, and it will highlight possible future risks.
Enlist the services of a licensed Dubai State Department Transport firm. All of them have in-house property attorneys and Escrow facilities to ensure that both the buyer and seller have a straightforward and secure procedure to their fullest.
6) Check for land liabilities
Make sure you get a certificate free of all obligations and debts when you buy a house. Getting a N.O.C. (no objection certificate) from the developer’s office is the responsibility of the person who is selling the property.
Developers will typically conduct several checks of the house, to ensure the debt is free and to provide the NOC with a confirmation that the property is able to be passed to the Dubai Land Department.
Buying a property at places like JBR, Port De La Mer Dubai, Burj Al Arab, etc, can cost people their fortunes, so it is quite essential that you take care of the tips above to avoid mishaps in the future.