Top tips for buying property in Dubai
These days, purchasing real estate in Dubai is in vogue. Not only is it a promising business investment but also a comfortable region for living. More than 43,000 property transactions were recorded in the first half of 2022, with the total value exceeding $31.3 billion. Statistics show that Dubai’s real estate market is booming, and the high-cost, potentially profitable options dominate here.
The process of purchasing real estate in Dubai is relatively straightforward, and foreign investors just need a valid ID and some supporting documents to be eligible for the purchase. But the crucial point is that ex-pats and non-resident investors can purchase freehold property only. It slightly limits the range of real estate but still leaves room for finding a profitable investment option.
Select property type
Let’s review the three categories of property in Dubai:
- The property is registered in an owner’s name. An owner may freely dispose of the freehold property. It can be sold or passed down as an inheritance. Freehold property must be purchased from a government-licensed developer or realtor.
- An investor holds the right to own the property. This differs from the previous property type, where you own property and the land. The fees are distributed between residents/owners.
- This type grants rights to use the property from 10 to 99 years. An owner is prohibited from changing or destroying the property. It’s a form of a long-term lease.
Once you decide on the preferable option, you need to contact a reliable real estate agent to help you with the legal side of the purchase. Vendors can probably address every one of your concerns related to investing in real estate in Dubai. If you intend to buy property in Dubai, you can rely entirely on the Metropolitan Real Estate agency with extensive experience with any property type.
Signing the purchase and sale agreement
Once a type of property is chosen, and all nuances with selecting a suitable real estate option are handled, it’s time to sign a contract between a seller and a buyer. It is also called a Memorandum of Understanding. Let’s review some aspects that a sale contract should have indicated:
- Financing terms. These are terms under which the price of the property is paid off. The mortgage conditions are indicated if a buyer cannot afford to pay the total price. A buyer should ensure the loan fits into current debt obligations.
- Seller assist. Closing costs are paid by either a seller, buyer, or both. These terms should be specified in the contract.
- Specific closing costs. Besides, the real estate purchase is accompanied by an array of expenses, including escrow, notary, title search, and others. Depending on the property, they may be paid by the seller or buyer.
- Home inspection. This process involves requesting an expert to examine the property for structural damages. Any issues found are written down into the contract since they directly impact the end property price.
- Fixtures and appliances. This point specifies what items on the property are included or excluded from the sale.
- Closing date. Typically, the contract sides are given 30-60 days to close the deal. It includes finding a new home for a seller and paying off the total price for a buyer.
It may be difficult to correctly write down every contract element, especially for a first-time buyer. So, even if you are not legally obligated to request assistance from a real estate agent, it’s always the right call to take advantage of this opportunity.
Required package of documents
Here is the list of documents that a buyer needs to be eligible for a home purchase in Dubai:
- A valid ID or driving license.
- Proof of residency status (for residents).
- Proof of your existing residential address (for residents).
- Last three months’ payslips.
- Bank statement to prove that a buyer can afford the purchase.
An exciting aspect is applying for the No Objection Certificate (NOC). A buyer applies and pays for the NOC to obtain legal proof from a developer that there are no outstanding service charges on the property. The fee for NOC starts from 500 AED, or about $136. It takes up to three business days to have the NOC certificate issued.
Real estate registration
Once a contract is prepared, and the NOC certificate is obtained, parties proceed with the Dubai Land Department visit. The documents required for the transaction to be approved are:
- A cheque for the property price is payable to the seller.
- The original identification documents of the buyer and seller.
- The original NOC.
- Signed Contract F (MOU).
The fees are 4% of the property price + an admin fee of AED 580 ($168) for apartments and offices. Once the procedure is finished, the ownership rights are legally transferred to the new owner.
You’re a Dubai homeowner!
After the purchase, you can rent it out, sell it, or even gift it. With freehold property, it’s only your decision what to do with your new asset. Purchasing property in Dubai is not that difficult, especially with the proper assistance.
