Your comprehensive guide to buying your dream property in Dubai for locals and foreigners
Who does not dream of living in Dubai, the land of dreams? It is all there, the massive shopping malls, the magical beaches, the luxurious restaurants, the high-end shops. This, in addition to the many outdoor activities that were made possible like skiing, has made Dubai a dream destination for many.
If you are an expat, don’t worry, this article will be helpful for you as well. Thanks to the legislation passed by the UAE government in 2002, foreigners can now own freehold as well as leasehold properties in certain areas within Dubai. Off course this legislation was a win-win for Emirates; it helped boost the sale of properties. In fact, this law has placed Emirates’ real estate market firmly on the global property market scene; right now, more than 70% of Emirates’ population is made up of foreigners.
Purchasing a property, no matter where in the world, is a very big financial commitment. This guide will help put you on the right track to ensure that your big investment in Dubai goes smoothly and is safeguarded. From putting an offer down to getting the keys to your house, we will cover it all.
This is the year 2017; the good news is, the process of buying a property in Dubai has become really easy and straightforward. Here is our comprehensive list of all the steps you need to go through.
The steps of purchasing a property:
1) Know your options
The first option is to buy an ‘off-plan”, where you choose to buy a property that is not yet built but has been designed on paper. The obvious downside of this method is that it takes a long time. However, it is easy because the process starts with only a simple online registration to be filled and submitted to the developer. When you successfully complete this step, you will be informed of a date to bring all the needed documents to the developer’s sales center and book your unit by paying a deposit of 10%. That is all. All you have to do now is wait for 2 to 3 years to receive your property. If you decided to go with the ‘off-plan’ option, you need to check the developer’s credentials before paying anything. You have to examine things like other properties done by the developer, finishes, and schedules.
The other option is to purchase a pre-constructed property on the secondary market. Obviously, this is a better option for those who want a property right away. However, there are some factors that you need to consider such as your financial status as well as the seller’s. This guide will be all about the steps that will help you buy a pre-constructed property on the secondary market.
2) What are you interested in?
Now you need to decide on what exactly is it that you want to buy. Do you want a Villa? Do you want a townhouse? Do you an want apartment? Or are you looking for a commercial space? What else are you looking for? Are you looking for particular dimensions? Do you need to be close to public transportation? Sit and evaluate.
3) Start looking
Where can you start your property search? You have different options; Try online searching (there are plenty of websites that list available properties in Dubai), attend property fairs, or hire a real estate agent (this option is very convenient if you are lost and feel like you need someone to talk to. A real estate agent can definitely make the process much simpler for you. If you choose to go with this option, you have to make sure that your agent is registered with the ‘Real Estate Regulatory Agency (RERA)’.
If you are a foreigner, keep in mind that you have to look only in areas that are designated to foreigners; these areas were hand-picked by his Highness Sheikh Mohammed Bin Rashid Al Maktoum to give everyone the chance to own a home in Emirates.
4) Establish an agreement
Now that you have laid your eyes on a property and done your research, it is time to outline and negotiate the terms of sale with the seller. You can do this step on your own, without the help of an agent.
5) Sign the agreement
Following that, you now need to sign the agreement of sale, or what is known as the ‘memorandum of understanding (MOU)’. You can find this document on the website of Dubai land department, in the contracts section and is entitled ‘contract F’. Don’t forget to read the contract thoroughly before you sign. As mentioned above, you are now required to pay a down payment of 10% to the seller.
6) Apply for a No objection certificate (NOC)
You are almost there! You are now halfway through the process of owning a property in Dubai. Now you and the seller need to meet in the office of the developer to apply and pay for what is called a ‘No objection certificate (NOC)’ to transfer the ownership from the seller to the buyer. After making sure that there are no outstanding fees on the property, the developer will issue the NOC.
7) Transfer the ownership of the property (with Dubai Land Department)
Now you have to meet the seller at the office of ‘Dubai Land Department’, where you will be affecting the transfer. They will ask you to make the payments in the form of a manager’s cheque that should be available to cash on the date of the transfer. Only then, the office will issue a brand new deed in your name. Congratulations! You’re now officially a property owner in Dubai.
What if you can’t buy your property in cash?
If you can’t buy your property in cash, which realistically happens with most prospective buyers, you will have to apply for a mortgage.
The steps are easy; all you have to do is choose a bank. If you’re a foreigner then you might have better luck with international banks than you have with a local bank. Your chances are higher if you have an excellent credit score or if you already deal with that same bank in Emirates.
The important question is, what can you do to make sure your mortgage gets approved? To secure an approval, you have to prepare these documents:
- Salary letter from your employer
- Any salary slips you might have received
- Bank statements of the last six months
- Passport copy with both a photo and visa page
- Copy of your Emirates ID
- Copy of current credit card statements
- Proof of residence
This stage might take up to 7 days if you are an employee and longer if you are self-employed. In Emirates, the most common installment plan spans 15 years and the maximum span is of 25 years. The monthly payment on a mortgage will never exceed the 35% of a net household’s income and the total amount of the mortgage cannot be set above 60 times of combined monthly household income.
What if the seller has an existing mortgage on the property?
This is a very common case; sometimes, the seller has an existing mortgage on the property. In this case, the buyer will have to settle the seller’s mortgage in full before applying for the NOC. Mortgage cases can complicate the process and make it longer. In such cases, the buying process can take up to 45 days. However, if the buyer will be paying in cash, the process can take as little as 10 days.
If you do face any problems during the buying process, you need to seek advice from a local lawyer in Dubai. Also, any disagreements between you and the seller should be reported to the ‘Real Estate Regulatory Agency (RERA)’. And now all that is left for us is to wish you good