By Zarah Evans at Exclusive Links Real Estate Brokers
If you are interested in saving on rent; using property as a savings policy or to simply enjoy the pleasure of living in your own home, we have put together the 10 key steps to enter the Dubai secondary property market as a first-time buyer.
Dubai is one of the most dynamic and fastest growing cities in the world and therefore it is key you make informed decisions with names that you can trust in the market.
Step 1 - Research
Research the available properties through property portals such as Property Finder or Bayut which will give you a sense of current availability and pricing and introduce you to active agents in the market. You can also visit websites of leading agency names in the market and explore and evaluate the neighbourhoods you are considering for your future home or investment.
Step 2 - Affordability
Consider your budget and affordability. Do you require a mortgage to buy? Do you need to transfer funds into Dubai to support the purchase? Lenders generally will support mortgages that are 7 times your annual income and the minimum down payment required is 25%.
Step 3 - Appointing a Real Estate Broker
Real estate agents play an important role when you are buying a home. They can professionally advise on areas, market prices and the costs associated with buying property in Dubai. They can assist with community knowledge, facilities, and amenities in the area. More importantly they can negotiate and secure the best price on your behalf. Ensure that your chosen agency is registered with the Real Estate Regulatory Agency (RERA) and that your expectations are clear from the onset. A RERA registered broker will charge a buyer’s commission. A government approved Contract between Buyer and Broker (Form B) should be signed to complete the appointment of any agency.
Step 4 - Mortgage Approvals
Before you start looking for a home, you will need to know how much you can spend. The best way to do that is to pre-qualify for a mortgage either with a bank directly or through a mortgage consultant.
Step 5 - Make an Offer
You can now seriously shop for properties in your price range. With either cash or a mortgage preapproval you feel confident to make an offer. Make sure you fully understand the status of the property, the seller and ensure that you are achieving the best price through your appointed agent. Check ownership and title deed documents on your property of choice.
Step 6 - Understand all Hidden Costs
Understand all the costs associated with buying a property and be aware of all service fees. Consider purchase price and other related fees such as title deed and mortgage registration fees, transfers fees and agency commissions. Consider set up fees of utility providers and annual municipality fees. Ensure that if any enhancements have been done to the property you are purchasing that the correct approvals have been obtained from the developer. You can conduct an independent home report should you wish to identify any areas in the home that need work.
Step 7 - Property Valuation and Paperwork
If you have chosen to purchase with a mortgage a home valuation will need to be done before final Loan to Value is determined and lending is approved. This confirms that you are paying a fair price for your property. As you can imagine, there is a lot of paperwork involved in buying a house especially if a mortgage is secured. Your agent can assist with documentation requirements and provide step by step instructions.
Step 8 - Close the Sale
At closing, you will sign all the paperwork required to complete the purchase, including your loan documents and a series of agreements. This will be the government approved Property Sale Contract between Seller and Buyer (Form F) and addendum provided by your agency in the form of a Sale & Purchase Agreement (SPA) or Memorandum of Understanding (MOU). Make sure that you are clear on the clauses and responsibilities of all parties in the agreement. Question the agreement and make changes if necessary. You will be required to put down a 10% deposit cheque that will be held with your appointed agent and access to the property may not be given until successful transfer which can be 45 -80 days after signing the contract.
Step 9 - Transfer of Ownership
Once all the approvals have been acquired from developers, banks service and utility providers you will be required to attend transfer of ownership with the seller and the appointed agents and banks. Ensure you have confirmation of all documents and payments required. This step will take place at a trustee office, a transfer office approved by the Dubai Land Department. Cheques will be exchanged, and all papers will be signed and then a title deed will be produced in your name as the new owners of the property.
Step 10 - Make your investment work for You
If you have not bought the property to live in, consider the rental options and the best way to manage your investment. Understand the responsibility of a landlord and make your property work for you. Consider appointing a Property Management company to maximize your revenue potential, collect and disburse rental funds and be a cost-effective solution in managing all maintenance issues and costs through the tenancy term.