Before making a real estate investment in Dubai in 2022, one must do extensive study. Global investors have voiced a great desire for the Dubai real estate market because it is the industry’s golden child.
However, the Dubai market has distinctive characteristics and criteria, which we advise you to become familiar with before purchasing any real estate. It takes time and careful thought to invest in a high ROI home in Dubai. Suppose you want to buy an apartment in Dubai Marina for investment, but you are totally blank and don’t know if it is the best place to invest in Dubai or not. This article provides important details to assist you in how to buy properties in Dubai.
Leasehold V/s Freehold
Understanding the distinction between these two attributions might be helpful when buying a Dubai home for sale. Leasehold and freehold areas are typically confusing to those who know little to nothing about the Dubai real estate market.
Leasehold Areas in Dubai
These are locations in the emirate where you cannot buy a home but can lease or land, as suggested. Ten to 99 years can be agreed upon when renting out property.
Areas of Dubai Freehold
Before, foreigners were not allowed to buy real estate in Dubai. However, after 2000, things have radically changed. Additionally, the Dubai government has taken significant steps to ensure that foreigners and expats buy properties in Dubai. Some places are freehold, allowing anyone to buy real estate there.
Understand The Steps To Buy Properties In Dubai
Investors or homebuyers have the option of purchasing a property off-plan from a real estate developer or directly from a homeowner. When viewing off-plan properties for sale, you must present your passport and a reservation form stating the conditions and specifics of the purchase transaction.
To draught the Sales & Purchase Agreement, the down payment is typically between 10% and 25%. (SPA). Both the buyer and the seller are bound by this document. The simplicity and speed of off-plan purchases in Dubai are one advantage. A property may only need a few houses to be reserved, and purchasers can do business anywhere in the world.
You and the seller must sign an MoU before you may purchase a home from a homeowner. The terms and conditions of the contract are outlined in this important agreement, which the buyer must sign before paying a 10% deposit to confirm and commit to the purchase.
During the transfer of ownership of the property in resale transactions, the seller and the buyer, or their representatives (Power of Attorney), must be present. Depending on the nature of the transaction and the state of the finances, the full process could take up to 60 days. Make careful to learn the transaction’s timeframe.
Fees
Understanding the costs associated with purchasing a house in Dubai is crucial. The following fees are incurred by investors and homebuyers when buying Dubai real estate.
Commission / Fee of the Agent
Agents in the Dubai real estate market normally get paid 2% of the selling or buying price. However, it depends on the level of communication between the investor or homebuyer and the real estate broker in Dubai.
Transfer Fee / Title Deed Registration for the Dubai Land Department (DLD)
Before 2014, the DLD assessed a registration or transfer fee equal to 2% of the property’s market value. However, the rule was changed, and buyers now have to pay 4% of the purchase price. Manager’s checks are used to make this payment.
Trustee Registration Fee
Property transfers typically cost a registration trustee charge. There are more than 20 trustee offices in Dubai. The trustee charge is AED 2,000 for property valued at less than AED 500,000 and AED 4,000 for property valued at more than AED 500,000.
Keep liquidity in mind, when buying property in Dubai
Although purchasing a home is exciting, you should keep in mind that you might eventually need to sell it. Any shrewd real estate investor understands the significance of liquidity.
Due to the domestic and international markets, Dubai has a lot of stuff, but some locations do significantly better than others in terms of value and resale potential. Service fees, amenities, property conditions, and locations can also have an impact on a property’s liquidity potential.
Programs for Real Estate and Residency
Only certain Dubai property buyers are eligible for some visa schemes. It would be best to learn how to become a resident if you intend to settle in the emirate. For instance, depending on your criterion, you are qualified to apply for 6 – 24 months visa permits if you purchase a home valued at least AED 1 million.
If you purchase a house valued at least AED 5 million, you might be eligible to apply for the five-year visa as long as you agree to keep it for three years and have a mortgage.
Mortgage Provisions/ Clauses
The best course of action is to ask for an opt-out clause in the MoU or Sales Agreement when buying a Dubai property through a mortgage and having the necessary deposit.
This clause denotes:
If the bank’s value of the property is lower than anticipated, forcing the buyer to pay a sizable deposit, it protects the buyer against losing the down payment used to acquire the property.
Suppose there is no opt-out provision and the buyer decides to back out of the agreement because they do not have a sufficient deposit. They risk losing the down payment, which is typically 10% of the property’s worth, in that scenario. Indicate the anticipated valuation amount to safeguard yourself against impending problems.
Work with the Top Real Estate Agent in Dubai
Buyers should engage with a reputable real estate agent that specialises in the region they want to buy a house in, such as Property Shoma, your guide to buy properties in Dubai. When choosing an agent to help you with your property finder Dubai, be sure they are licensed by the Real Estate Regulatory Agency and let you know the best place to invest in Dubai.
If the bank’s value of the property is lower than anticipated, forcing the buyer to pay a sizable deposit, it protects the buyer against losing the down payment used to acquire the property.
