Process of Buying Property in Dubai

Understanding the process of buying property in Dubai is paramount to making informed decisions and achieving your real estate goals. In this comprehensive guide, we focus on the key steps involved in Dubai property purchase process to offer invaluable tips for prospective buyers.

In the bustling metropolis of Dubai, where towering skyscrapers grace the skyline and pristine beaches beckon, the dream of owning a piece of this vibrant city becomes a reality for many. But amidst the allure of Dubai’s real estate market lies the intricate process of purchasing property, a journey that requires careful navigation and understanding of the nuances involved.

The process of buying property in Dubai differs if you are buying primary or secondary market.  Primary often referred as off-plan is technically any first recorded sale or purchase directly from developer. Secondary market usually referred as ready property but more precisely it is any purchase from an individual owner.

Therefore we break down the full process to buying property from primary and secondary markets in Dubai.

Process of Buying Property in Dubai – Primary Market (Off-Plan)

The process to buy a brand new property is very convenient. It offers multiple financing methods (installments, payment plans, mortgage, cash).

Furthermore, everything from contracts, Dubai Land Department registration, paperwork, identification documents, etc are taken care of by your real estate agent and developer. Therefore you don’t even have to be physically present in Dubai, unless you want to.

EOI (Expression of Interest) Process

EOI submission is done by providing your documents (passport copy) and a pre determined payment. The amount of payment is determined by the developer, and it is fully refundable in case you are not provided with satisfactory unit.

Read the full article about EOIs to understand why exactly is Expression of Interest aka EOI paid.

Booking & Downpayment

If you got the unit after submitting the EOI and you are satisfied with it, that unit is now booked for you using the funds provided for EOI.

In some cases where you do not need an EOI you can proceed with booking directly. After finding a suitable property you want to buy you will start off by paying a reservation amount usually referred as booking. That will secure the unit for you and you can have few days to transfer the balance of the downpayment.

Reservation amount can be anywhere from 2% of the property price and above, it depends on the amount accepted by the developer. You will be signing a reservation or booking form at the time of the booking as well. Your receipt for the initial payment will be provided as soon as the funds are reflected on the developers account.

In case you opted for an off-plan property or project that offers payment installments downpayment is most commonly 20% of the property price.

DLD and Administration Fee

Next, you will be paying what is known as 4% DLD.

Dubai Land Department Transfer Fee (also referred as Oqood registration or DLD) is 4% of the property price. Along the previously mentioned 4% DLD there is also an Administration Fee. Administration Fee can be anywhere from AED 1,092/- to AED 5,000/- used for paperwork including your SPA, Title Deed and so on.

4% DLD and Admin fees are always paid along with the downpayment. They are paid on the developers corporate account as the developer needs to transfer the funds to Dubai Land Department upon submission for property title transfer.

SPA Agreements

After signing it and taking care of the previous steps your SPA (Sales & Purchase Agreement) will be ready. This is your official contract of purchase which will be signed by you and developer in two copies and you will receive your copy. Meanwhile you will be continuing the installments as indicated on the payment plan.

A worthy mention is also that buying a primary market property actually has a lower transaction cost than secondary market.

Along with that, we do not charge agency fees or commissions on primary property sales.

In order to make a perfect investment or buy your dream home in Dubai Contact Us here.

Handover

At time when the building is completed, the developer receives BCC (Building Completion Certificate from DLD), you will be informed. You can then complete the handover installment and schedule the appointment for snagging.

Snagging is the check-up process that everything in your new apartment is delivered and functions as it should be. In case something is wrong, for an example you find a cracked tile or loose cabined door, developer will make the necessary amendments free of charge. Upon taking handover you also have a 1 year full warranty on everything in the apartment and 10 years structural warranty by law.

Process of Buying Property In Dubai – Secondary Market

The process of buying property in Dubai secondary market of course starts with finances. By determining your finance method, cash or mortgage, and setting the budget. In case you plan on buying through mortgage you should apply and get the pre-approval letter from the bank. Afterward it’s finding a suitable home or investment and concluding the deal.

Now that you have that sorted we are proceeding to the actual process.

MOU Agreement

The next step in buying property in Dubai is signing the sale agreement, also known as the Memorandum of Understanding (MOU).

Your real estate agent will prepare the Form F or MOU.

Once the contract is ready, both the buyer and the seller have to go and sign it before a witness, a real estate agent, at the Registration Trustee’s office.

Payment of Security Deposit

The buyer also needs to pay a standard 10% security deposit on the property. It is paid to the Registration Trustee, which is returned once the property transfer is finalized. Security deposit will often be requested before signing MOU in case that transfer is delayed by any party. In these cases cheques are given to agents company for which scanned receipts are given. Upon transfer the cheques are returned.

Getting the NOC

Next up, you as a buyer and the seller, along with the real estate agent, need to meet at the developer’s office. You need to meet in developer’s office in order to apply and pay for a No Objection Certificate (NOC) to transfer the ownership. The developer will issue the NOC only if there are no outstanding service charges on the property. Therefore they need to be taken care of upfront.

DLD Transfer

Now that you’ve obtained the NOC, the last legal step in the process of buying property in Dubai remains. The last step is meeting the seller at the Dubai Land Department office for the transfer to become effective.

Required Documents

You must have the following documents ready with you before visiting the DLD office for the transfer to take place:

• A manager’s cheque for the property price payable to the seller
• The original identification documents of buyer and seller (Emirates ID, passport and visa)
• The original NOC issued by the developer
• Signed Contract F (MOU)

A new Title Deed will be issued under your name after the formalities are completed. Congratulations, you are now a property owner in Dubai!

Timeframe for Transaction

It is worthy of mention that buying secondary market property is a long process. It can take anywhere from 2 to 10 weeks.

Longer if the property is mortgaged and the buyer is purchasing the property through a mortgage.

Also when it comes to the cost of transactions in the secondary market, it is higher than the primary market purchase. Here are the following expenses on top of the property price itself.

Transfer & Administration Costs

The administration costs as part of process of buying property in Dubai comprise of:

• Dubai Land Department fees – 4% of the property value + AED 430 for land or AED 40 for off-plan or AED 580 admin fee for apartments and offices
• Property Registration Fee
• Properties value below AED 500,000: AED 2,000 +5% VAT
• Properties value above AED 500,000: AED 4,000 + 5% VAT
• Fees for issuing the Title Deed – AED 250
• Agent’s fee of 2% of the property value

In case it will be a mortgaged property there is also a mortgage arrangement fee for the bank which amounts to 1-2% of the loaned amount. Before lending the amount bank will need Property Valuation fee between AED 2,500 to 3,500 + 5% VAT.

At the time of transfer Dubai Land Department also charges a 0,25% of property selling price to register the property as mortgaged.