Process of Buying Property in Dubai

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.