The process of buying property in the UAE

When making a choice in the UAE, it is important for yourself to decide on the purpose of buying real estate - for personal use or doing business. Based on this, it will be clear where exactly it has to stop its choice. Dubai is the main center of concentration of the commercial and residential real estate market in the UAE, but there are several other emirates in favor of which the choice is made - Ras al-Haaimah, Sharjah, Ajman and Abu Dhabi. At the same time, the purchase procedure is approximately the same in all UAE.

If the purchase of housing is supposed to be for rent, then it is not necessary that these should be the most prestigious options: for example, Dubai has second-level areas where rental income will be higher than from facilities located on the first line, and investments and maintenance will be significantly less. Of course, it is best to address your requests to specialists who know the market from the inside, who understand all the subtleties of legislation and local mentality, have many years of experience in the UAE real estate sector.

 

Company selection

Today, all information about such companies, including reviews, can be easily found on the Internet, including personal profiles on social networks of those people with whom you plan to cooperate. If this is an LLC, then you need to check more carefully, request documents on the decision of the board of directors, etc. It is good if a specific company can be recommended by people well-known to the buyer who have already purchased real estate in the UAE with its participation. With an unsuccessful choice of a company, it sometimes happens that people acquire illiquid objects from dubious intermediaries and companies, overpaying for it by one and a half to two times. And a good broker will select a reliable developer and will be able to achieve a good discount not only on the secondary, but also on the primary market.

Freehold and leasehold

The main thing that a buyer of real estate in the UAE needs to know is what type of ownership of the object is supposed to be - leasehold (long-term lease) or freehold (full ownership for 999 years). Freehold is almost entirely concentrated in Dubai, there is in Ajman, and there are almost no such zones in other emirates. Therefore, it is important to carefully read the documentation of the object and its characteristics regarding ownership.

Preparation

If there is enough time and money before making a purchase, then experts recommend coming to the UAE several times, stopping in different areas to better understand and feel personal preferences for the subsequent correct choice. It is not recommended to purchase real estate if there is an intention to live in it for less than two or three months a year, because this is a kind of encumbrance that requires attention, maintenance costs. In this scenario, it is easier to rent a property for the period of residence without worrying about anything. And real estate for permanent residence and running a business or working under a contract should be selected based on your own income and preferences.

Registration procedure

When buying real estate in the UAE, it is worth "laying" 11-12% of the purchase amount of the object, taking into account all fees and taxes, with the exception of "special orders" - the selection of very profitable objects when a specialist can ask for an additional fee.

All the necessary documents are prepared by the selected company or the client's lawyers who know local laws, you can also provide a list of requirements for drawing up a contract to the selected real estate agency; this applies to both purchase and sale transactions of individuals and private companies.For registration of real estate in a project under construction, only a passport is needed, all other documents in English will be signed by a real estate company.

Opening an account

To purchase ready-made or secondary housing, you need to open a personal account in a UAE bank, which causes great difficulties.Not all banks provide such a service for non-residents of the country. In this situation, a lot depends on the broker – he will either choose a bank that will open the necessary account or make the payment through a state company specializing in such transactions.However, in the second case, you will have to pay a substantial commission.

When purchasing real estate on the secondary housing market, the buyer makes a deposit of 5-10% of the total cost (sometimes a reservation of 10,000-30,000 dirhams is made, and the first payment is paid when signing the contract of sale), which is usually carried out in the form of a check in the name of the seller, which is kept at broker's company before the transfer. It is strongly not recommended to transfer money to the account of a brokerage company, as well as to the account of the owner of the property from whom it is purchased. You need to open your own account, take a check for the required amount and transfer it when registering the transaction at the local land department in a specially designated room. There is nothing complicated in the procedure, it passes quickly and safely if the transaction is accompanied by an experienced broker.

The plans for subsequent payments may be different due to the diversity of developers in the UAE. There are options with payment of 40-80% of the cost already upon delivery of the object, there are options with partial payment within two to five years after delivery. Today there are ready-made options from developers with a payment plan in installments of up to seven years.

Signing the contract

Then a contract of sale is drawn up, where all the details of the transaction are prescribed. Such a document is signed by the buyer and seller (in this order) and after signing the deposit becomes irrevocable (i.e. if the buyer changes his mind, he loses his deposit, since after signing the contract of sale the apartment is removed from the market). According to the rules, the seller must also provide a guarantee receipt in the name of the buyer, in case he changes his mind to sell after signing the contract of sale, but this does not always happen.

Next, the broker receives all the documents necessary for the transfer from the developer. After such documents are received, you can go to the transfer, where all the calculations on the transaction take place at the same time, as a result of which the buyer receives a certificate of ownership. Keys are also transferred here, or copies of documents for rent, if the apartment is rented.

Expenses

When making investments in an object under construction (protected by an escrow account), the buyer will have to pay a registration fee to the land department, which is 4% of the total value of the property, as well as minor fees when issuing an oqood certificate. When purchasing ready-made or secondary housing, upon receipt of a title deed (title to ownership), you will need to pay 4% for registration with the land department and additional costs within $ 1,000.

When buying a home on the secondary market, the costs depend on the agreement between the buyer and the seller, but the buyer always pays for the services of the trust office where the transfer takes place. This ranges from 2100 dirhams ($570) to 5250 dirhams ($1,430) depending on the facility.

The remuneration of the real estate company is paid only when buying real estate on the secondary market and is 2% of the total value of the object. The services of the company for the selection and purchase of real estate in new buildings are not paid by the buyer.

Installment purchase

When buying real estate in installments (payment plans in the UAE can be completely different, up to individual) after completion of construction, some developers may require security checks from the bank from the buyer, which can only be provided by a resident of the UAE, but in most cases an experienced broker is able to solve this problem. It should also be understood that ready-made real estate in installments, especially for a long time, is often sold less liquid or at an inflated price. But with the subsequent competent management of the property, these nuances are leveled by the incoming rental income. At the same time, you can become a full-fledged investor and receive rent by paying only 30% of the value of the entire property.

The amount of the deposit when buying a house in installments on the primary market largely depends on the specific object and the developer: if the object is ready and the buyer pays 5% of the cost, then he can already be handed the keys, and the rest of the amount is divided into 59 months in proportional shares, but someone can request immediately 20% andetc.

Thank you for your help in preparing the material:

Oleg Nasyrin, Head of the company's directionNazarov & Partners

Sergey Luptakov, investment consultant of the company RIU Property

Maria Chernikova, realtor of the companyRustar Real Estate

Vitaly Shugria, company expert Drivenproperties