A guide to buying residential property in Dubai

There’s a myriad of properties available in Dubai, to suit all tastes and budgets. From a studio in a sea view apartment in new Dubai to a sprawling oceanside family villa, and everything in between – the choices might seem overwhelming.

There are, of course, several options when it comes to buying, and here’s a brief guide on how to complete a property purchase in Dubai. With decades of real estate experience and local market expertise, ph Real Estate managing director, Nick Grassick, is on hand to help you make sense of it all. Firstly, look for an agency you can trust, with unbiased opinions and the widest range of properties within your chosen budget.

Cash buyer/ Cash seller

Firstly, if you’re a cash buyer buying a property from a cash seller, both parties must approve a legally binding contract, Form F, issued by the Dubai Land Department (DLD). We add an addendum detailing the financial responsibilities of both parties, and we will manage a 10% deposit, holding it in trust on the seller’s behalf.

The Seller will also need to obtain a NOC – No Objection Certificate – which is either signed at the developer’s office or online. These range in cost from AED500 to AED5,000 and can take anything from a day to a week to obtain. Typically, the seller pays service and maintenance fees owed for the calendar year, subsequently reimbursed pro-rata by the buyer on transfer.

The property transfer into the buyer’s name is completed at the Dubai Land Department (DLD), or one of its appointed transfer centers.  Once cleared funds are issued to the Seller, a ‘Title Deed’ confirming the buyer as the newly recognized owner is released immediately.

Cash buyer/ Finance Seller

Where the buyer is buying in cash, but the seller still has finance owing on the property, the contract signing process and NOC acquisition process are the same as the cash/cash scenario described above. Then, the process is a little different.

Firstly, the seller must request a liability letter (mortgage statement) from the lender (usually a bank). There’s a fee of around AED1,000 for this, normally covered by the seller.

Next, its normal procedure for the buyer to settle the finances of the seller, which will be deducted from the purchase amount owed on transfer. This process is normally completed at one of the Dubai Land Department trustee offices, with both parties present. The buyer must issue payments as ‘Managers Cheques’ to the seller’s bank (liability amount). The outstanding balance will then be payable to the seller for all transfer and professional fees, and the property blocked in the name of the buyer by the DLD.

Clearance of the seller’s loan amount normally takes around a week. The Title Deed will be released upon completion, and a clearance certificate issued so transfer may go ahead.

Finance buyer / Cash seller

Again, under this scenario, there are slight differences that are worth knowing before you go ahead with a property transfer. Key in this situation is ensuring you obtain ‘pre-approval from your bank for the finance required, which can currently be up to 80% of the purchase total, or 70% if the purchase amount exceeds AED 5million. Note that ph Real Estate has trustworthy relationships with established, independent, mortgage specialists.

Were you to wish to buy with a mortgage or loan, your bank must complete a professional valuation of your proposed property purchase, to ensure it’s correctly valued and structurally sound. Next, a formal mortgage offer is made by your bank, and life insurance must be arranged at this stage, too.

The transfer process is then relatively straightforward, completed at the DLD, or one of its appointed transfer centers. All payments will have already been made in cleared funds (manager’s cheques), the ‘Title Deed’ is released immediately, as are the funds to the seller.

Finance buyer / Finance seller

The final common purchase scenario we frequently deal with at ph Real Estate is where both parties are dealing with finance arrangements – ie both have mortgages or property purchase loans.

The same rules apply for gaining pre-approval, as above, before you may even begin viewing properties. As above, a valuation and formal mortgage offer will be made by the buyer’s finance provider.

The seller must apply for a liability letter (mortgage statement) from the lender (usually a bank). There’s a fee of around AED1,000 for this, normally covered by the seller.

Next, a bank-to-bank payment must be organized. The seller’s liability letter will be forwarded from the seller’s bank to the buyer’s bank, which coordinates to meet and pay the outstanding liability.

The buyer’s bank will send a representative with a physical ‘manager’s cheque’ (cleared funds) for the mortgage amount.

The settlement process typically takes one week, followed by the ownership documents being released to the buyer’s bank – required for the next step.

The contract signing and NOC are the same in every scenario, but the next step here is the actual property transfer into the buyer’s name. This process is completed at the DLD or one of its appointed transfer centers. Unless negotiated differently, the buyer is responsible for 4% of the purchase value in DLD fees; as well as an admin fee, currently AED 580, and an AED4,000 transfer center fee.

-This article is contributed by Nick Grassick – Managing Director, ph real Estate Brokers

Disclaimer: All views and opinions expressed in The Brew View – our opinion section – are those of the authors and do not necessarily reflect the official policy or position of TheBrew.ae, the company, or any of its members.