A step-by-step guide on how to go about buying your own home in Dubai
The process of buying a property in Dubai may be different to that of your home country’s. Our handy guide will help you familiarise yourself with the steps so your purchase will go as smoothly as possible.
1. Set a budget
The most important thing to do first is set your budget. If you are buying in cash make sure you have the money available to you here in the UAE for the time of transfer.
2. Get a mortgage, if required
If you need a mortgage then you need to speak to a mortgage advisor and have them arrange pre-approval for you from the bank, which tells you how much you can spend. Remember if you are getting a mortgage you will need a minimum deposit of 25%.
3. Find a RERA qualified broker
Once you’ve set your budget, find a RERA qualified broker that you trust and get to work finding your ideal home or investment property. You will sign a Form B contract with your broker to represent you in the upcoming negotiations.
4. Make an offer
Once you’ve found a property you love and are ready to make an offer, move quickly. Being ready to move quickly will put you in a stronger negotiating position so have your mortgage pre-approval ready and the 10% deposit you will need to secure the unit.
5. Pay the deposit
Once both parties are agreed on price, they will enter in to a legally binding agreement called an MOU (Memorandum of Understanding), referred to by RERA as a Form F. This will be done via the Dubai Brokers App and at this stage you will be asked to produce a current dated cheque in the name of the seller as a 10% deposit and a post-dated cheque in the name of the broker’s company for the commission. The MOU should include all elements of the contract you are entering into, such as paid rent or service charges and the length of time allowed until transfer.
6. Hire a conveyancer
In most cases you will engage the services of a professional conveyancer to assist with the sales process – a good one will hold your hand every step of the way.
7. Get the No Objection Certificate (NOC)
Prior to the purchase, the seller will need to obtain an NOC from the developer who built the property which will ensure the property is free from any outstanding service charges.
8. “Block” the property
If there is a mortgage on the property you’re buying you’ll go through “blocking”. The seller will obtain a liability letter from their bank and you’ll come to the DLD to “block” the property with four cheques: one in the name of the seller’s bank for the outstanding mortgage; one in the name of the seller for the remainder of the purchase price; one in the name of the DLD for the transfer fees (4%); and a manager’s cheque in the name of the agency.
9. Transfer the property
On transfer day, you will meet at the transfer office with your broker, conveyancer and the seller. Property purchases can only be made in cash or by manager’s cheques so chances are you will have your manager’s cheques ready. Remember you will also need a cheque for 4% of the value of the property for the DLD transfer fees and cash for the DLD office as administration fees. Once the transfer is complete the sale is registered with the DLD and you will receive your new Title Deed and all keys/access cards to your property.
Congratulations, you are now a homeowner. You will need to make sure all utilities are registered under your name. You better start planning the housewarming party.
The house purchase fees at a glance
Aside from the down payment, there are a number of other up-front fees and related costs to build into your budget. These add up to around 7% of the total purchase price and include:
- 4% Dubai Land Department (DLD) transfer fee (based on total property purchase price)
- 0.25% DLD mortgage registration fee (% of total agreed home loan) + AED290 admin fee
- AED2,000-4,000 property registration admin fee (dependent on value of property)
- AED2,500-3,000 property valuation fee
- Bank mortgage set-up fee (could be zero, or anywhere up to 1% of total loan amount)
- 2% real estate broker fee, plus 5% VAT for agency fee
- 4% Oqood fee for off-plan sales only
- Conveyancing fee of AED3,000-6,000, depending on the value of the property.
Dubai Land Department… is located on Baniyas Road, in Deira. It’s open from 7.30am to 2.30pm, Sunday through Thursday. To contact them, call +971 800 4488 or email email@example.com