Top Mistakes When Book Your Home in Dubai
Purchasing property in Dubai can involve challenges such as unforeseen costs, dealing with dishonest agents, and discovering hidden defects. These pitfalls can be minimized by carefully estimating necessary fees, conducting a thorough inspection, and verifying the agent’s reputation.
Important Aspects to Consider When Buying Property.
To ensure a smooth homebuying process, it’s wise to do your prework. Research the developer’s reputation, estimate all associated costs upfront, prepare questions for your agent, and consider hiring a home inspector. This proactive approach will help you anticipate potential issues and safeguard your investment.
When reading this article, you will come across the following terminology.:
- Dubai REST is a user-friendly platform designed to serve the entire real estate community, from investors to developers. Accessible via an app, it offers up-to-date information on real estate projects, detailed profiles of real estate brokers, construction progress, rental and sales trends, and more.
- The Real Estate Regulatory Authority (RERA) is a government organization that oversees the property market in Dubai.
The Dubai Land Department is a government agency responsible for overseeing all property transactions in Dubai. They ensure that real estate deals are conducted legally and transparently, protecting the interests of both buyers and sellers.
Consider Your Associated Expenses
Investors often overlook the hidden costs involved in buying a property. These additional expenses can include fees charged by real estate agents, government agencies, and property developers. Such costs typically account for around 7% of the property’s total value.
The following charges are to be paid before the transfer of the title deed:
| Fees Details | Charges |
|---|---|
|
The DLD Free |
4% ( of the property value) Plus
|
|
VAT – applies to the property registration and the real estate agent fees |
5% |
|
The property registration fee |
|
|
Title Deed |
AED 250 (USD 68) |
|
Security deposit (returnable) |
10% of the property value or more, depending on the unit |
|
Real Estate Agent fees |
2% of the property value |
For instance, you have decided to acquire a completed apartment priced at AED 800,000 (USD 218,000). Let’s break down the respective charges:
| Fees Details | Charges |
|---|---|
|
The DLD Free |
AED 32,000 (USD 8,700) plus AED 580 (USD 158) |
|
The property registration fee |
AED 4,000 (USD 1,089) plus VAT of AED 200 (USD 54) |
|
Real Estate Agent fees |
AED 16,000 (USD 4,360) plus VAT of AED 800 (USD 220) |
|
Title Deed |
AED 250 (USD 68) |
The total estimated cost to acquire the selected property is AED 854,000 (USD 232,000).
Research the Developer
-
- Understanding the percentage of construction projects that experience delays can help you anticipate when the property will be delivered.
- The number of properties a developer manages is a good indicator of their industry tenure.
- Investigating customer complaints, such as contractual disputes or dissatisfaction with the completed project, can provide valuable insights into a developer’s reliability and problem-solving abilities.
- A developer’s specialization can be a crucial factor when considering a luxury property. If a company has primarily built affordable housing, their experience in the luxury market may be less extensive. This could potentially result in lower-quality construction or amenities, impacting your investment.
- Visit completed projects by the developer to gauge their commitment to quality. Examine the finishes, layout, and overall craftsmanship to ensure they meet your expectations.
Ask Many Questions
Dubai real estate agents need a valid RERA license. Verify their credentials on the Dubai REST platform.
Below is the list of recommended questions to ask the broker:-
- When is the property available?
- How much are the operating costs?
- Do parking spaces come as part of the total cost?
- Is the development pet-friendly?
For secondary properties it is important to additionally ask the following:
-
- Has the property been upgraded?
- How long has the unit been on the market?
- Why is the owner selling and how long have they lived here?
Pay Attention to the Contract Clauses
Avoid unpleasant surprises by carefully reading all clauses in the purchase agreement. This is especially important for off-plan properties. Make sure the payment schedule corresponds to the developer’s construction stages and confirm the completion date and any legal repercussions for delays.
Some developers impose a condition on resale for off-plan units, requiring a minimum payment. Address Residences The Bay, for instance, stipulates that homeowners pay 40% of the unit’s value before it can be resold. In addition, both off-plan and ready units may have a minimum selling price, restricting the ability to sell below a certain amount.
Check Faults and Defects
Many homebuyers underestimate the importance of a pre-purchase inspection and fail to engage a snagging specialist. This can result in costly surprises after moving in, such as damp walls that require expensive repairs and may force temporary relocation.
Before purchasing a property, especially an off-plan one, it’s crucial to inspect it for any defects. This will help you assess the potential costs of repairs and negotiate with the developer or seller accordingly.
Conclusion
When buying property, it’s crucial to set a budget, research the developer’s reliability, and read the contract carefully. Snagging can also help you avoid hidden expenses.