Buying a property in a foreign country is an exciting experience, especially when you are buying a home or luxury apartment for your family to live in it. Dubai is a dreamland for owning the property as people from across the globe favor the idea of living in Dubai. With the high rents of housing, property in Dubai is a lifetime investment for you and for your family.
If you are in the process of finalizing a property deal in Dubai, it is highly advisable to be aware of certain critically important things. Here are some things that you must keep them in mind before paying for the purchased property.w
1. Who owns the property?
This is the most important for you to know who is the real owner of the property you are buying from. Check their name on the deed and get verified from the relevant government department if it is the same person who is selling you the property.
2. Is it free property?
Sometimes, the owner sells the property because they cannot pay the debts, mortgage, or lien on it and want to get rid of them by auctioning it. Check out if the property you are buying is free from any debts, lien, and mortgage, tenancy rights, and other charges. You can verify it by applying for a No Objection Certificate (NOC).
3. Is the broker registered?
In Dubai, the government through Real Estate Regulatory Authority (RERA) registers brokers as individuals and issues them valid broker ID cards. Their record is also available with Dubai Land Department from where you can obtain a copy. Never indulge in a deal if the broker does not have a broker’s ID card. Some people may try to convince you that it is sufficient to be a national of the UAE so the copy of a valid national identity card would work. In fact, the broker’s ID card is different from the national identity card. Be aware!
4. Details of Finances
As per the laws, expats in Dubai are only entitled to borrow up to 75% of the property’s total value. This is when you are buying the property for the first time and you are valued at less than Dhs5 million or up to 65% or more.
The government would also look at your monthly salary and mortgage payments. Your monthly salary mortgage repayments must not exceed 35% of your total income.
Generally, 25% of the property price is to be paid initially, but you will also need to pay:
Agent fee –2% of the purchase price
Property transfer fee – Between 1% to 7 % of the purchase price
Registration fees – 1.5% of the purchase price, with an extra 0.25% in case of a mortgage
5. MOU Document
This is very important document as it contains the details of terms and conditions for sale and purchase of a property between two parties. You shall also have to pay a small deposit on the eve of signing the document. Get included all the points of the deal. The MOU document includes the following information:
Total purchase price
Time frame to close the deal
Consequences for failing to complete the deal
These are key points that you must keep in mind before taking any decision to purchase the property in Dubai. I hope you will find it to be useful.