Tips to Remember Before Buying Off Plan Property in Dubai
Ever since the freehold law in UAE was approved in 2002, Dubai has become one of the top-of-mind places for investors to buy, sell, rent or lease property. With a stable market that has endured different economic challenges, buying property for sale in Dubai has been a viable investment opportunity even for expats living in Dubai.
It is important, however, for first-time investors to know several information before getting into a property purchase. This is to avoid monetary losses resulting to a failed investment. Here are some of the essential tips to remember before buying off plan property in Dubai.
1. Know the property buying process in Dubai.
When buying off plan property in Dubai, there are certain documents required by developers from their investors. Requirements include passport copy, Emirates ID and reservation form (containing the deal’s terms and conditions). There will also be a reservation or booking fee amounting to 5 to 15% of the total amount which will be paid to draw up the Sales and Purchase Agreement (SPA) which will be signed by both parties.
If you intent to buy off plan property from a real estate agent, make sure that the broker is registered with the Dubai Land Department. Choose one that effectively connects you to developers and guides you throughout the purchase process.
2. Research about your desired property.
Do your homework and personally research on the off plan property in Dubai you wish to buy. If buyers of ready properties hire surveyors to check the premises of their prospected home, off plan projects should also be given such thorough inspection. Study on the developer’s legacy and see if they keep a record of completing properties on time.
Also get information about the location. Is it near grocery stores, schools, shopping malls, restaurants and other areas that you can’t live without? Are there transportation stops available? Is it located near your workplace? If possible, personally visit the area to scout if there are any factors that would be disadvantageous to you.
3. Calculate the additional acquisition fees.
Aside from the actual price, buying off property for sale in Dubai also comes with other charges in line with your property purchase. Some of these additional fees include legal fees, developer fees or agent fees. Off plan properties also require its buyers to pay 2% Dubai Land Department (DLD) fee for land registration.
As for maintenance fees, this amount varies depending on the property size. It can also be a fixed rate for some properties. It is important to know the total amount of fees that you will be paying as it can be a relatively huge amount when added to the actual price of your chosen off plan project in Dubai.
4. Get expert advice.
It is still advisable to get the opinion of a professional when it comes to purchasing property. While it is not required by the law, getting the view point of a legal expert and a real estate advisor can help you communicate your specific questions so as to prevent untoward losses or failed investment.
5. Carefully review and understand your property contract.
Once you have already gathered all the information you need and all the advice you can get, it is time for you to carefully review and understand the agreement you will enter into. Buying off plan projects in Dubai or even ready properties require legal documents such as a Memorandum of Understanding (MoU) or a Sale and Purchase Agreement between the buyer and the seller. These legal documents detail the complete terms and conditions, including the responsibilities of both parties.
Make sure to check if your agreement clearly indicates the completion date of your desired off plan project in Dubai. The agreement must also contain the compensation to paid in case there is a delay in the expected completion date. Do not sign the agreement unless the whole content of the contract is personally clear to you.
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