While we keep hearing it’s a buyer’s market in Dubai right now, and the government has worked hard to make the purchase process appealing, straightforward and cost-effective, challenges remain.
Whether you are a first-time investor or looking to move your family into a forever home, the thought process you must engage in remains pretty much the same.
For instance, before you start searching, which agent might be best for you? Are they RERA certified? Do they have experts in the area(s) you are considering? What happens if they aren’t certified with RERA? Is the agent working for you or the seller? Are they trying to get the highest price for the highest commission?
You’ve probably begun looking online or considered looking online. But are those stunning photos even of the actual property? Is the deal really? Will the agency get back to you in good time?
Location is crucial for most of us, but do your research based on best yields and/or capital appreciation. That one-bed in a new development on the city limits might be a good price, but if there are no facilities, school, Mosque or medical clinic nearby, it might be tough to live there and to sell in the short-term. You need to gain access to impartial information, so you can decide if a deal really is a deal. Try to find out transaction value history in the area, and don’t simply rely on the agent, even if they are trustworthy.
Will you buy with cash, or take out a maximum mortgage? Who gives the best mortgage rates – a bank or specialised consultant? How long does the approval process take?
Allow yourself plenty of time to research, visit different locations and fully consider your options. You might not have time to see 15 different properties in 10 different locations, but can you afford to invest in a property that’s not right for your needs?
Once you have decided to buy, there’s a whole new set of hurdles. Seller negotiations can be tense for everyone, especially with an experienced agent as an intermediary. You might sign a MoU, without exactly knowing what you’ve signed, and if a valuation will come at the right price to go ahead – it’s often the case that buyers have an upper investment limit.
Paperwork can be worrying too. It’s common for a buyer to clear a seller’s mortgage at the bank – so be wary that a seller can disappear without completing on the transaction – ensure you have reassurances and security in place. Look out for additional paperwork requirements like a NOC from the developers.
Also Read: The importance of Real Estate Investing
Remember additional fees like a mortgage fee and life insurance are part and parcel of the buying process, along with around AED4,000 for a Registration Trustee Appointment, AED5,000 if buying off plan.
A final warning – snagging. Checking your new purchase for any faults before you settle the purchase is obviously a good idea. But who will do the snagging and handover of the unit? Has there been a proper inspection completed?
The path to property ownership is fraught with complexity. Be prepared for some lengthy trials and tribulations – and good luck in your hunt for that perfect asset!