As residential rents soar across Dubai, the emirate’s buoyant property market is leaving many to consider taking the plunge to buy rather than face annual rental hikes.
As Al Arabiya English reported this week, landlords who have faced a downward market for a long time are looking to capitalize on thriving market conditions by hiking rents during renewals – in some areas by as much as 40 percent.
While some are downsizing and moving to further-to-reach more affordable areas, there is also a surge in interest from residents laying down their roots and snapping up homes in the emirate.
November alone saw a surge in property sales transactions, Property Finder revealed this week, accounting for more than 10,000 transactions for the first time in years.
But buying a property can be a complex exercise and first-time home buyers can be overwhelmed by the choice of properties on the market.
Harry Tregoning, of Dubai-based property company Tregoning Property, told Al Arabiya English that there are certain steps that residents should follow.
Pick your location
Like every major city Dubai has many districts that are pretty diverse. “It is important to narrow down what you are looking for to an area then really zoom in on it,” said Tregoning. Factors involved in choosing an area may be as simple as aesthetics but more commonly come down to the proximity of schools, work or even entertainment.
Do your research
Now you an area has been identified it is time to do further research . “First of all, work out what type of property you want and if there is a real chance of fulfilling your expectations,” said Tregoning. “Then it is time to check the local environment in the area such as proximity to shops or is there a noisy distraction that could keep you awake?”
Determine financial requirements
Clarity on affordability at an individual level is crucial. “Have you got cash or has the bank pre-approved you for a mortgage?,” asked Tregoning rhetorically. “This ultimately will be an important part of dictating your options to you.” Do not forget the charges. “There is 4 percent of the purchase price used to transfer the title deed in the Land Department. The broker will also earn two percent plus VAT of the purchase price. There are a few other smaller charges for the transfer and NOCs as well. If you buy with a mortgage there is a 0.25 percent charge too.”
Find an agent
Tregoning advises to look online and look for agents who have multiple listings in the area. “They will be able to show you lots of options and give insight into the buildings,” he said. “Ask the agent lots of questions and get them really on your side. Ringing multiple agents is not so good as they will be less motivated to do a good job for you. A good agent can guide you to the most suitable property and also through the sales process.”
Make an offer
When you find the property that ticks all your boxes have a good discussion with the agent about making an offer. “They will advise what they think is achievable to negotiate,” said Tregoning.
“The agent will then put the offer through to the other party or their broker. You will be required to write a 10 percent security cheque then to make the offer formal.”
Sign the agreement
The broker will then put together a contract (MOU) setting out the terms and conditions of the sale and the agreement. “When you are happy with this, you must sign it and hand over the cheque and the seller should do the same,” said Tregoning. “That way, the 10 percent will pay out if either party withdraws from the sale.”
The next step involves arranging paperwork. “This includes getting an NOC from the master developer confirming there are no outstanding fees on the property,” said Tregoning. “The bank paperwork should also be in order prior to signing.”
Doing the deal
On the day of transfer the buyer and seller meet in the Land Department or a Trustee office to finish the deal. The contract is processed and funds are distributed. “After confirming all is in order and the transfer is approved you will receive the new title deed,” said Tregoning. “Then you can grab the keys and go and see your new purchase.”
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