Buying a property is a big decision, whether it’s your first time or you own multiple investment properties. You must be aware of all the rules, processes, documents, and costs before buying a property. While the process of buying a property in Dubai is quite easy, you must follow each step, from applying for a mortgage to working with real estate agents and signing contracts.
Let’s understand each step of buying a property in Dubai to make your journey hassle-free.
- Start Budgeting
- Research Real Estate Market, Neighbourhoods and Properties
- Hire a Real Estate Agent
- Shortlist Properties and View Them
- Verify the Property and Seller
- Make an Offer and Negotiate
- Sign the Memorandum of Understanding (MoU)
- Apply for Mortgage
- Obtain NOC
- Prepare the Documents and Payments
- Transfer Ownership at the DLD
- Receive Title Deed and Take Possession
- FAQs
Key Takeaways
- After planning to buy a property in Dubai, start your process with budgeting.
- Get a mortgage pre-approval to determine the amount you can borrow for a home loan.
- Research the market, neighbourhoods, and properties.
- Work with an experienced and licenced real estate agent.
- Verify the property and seller after viewing the real estate.
- Make an offer and negotiate on payment terms, price, and handover dates.
- Sign a Form F, also known as an MoU, with the seller.
- Apply for a mortgage and complete the documentation
- Prepare the documents required to buy a property in Dubai and transfer the ownership at the DLD Trustee Office
- Take possession of the property after the sales registration.
Step-by-Step Process of Buying a Property in Dubai
Buying or investing in a property is a big step. You ought to be careful when it comes to long-term investments. That said, with proper budgeting and by learning the process, you can buy a property without making mistakes.
1. Start Budgeting
When you are planning to buy a property in Dubai, the first step is to start budgeting. If you have an amount saved to buy an entire property, it will be fairly simple: you will buy a property in cash. However, if you have saved money for a down payment, you must apply for mortgage pre-approval to determine the amount you can borrow based on your income and credit score classification.
When applying for a mortgage, you will need a 20% or more down payment as a non-UAE resident. Meanwhile, UAE nationals will need a down payment of up to 15%.
So, when budgeting, you need to save money for the down payment, depending on your property preferences. Additionally, you will need to add 7% to 8% to your budget for additional costs of buying property in Dubai.
Get a Mortgage Pre-Approval
Those buying property on mortgage in Dubai can get a mortgage pre-approval to determine how much they can borrow from the bank. This will help them decide on the property according to their preference.
For instance, if a buyer is getting a mortgage of AED 1 million, they can make a 20% down payment and buy a property in Dubai for around AED 1.2 million.
2. Research Real Estate Market, Neighbourhoods and Properties
After setting up your budget, the next step is to search for a neighbourhood and a property. You can either search for a community or submit a property buying inquiry in Dubai to share your preferences. Then, the agent will share a curated list of properties to choose from.
Choosing Neighbourhood
To determine your neighbourhood preferences, ask yourself these questions:
- Can you commute to and from your workspace?
- Is it a family-friendly neighbourhood in Dubai?
- Does the area have schools or nurseries?
- What amenities and facilities are available in the vicinity?
- Is public transport available in the neighbourhood?
- What’s the average rental yield of the neighbourhood? (If you are investing, look for high ROI areas in Dubai)
- How long are you going to stay in this location?
Choosing Property
If you are choosing a property, learn your preferences with these questions:
- Should I buy an off-plan property for sale in Dubai?
- Should I buy studio or 1-bedroom apartments for sale in Dubai? Or should I invest in 2-, 3-, and 4-bedroom apartments?
- Which one’s better according to my lifestyle: apartments, villas, or penthouses?
- Should I buy a furnished or unfurnished property?
- Which one suits my goals: ready or off-plan properties?
When choosing a property or neighbourhood, ensure you weigh different options and compare neighbourhoods. Analyse property prices and compare similar options. Moreover, if you are interested in off-plan properties, check developers’ reputation and track record.
3. Hire a Real Estate Agent
You must hire a licenced real estate agent. It is important for the property buying process in Dubai. A DLD-licensed agent can help you explore the real estate market more quickly. Plus, the agent knows the rules and regulations for buying a property in Dubai.
When you hire a real estate agent to buy a property in Dubai, make sure you sign a RERA Form B. It gives agents authorisation to look for properties on the buyer’s behalf.
4. Shortlist Properties and View Them
An agent will share a curated list of properties. You can visit and view them. Make sure you check the property properly. If you have a lower budget, you can join the DubaiSale WhatsApp community to explore distressed deals directly from the owners.
That said, if you are buying an off-plan property, review floor plans and payment plans. Also, go through the property photos, model apartment, and virtual tours.
5. Verify the Property and Seller
Verifying the property, title deed, and seller is the most important thing. Firstly, confirm whether the seller has the authority to sell. Some investors appoint Power of Attorneys to sell the property, so it is essential to verify.
Secondly, you must check the Title Deed when buying a property in Dubai by verifying registration and owner’s details. Also, check for outstanding mortgages, service charges, or other dues. For off-plan properties, check the developer, their track record, previous projects, and escrow account.
After complete verification, get a property valuation from a DLD-registered company. It will help determine the right market value. Property valuation charges start from AED 2000 depending on the type of property, neighbourhood, and other factors.
6. Make an Offer and Negotiate
After completing due diligence, the next step is to submit an offer to the seller to buy the property in Dubai. Negotiate the property price and payment terms. Agree on the handover date. Also, confirm who will pay the registration fees and agent charges. Usually, the buyer pays the registration fee and real estate agent commission.
7. Sign the Memorandum of Understanding (MoU)
After making an offer and verbal agreement, the next step in the process of buying a property in Dubai is to sign Form F. This RERA Form F is a Memorandum of Understanding (MoU), an agreement between buyer and seller.
This agreement is created after the buyer pays a security deposit cheque, an initial amount which is usually 10% of the property price. Moreover, Form F must include the property details, such as property status, location, price, plot number, master developer, and project or building name. Make sure you mention the initial amount in Form F to avoid any discrepancies.
The Form F must include details about the mortgage if you are applying for it. It must include terms and conditions regarding breach of contract. Moreover, the Form F must confirm agreement and price.
8. Apply for Mortgage
If you are looking to buy a property on mortgage in Dubai, you must take a pre-approval before making an offer. The bank arranges a property valuation when you select a property. The process for a pre-approved mortgage takes only 5 to 7 business days. However, it may take longer depending on the property and transaction complexity.
9. Obtain NOC
You must obtain a no-objection certificate (NOC) from the seller. The seller can obtain an NOC from the developer that confirms there are no outstanding payments or service charges. Also, an NOC is an important document required for selling a property in Dubai.
10. Prepare the Documents and Payments
Once you have completed the steps above, prepare the following documents for buying property in Dubai:
- Emirates ID, residence visa, and passport
- Memorandum of Understanding (MoU)
- No-objection certificate (NOC)
- Proof of funds or mortgage registration documents
- Property valuation reports
- Title Deed
- Power of Attorney (if you are not present in the country)
11. Transfer Ownership at the DLD
After collecting all the documents, you need to visit the service centres, the offices of the Real Estate Registration Trustee. Submit the required documents via the digital vault.
After that, pay the fees: 4% of the property’s value to the DLD to register the property sale. Also, you will need to pay an additional fee of AED 250 for a new Title Deed. There is a service fee of AED 2,000 for properties priced below AED 500,000 and AED 4,000 for properties priced above AED 500,000.
Not only that, you will need to register the mortgage. DLD charges 0.25% of the mortgage value as a fee.
12. Receive Title Deed and Take Possession
After completing the registration and payment process, you will receive an Electronic Title Deed. Also, you must receive keys from the sellers and move into the new property in Dubai.
FAQs
Yes, foreigners can buy property in Dubai, but only in the freehold areas.
As per the first-time home buyer initiative, buyers will need only AED 500,000 to buy a property in Dubai. However, it depends on the property type. Also, you can apply for a mortgage and receive up to 80% of the property’s value as a home loan.
Yes, it is ideal for long-term investors. Buyers can find more distressed deals and better payment plans on off-plan projects. Plus, there are multiple benefits of buying a property in Dubai. For instance, the rental yield is up to 10% in some neighbourhoods. Moreover, as an investor, you can earn tax-free rental income.
These were all the details on how to buy a property in Dubai. You need to take it step-by-step to ensure no mistakes. Always work with a licenced real estate agent and verify the properties before you buy.
Keep reading the DubaiSale blog for more tips and advice on the process of buying and selling properties in the emirate.
