From trying to lease or lease out, to buying or selling land, residential, commercial, retail or industrial properties, most of us are involved in some form of real estate transaction one way or the other in today’s market scenario in Dubai.
While for each property type each stage of the transaction has its own challenges, the actual search is one of the most daunting processes for every home buyer as the home being bought eventually houses their family, a factor close to one’s heart.
In other cases, investors buying residential properties are looking for absolute value for their money (more space, prime location, floor rise, corner unit, luxury fittings, attractive project features and amenities, upcoming government projects, or sometimes, all of these!) and of course incremented ROI for the monies invested.
Dubai is a land of opportunities in many ways, but especially when it comes to real estate. Your choices can make or break the wealth you plan to build, be it buying a home or investing in one for returns. To find the exact right property depends on how long and hard you search for one. In this aspect, all roads do not lead to the same result, since how you search and the choices you make can drastically impact what you end up purchasing – so it is very important to understand and be clear on how you should search for that ideal property.
The first question you need to answer is: why purchase real estate? List your priorities with respect to the home or investment you plan to purchase. These priorities and the purpose behind a purchase can greatly affect what type of property you should consider.
When purchasing your first home, it is important to answer certain questions, like: what is your price range, how big is your family and how many rooms might be needed? What about reserved car parking facilities and options to purchase additional ones? If you have children, then is it necessary to find a project with educational facilities in the vicinity (and by extension, do the school fees fit your budget) so they do not have to wake up too early to travel to school” And if most of the family members are working and rely on public transport, then is there acceptable road and rail connectivity to reach offices on time? Are there local health-care facilities, ATMs, food and grocery centres near the project? Also, think about how access to banks, entertainment centres, and malls in proximity help save time during off days and weekends, when you want to complete errands and your shopping quickly, allowing you to spend more time with family and friends.
On the other hand, when purchasing a property for investment purposes, the importance factors shift and are more focussed on assessing the return on investment. If you are planning to rent out, then it is expats who would be your target audience. In this case, it would be commercially beneficial to invest in apartments (depending on your budget, one or two B/H/K) rather than getting enticed into buying a luxury villa.
It is also equally important to assess factors that you usually would while buying a home when it comes to investments, since post purchase the property could eventually get let out to someone who wants to live there. The more ground covered with respect to the points mentioned above, the easier it is to find a tenant – and that much better the returns. If you’re looking to sell at some point in time, make a note to take heed of government projects and other public facilities coming up in the vicinity that may boost the value of the property significantly.
Understanding your financial capability is the next step in your home search. This would include, but is not limited to, researching your financial sources, ideally ones that are close by who could extend a helping hand, liquid savings at hand, advances that could be used, overall affordability and bank loan eligibility, impact on your month-to-month budgets and expenses when you purchase a home or invest in a property, post purchase payment planning (understanding EMI with respect to construction-linked or possession-linked payments and one-off charges like legal fees, developer or property consultant fees, land registration fees and maintenance deposits (excl. regular charges).
Most people say that everything boils down to location, location, location – and the statement is pretty much correct. Short list micro-markets as per your priorities and budget. Research the internet to learn more about micro-market locations and, if feasible, take a tour of the location to get a first-hand feel.
You can learn more about the properties available in preferred locations using one or more of the online real estate portals available for Dubai: Dubizzle.com, Propertyfinder.ae, Bayut.com, Zoomproperty.com, Houza.com and Gnproperty.com have all been around for some time, and there are a dozen or so more to use. Also don’t forget to visit realty exhibitions, watch TV property shows, and peruse property tabloids and magazines. Once you have a fair idea of what you are looking for, based on the above factors, prepare notes on what kind of property you would like to purchase, what is the purpose, what are your expectations with respect to the specific property and the overall development, preferred location(s), tentative budget, affordability and loan eligibility, if opting for one.
Brokerage Advisory Services
“A stitch in time saves nine”, goes the famous saying. So, once you have a fair idea on what you are looking for, find out more about local and regional property consulting firms, brokerage firms, and real estate agencies who are strong in the micro market(s) of your interest. Research their experience, previous transaction history, client list and testimonials, associations and developer networks. It is important that both the real estate agency (and the agent you work with) and the developer are registered with Dubai’s Real Estate Regulatory Authority (RERA). You should be able to get this information using the internet for established ones and the full list on RERA’s website. Also have a one-on-one discussion with a short listed few and you should be able to arrive at the one you would want to work with. Be sure to clarify their services, terms and conditions, applicable fees and payment schedule, which is usually on the successful completion of a transaction.
The advantages of using a real estate brokerage agency are numerous, and include awareness of the previous and current supply and demand scenario in a given micro market, full support with respect to site or project inspections, detailed property inspection material and project brochures for perusal and future references, scoops on promotions being offered with select developers, negotiating prices keeping buyer interest in mind, easy introductions to legal advisors for documentation, loan managers for securing best of finances and interest rates if necessary, end-to-end management of the sale transaction process and liaising on your behalf until possession is granted.
Once you’ve decided on the agency, it is very important to share your brief with respect to the kind of home or investment opportunity you are looking for, along with the micro-markets you have in mind. Share the one you have prepared. Be sure to ask them for suggestions as they are in the business of property consulting. Be sure to mention if you are specific about new projects (ready to occupy), off plan properties (presale properties) or keen on resale (second sale homes) and distress properties (bank held, sale of realty due to economic slow-down and job loss, relocation, down grading, etc.) An agency cannot short list the right set of properties unless you share what you have in mind. However, be clear on what your preferences are and do not to be carried away by what’s being offered – you are the best judge of what you need.
Now that you’ve shared your requirements, the agency will share a set of properties in the micro-markets chosen. Make sure you inspect all the properties so as not to miss out on anything. Use online portals to benchmark the properties you’ve seen or tools being offered by the agency. If you want to see additional properties, or have a few you’ve additionally found, do not hesitate to let them know as they would be able to offer unbiased advice since they are representing your interests. It is better to be either represented by an agency or search on our own, not to do both at the same time as then the effort is duplicated due to Dubai’s property market having all the more to offer.
If you ever want to make a course correction with respect to what you want, be sure to inform the agency. While it may turn out that their previous efforts might have been futile and they have to start again, approach the subject pleasantly and inform them on the logic behind your decisions. You can arrive at a consensus both on work and commercials.
As you progress through the site inspections and become fully aware of the features of various properties inspected, you could end up shortlisting a property or two of your choice. Be sure to ask for a check list from your consultant which covers most of the requirements you had listed in your brief. If you are working with a shared standard agency format, ensure that you cross check the details on your list and amend the list as needed.
Be it new sale, off plan, resale or distress sale, don’t forget to probe the seller with all the enquiries you have. Knowing how soon the seller wants to close the sale or the agenda behind selling the property, might spill a brownie point or two for you to better not only the prices, but many other factors.
It is important at this point in time that you have a person representing your legal interests, as there are many legalities involved in buying a property in Dubai. Use your friends, families, agency’s connections to find a legal advisor with experience. Finalise the terms and fees prior to initiating business. We have listed a few important legal aspects you might want to research while your legal advisor should be able to cover this ground.
Expats need to present lenders with the following documentation:
• Passport original and copies
• Proof of residence
• Proof of address
• Salary certificates or evidence of regular income
• Bank account statements for three to six months
It is the internet era and just lie any other cosmopolitan city, Dubai is right up the internet alley when it comes to finding pretty much anything you want. As always, Google search each of your priorities as deemed necessary. Do so if you need more information and again until you are very clear on what everything means. Also, take input from your family and friends who may have recently purchased real estate in Dubai, as they should be able to give you first-hand information which could come in handy many times during the process.
Also, always have a budget in your plan and stick to it. It is important that you don’t let your heart rule your head, which could lead to you getting drawn into a bidding war. If you’re not planning to spend the rest of your life in this property, it’s important that you treat it like any other investment and pay the correct price.
Photo source: Damac Lagoons Venice