Expert advice to follow if you are buying a property in the UAE
Dubai – The UAE’s property market has attracted buyers and sellers from every country and every income bracket.
Over the decades, there has been a significant shift in the property market with more data available to make informed decisions, greater government oversight and a bigger number of players in the market.
With the wide range of options available to investors and potential home owners, Gulf News spoke with Walid Al Zarooni, owner and CEO of W Capital real estate, a company that has operated in the UAE since 2001.
Here is an 11-step checklist that Al Zarooni recommends you follow, if you are looking to buy a property, whether ready to move in or under construction:
1. Identify the purpose
Ask yourself - what is the purpose of this purchase? Is it for an investment or use?
"You cannot buy something as investment and at the same time you want to use it," Al Zarooni said.
Depending on the answer to this question, you then need to look at property details like the number of bedrooms, the location and services in the vicinity.
2. Set a budget
How much are you willing to invest in this property? Look at your financial situation and future financial plans and decide on an amount, whether it is Dh500,000, Dh5m or more.
"A lot of times I ask a customer what his or her budget is and they say, ‘it is open’. There is nothing called the budget is open," Al Zarooni added.
3. Don't overcommit
Make sure you have enough funds to pay the installments, especially when you buy an apartment that is under construction.
"They will give you the payment plan, make sure you can pay the installments. You cannot say in the middle of the contract that I cannot pay. You will lose your money and your apartment," Al Zarooni said.
4. Timing is everything
Choose when you want to buy the property. Should you do it when the market is experiencing a slowdown or when it is picking up? According to Al Zarooni, it is best to invest when people are selling.
"These days the market is slow, prices are less, there are good payment plans and developers are giving good services. This is the right time to buy. Buy when people are selling and sell when people are buying," he said.
5. Don’t get swayed by advertising
You might see some developers investing heavily in advertising, with their projects plastered across billboards on the highway or the crowded marketplace. Don’t let that convince you that buying from such a developer would be a sound investment.
"In my opinion, the advertising does not mean that the property is good or bad. I believe that a good property sells itself. You don’t have to take a decision based on advertising. We have found so many companies they put up huge ads and at the end of the day they took people’s money and ran away," he said.
To make sure you don’t put your life’s savings in a bad investment, follow the next few steps.
6. Seek out counsel
Has a friend or a family member bought property recently? Speak to them. Ask them if they would have any advice or a list of things you should avoid doing. It is best to speak to someone you know personally to make sure you invest your money wisely.
"If you were buying a car, you would not just get up one day and go buy it without knowing anything. Just like that, ask people you know where is a good place to buy and which is a good company to deal with," he said.
7. Check for registrations
Deal with registered brokers and developers only. Make sure that the broker you are dealing with is registered with the emirate’s land department or municipality.
In Dubai, there is an app called Dubai-Rest, by Dubai Land Department, where you can find all the registered brokers, developers and projects.
Even if you are buying property in Abu Dhabi, Sharjah, Ajman or Ras Al Khaimah, ask your broker for his registration or broker card, issued by the municipality or land department. This will be a unique ID issued to the broker and you can contact the relevant authority to make any necessary inquiries.
Ask for the project certificate
When considering a project that is under construction, ask the sales person to show you the project certificate that has been issued by the land department.
"For projects that are under construction you have to get a certificate from the land department and it should have an escrow account," Al Zarooni said.
In Dubai, the land department’s app also shows all the projects that are registered.
8. Don’t skip the fine print
Read the contract before you pay any money. Ask for a draft of the contract and read it properly.
"If you pay the money and then see that there is something that is not suiting you, you cannot do anything about it," Al Zarooni said.
Look at the basic information like whether the floor plan matches the model you have seen as well as the details of the size and number of bedrooms. Double check the handover date as well as the payment plan before putting pen to paper.
9. Don’t forget the receipt
Regardless of the amount you are paying, big or small, or whether you pay in cash, by cheque or a bank transfer, always get the receipt from your broker or developer.
10. Don’t get pulled in by false promises or quick returns
Al Zarooni has one advice for people investing in the property market – patience is important.
If a broker sells you a property for Dh500,00 and promises that he can sell it for you for Dh700,000 in a matter of months, walk out of such a deal.
"It's only talk to sell the property, nothing is true. When investing in property, you need to have patience, you cannot make money in a matter of months."
11. Track the progress
If you are buying a property which is under construction, contact the developer every two to three months and ask for a photograph of the construction to track the progress.
"In Dubai, developers also update the progress on the Dubai-Rest app so if you log in, you can find out where the construction is," Al Zarooni said.
Even if you have invested in property in other emirates, stay in regular contact with the developer to ensure that the construction is proceeding as per plan.
Making the right investment does not have to be a draw of luck. Doing your research, double checking the facts being provided by the developer or broker and staying informed can go a long way in making sure you get your money’s worth.