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Question of the Week
I want to sell my property in Dubai. Can you advise me on how I can proceed. Do I need to share my apartment details with an agent?
Indeed, yes. To acquire potential and quick closing options, you must categorise a real estate brokerage company with whom you can share your selling agenda. Based on that, they will list your property on diverse platforms to generate the ultimate deal. You also need to safeguard that you do not disclose the property to several brokers as it crafts an erroneous impression in a potential buyer’s mind. It is quite imperative to have the right real estate broker who understands your prerequisite and has specialised knowledge of the community where your property is located. Before initiating a discussion with a real estate company, get a fair idea about your property’s current value. This will help you figure out the selling price, keeping in mind the market outlook. Here, an agent can certainly help you identify the workable figure. Once the agent is on board, you need to make your house presentable to attract the buyer’s eye and be flexible with the viewing hours. Get all your property papers ready and keep the negotiation door open for a potential buyer. If the purchaser is a mortgage buyer, you need to provide your property papers like the title deed copy, passport copy, floor plan, along with the MOU/Form F so the buyer’s bank can do the independent property valuation. Accordingly, the selling process can be taken to another step.
I read that if you have a debt in Dubai, you cannot leave the country. We are staying in a mortgaged apartment. If it is not paid off, what should we do?
You can certainly move even though you have a running mortgage in Dubai. You just need to be careful that there is no previous default payment or late payment issue with your bank. If you plan to relocate, inform your bank about it. As you will be considered a non-UAE resident, your lending profile will differ; hence, the bank will perform a reassessment of your case. Thereafter, parameters will change to loan to value (LTV) and interest rate. You need to provide relevant supporting documents from your new location, indicating your source of income and new correspondence address. It will take two to three weeks to set up a new mortgage loan account and a new savings account for your mortgage repayments. However, it’s always prudent to inform the bank about you current profile status.
I moved to Dubai and prefer buying a studio. I would like to go for a home loan. What is the difference between a ready and off-plan property?
If you just recently moved, obtaining a mortgage can be difficult as banks usually want one year length of service in the UAE; however, there are a few lenders that will consider your application based on your profile. If you get a pre-approval, it being your first mortgage in Dubai, banks can lend you up to 75 per cent of the property value. But they will conduct due diligence to get you qualified for the loan to value (LTV) as per your debt burden ratio (DBR). But if you plan to buy an off-plan property, as per the UAE Central Bank regulations, the buyer will be entitled up to 50 per cent mortgage of the property value from selected lenders only. The buyer needs to check if the project is listed with any lender in the UAE or not if planning to mortgage the property in the future to cover up the buying cost.
I am discussing a deal with a potential buyer who is interested in my property, but he is still waiting for his bank’s pre-approval letter. Any advice?
If you are conferring a deal with a mortgage buyer, the pre-approval letter is vital which certainly shows that you are dealing with an unpretentious buyer who is ready with the funds to take the deal to another level.
Ideally, sellers do not confer the deal if the buyer is securing the property with a mortgage and has no pre-approval from the bank. Every bank offers a letter to prospective mortgagors after analysing the buyer’s income documents and how much he/she can afford to buy. Some lenders charge an initial fee for pre-approval which is usually adjusted in the processing fee of the mortgage loan. I suggest that you request the buyer to come up with the pre-approval letter before you move ahead with him and amenably inform him that the deal is open to other potential buyers. If he is really interested, he will show you his bank’s pre-approval copy.
My tenancy contract will expire soon. I am undecided whether to renew it or buy a property. In London, where I have properties, mortgages go smoothly. I have no idea if it is similar here.
The procedure here is simple and speedy, too. It depends on which banks you are approaching, the property and so on. If all requisites are in place, it should not take 3-4 weeks to conclude the buying process. You can approach banks or hire a mortgage consultant to arrange the finance and get your income documents appraised. Once you are approved, look around the market for your target unit in your preferred location and sign the Form F, which is usually known as MOU, so the bank can perform a property evaluation and take you one step further. After obtaining the final offer letter and NOC from the developer, you can get the property transferred under your name at the Dubai Land Department. Accordingly, if you are planning to buy a property, start to do your homework now so you will have plenty of time in your pocket to decide.
Source: Dhiren Gupta, Special to Properties
Managing Director, 4C Mortgage Consultancy