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In ads, I often see similar properties with different prices and pictures. How do I choose the right one?
This is a common problem in the market. Sellers believe that listing their property with different agents creates faster results. However, the opposite is true. Find a good RERA-certified agent, sit down with him, discuss exactly what you are looking for, what your budget is, your expectations, your time frame and how you are looking to finance your purchase. Your agent will take away the tedious task of contacting many agents. He will assess the market and find the most suitable properties. He will verify if the advertisement is genuine and will negotiate the best price for you. Contacting many agents in the market will create a false demand and will make it harder for you to negotiate the best price. As you have to pay a commission in any case, it is best to pay the agent who has actually worked for you and represents your interest.
Some of my friends have invested in off-plan properties and plan to flip them. Is it a good strategy?
If your friend bought a property with a down payment of 10 per cent and sells it with an increase of 10 per cent, then he makes a 100 per cent return on investment. But all conditions have to be right in order to realise such profit. Problems can occur if he has to make further payments when the market goes down or if the project is delayed. Greed also plays a major factor. Some investors only see the big returns; e.g., they purchase a property worth Dh2 million although they only have Dh500,000. Initially, this looks good as long as they won’t have to pay more than Dh500,000. If the market changes and they are not able to sell the property, they have an obligation towards the developer, and they might lose the property or are forced to sell at a loss in order not to lose everything. Take all factors into account and have a budget for the total amount.
The news says that the real estate market is going down. Why are professionals advising that now is a good time to buy?
Unfortunately, nobody has a crystal ball and we can only rely on trends and predictions. Every successful investor buys when the market is going down. Looking at the sentiment in the market and the predictions, everything looks like the market is going to recover latest in 2017. And as soon as we have the first sign of recovery, sellers will immediately increase their prices or take their listings off the market. If that is the case, it is too late to get a real good bargain. Currently, there are fantastic offers in the market and with a good negotiation strategy, you can make fantastic investments. Rents have not fallen as much as prices have gone down in the last 24 months so rental returns are very attractive. And with a long-term investment horizon, you will end up with a healthy and above-average return on investment even if we experience a further slight drop in the market in the next couple of months.
I have a property under the name of a JAFZA company. What can I do to get the property under my name?
This question is not easily answered in general. In order to save the transfer fee of 4 per cent to transfer the property from the company to your name, you need to be the sole shareholder of the JAFZA company. In this case, you can gift the property to yourself. You will only pay a fee of 0.125 per cent of the actual property value.
Further administrative fees apply such as NOC for the Dubai Land Department (Dh1,000), developer NOC (normally Dh500), valuation report from DLD (Dh4,010) and admin fee for the trustee office (Dh4,530).
Also, please keep the fees of JAFZA in mind for the renewal of documents or translation services. If there are multiple shareholders in the JAFZA company, you have the possibility to transfer only the share of the other shareholder to yourself, paying the normal 4 per cent transfer fee; for your own share, you only pay the gifting. Gifting, in general, only applies to the next of kin.
Question of the Week: In order for me to sell my property fast, I am planning to give it to different agents. Is that advisable?
In short, definitely not. In order to maximise your price and sell your property faster, it is advisable to list the property exclusively with one agent.
According to RERA regulations, an exclusive seller’s agent has the task of selling the property in line with the seller’s time frame and his sole task is to maximise the sales price.
A good agent should explain to you in detail how the sales process looks like including the correct appraisal, marketing strategy, advertising tools, viewing reports, negotiations and the actual transfer of the property.
Dubai is a relatively small market and exclusive seller agents have to work with other agents to sell your property. A good exclusive agent actively works together with partners in the market to sell your property.
Further, he should take care of all the enquiries you receive from other agents. Some big advantages for you are that you only have one point of contact and you only have one price in the market. Your property will keep its exclusivity as it will not be overadvertised.
Also, should your property be tenanted, every tenant will be more cooperative if they also have only one point of contact and if they are not being contacted a couple of times a day by different agents.