Research before buying your first property

Ask the agentPooja Shah

How do I go about doing my research before buying my first property in the UAE?

Treat buying a home like an exam where you have to scrub up and do your study. Whether you’re paying too much attention to your realtor and family “who just LOVE the place!” or are feeling the pressure to make a quick buy, moving into a house that hasn’t been thoroughly vetted can be a big, expensive, regretful mistake. So, identifying what properties are selling for around you is the first step to being a successful homebuyer.

What you can do about it: Do your research and do it first-hand. No realtor or family member can know exactly what you want more than you. Spend a day walking in the neighbourhood, learn about your neighbours, research about the local school and visit the parks. As for the house itself, get an inspection report. These can uncover unseen things like termites and flooding – two expensive undertakings.

Speak to a local agent to familiarise yourself with the basics of home buying. This can give you a clear picture of the market rates and trends. They can explain further how the purchase process works, what papers are required and how best to prepare yourself. Agents live and breathe real estate, so they are a great resource to tap into.

Buying a home is exciting and daunting, but doing due diligence can make the process a little easier to get you into your dream home with less stress.

How do I keep myself in check regarding overspending on the property of interest?

It’s important to be realistic about what you can afford. The final sale price isn’t the only cost to take into account when owning a home. Houses come with plenty of bills like transfer charges, commissions, future renovations and occasional unforeseen costs like plumbing and landscaping.

What you can do about it: Take a close look at your finances. Be aware of your current fixed costs and always leave some breathing room. Ask the homeowners what they spend in a year on their bills so there aren’t any surprises. As a general rule, your monthly housing costs (mortgage, service charge and electricity and water expenses) should not be more than 32% of your gross monthly income.

Seek the advice of expert property consultants who can help you assess whether you really need the property, whether it is such a good deal or whether another similar deal is around the corner.

How do I avoid an emotional property purchase?

Sure the house is gorgeous, fully renovated, painted with your favourite shade of cream and has an ensuite bathroom in every bedroom; however, it’s on a busy road and you have three young kids and two cats who like to run outside.

What you can do about it: Be smart! Visit the house at least twice (you’d be surprised at how your opinion can change on a second and third visit) and think critically. Go through every aspect of the house, every room, every floor, its location and neighbourhood and imagine what it would be like staying in the house for years down the road.

You should also look at other properties in the district before deciding to make your first home purchase so you can do a fair comparison.

Reviewing all the clauses with a reputable agent who is familiar with Dubai’s real estate market before signing the contract will ensure that your interests are protected.

Does spending less than what I have prepared for a purchase make me a good investor?

Yes, that is a good thing. But, if you spend too little on a home that you’ll outgrow quickly, you’ll incur the expense of moving (which can be quite pricey).

What you can do about it: Think ahead. Are you planning on starting a family soon? Will you outgrow the house? Perhaps stretching your money a little bit to stay in a house for a longer time would be a more sound financial decision.

Never make a poor investment decision just because you are pressured to buy. Especially for young and first-time home buyers, the fear of missing out often results in making a property investment when they are not yet financially ready. We suggest that you clearly define your goals and create a strategy, and recognise that property investment is a wise business decision.

When investing, consider the economic factors of the market chosen and buy a property which you can afford in both good times and in bad.

What should be on my final checklist before venturing into buying my first property?

The final sale price of the house isn’t the only cost when buying a home. Aside from the property’s total cost including shifting, insurance and maintenance, there are many “closing costs” that should be taken seriously when deciding what price range and the monthly mortgage payment you can afford. Your realtor’s commissions and transfer charges can all add up.

Typical expenses to prepare for, but not limited to, are title transfer fee to DLD upon purchase - 4%, real estate commission fees - 2%, maintenance fees for the upkeep of the building, gardens and shared facilities which may vary from each developer, and closing cost which is from Dh4,000 to Dh5,000. All these may change on a regular basis and expats, most especially, should first seek appropriate legal advice.

What you can do about it: Closing costs can be anywhere from 6%-7% (if lawyer fee is involved) of the final sale price, so be aware and take this into account when determining your budget.

Source: Pooja Shah, Special to Freehold Properties
Director, Greenhouse Real Estate


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