The sales procedure is relatively straightforward as long as your buyer has been properly qualified by their agent. If all of your documents are in order then you need to know whether the buyer is cash or finance, and if the later then whether pre-approval has been granted.
It is not necessary to employ a lawyer although some sellers, particularly if living abroad, feel more comfortable doing so. It is more appropriate to employ conveyancing services where there is a mortgage involved on either or both sides, given the process necessary to redeem a mortgage.
The first steps are as follows;
- You need to provide proof of ownership of the property (Title Deed, Oqood, SPA) along with passport copies of all owners.
- We conduct an inspection of the property and provide you with a valuation.
- A Listing Agreement is signed between the parties which is a legally binding contract. It declares that the seller is the legal owner and that you have given us the rights to advertise your property at an agreed price.
- We will arrange a time for our professional photographer to visit the property and take pictures for marketing purposes.
Once advertised, we will arrange convenient times to view the property if it is occupied by yourself or a tenant. If the property is empty, the most efficient way to arrange for viewings is to provide a key.
When a qualified buyer has been sourced then the negotiations begin and on agreeing the price and terms of purchase, we will provide a Memorandum of Understanding (MOU) or Agreement of Sale which is signed by both parties and a deposit, usually 10%, paid by the buyer. If a lawyer or conveyancer is used then they will produce and manage the documentation.
It is possible to appoint a Power of Attorney at this stage which means that the property transfer can be effected without you being present.
The process is fairly straightforward if there is no bank finance involved. The buyer and seller will agree and arrange a date for transfer at a Land Department Trustee Office where the purchase price balance and all fees are paid on that same day.
If you have no mortgage and the buyer is pre-approved for finance then the date of transfer will depend on the speed at which the funds are ready to be deployed and the balance made available by the buyer. The MOU will reflect this and give a long-stop date to complete the transaction.
If you have a mortgage and the buyer is buying in cash then you will need to request a Liability Letter from your bank which will give the balance required for clearing and, once received, this will be valid for approximately ten days. The buyer will need to settle the amount due to the bank, hence why the services of a lawyer or regulated conveyancer would undoubtedly be requested by the buyer. Once the liability has been settled and cleared through the system, the bank will release the Title Deed and the Dubai Land Department will “block” the property in their system to safeguard the buyer until the date of transfer.
If both parties are mortgaged, this is a more complex transaction that must be processed by a regulated conveyancing company.
The next stage is to apply for the No Objection Certificate (NOC) from the developer which, in most cases, must be attended by both parties. You, as the seller, need to be up to date with payments of all service charges and have the necessary permits for any alterations to the property.
Once the NOC has been provided by the Developer, the transfer can go ahead at the Land Department Trustee Office. You will receive the full balance in the form of Managers Cheques.
Costs for you to consider are;
- Transfer Fee – 4% of the purchase price plus administrative charges payable to the Dubai Land Department on the day of transfer in the form of a Managers Cheque. Responsibility for payment of this is agreed during the initial negotiations.
- No Objection Certificate Fee – a flat charge payable to the developer, the rate of which is determined by the developer and will range from AED 500 to AED 5,000.
- Mortgage Release Fee – AED 1,010.
- Conveyancing Services – between AED 6,000 to AED 14,000 depending on complexity of the transaction and negotiable between parties.
The expected timescale for the whole transaction is anything between two weeks for a cash to cash purchase and up to eight weeks when at least one of the parties has a mortgage.