Dubai Real Estate Sales Decoded

Dubai Real Estate Sales Decoded: Your Essential Glossary

If you are interested to invest in Dubai real estate or just curious about Dubai’s property market unlock the language of Dubai real estate sales and empower yourself with the knowledge so you can understand the terms better.

Explore the knowledge of Dubai real estate sales with below mentioned brief glossary:

RERA:  The Real Estate Regulatory Agency, responsible for regulating and overseeing the real estate sector in Dubai.

DLD: Dubai Land Department the government body responsible for regulating and overseeing land and property transactions in Dubai.

Freehold Ownership: It is a type of ownership where the buyer owns the property and the land it is built on. This allows the owner to freely sell or lease the property. It’s opposite to leasehold.

Leasehold Ownership: It is a type of ownership where the buyer having the right to use a property for a specific period, typically granted by the landowner or developer. Unlike freehold, leasehold ownership is temporary, which may include paying rent and following certain rules set in the lease agreement.

Developer: The company responsible for constructing and selling properties, whether residential, commercial, or mixed-use.

Escrow Account: When you buy a property off-plan, you deposit your payments into escrow account instead of directly to the developer. Escrow account is managed by a third party, typically a bank or a legal entity. The funds are released to the developer according to construction milestones, ensuring that your money is protected until the property is completed as per the agreed terms. This adds a layer of security and reduces the risk of financial loss for buyers.

Off-Plan Sales: Purchasing property that is yet to be built or completed. Buyers often pay in installments during construction.

Ready Sales: Buying property that is already built and ready for occupancy.

Down Payment: The initial payment made by a buyer when purchasing a property, typically a percentage of the total purchase price.

Mortgage: A loan used to finance the purchase of a property. The property itself serves as collateral for the loan, and the borrower makes regular payments to the lender over a specified period of time.

Booking Amount: Part of down payment a deposit paid by the buyer to reserve a property before the sales agreement is finalized.

Closing Costs: Fees paid by the buyer at closing, typically 5-7% of the purchase price. These fees cover various costs associated with the sale, including property registration fees, mortgage registration fees, and the real estate agency fee as applicable.

Brokerage Commission: The fee paid to a real estate agent or broker for their services in facilitating the sale of the property.

Appraisal/Property Valuation: An assessment of a property’s market value conducted by a certified appraiser. It helps determine if the purchase price is fair. Appraisals are often conducted and required by lenders (mostly banks) before approving a mortgage.

SPA: Sales Purchase Agreement. It’s a legal document that outlines the terms and conditions of a property sale between the buyer and Developer (primary/off-plan). The SPA includes details such as the purchase price, payment schedule, property description, and any conditions or warranties agreed by both parties.

MOU: Memorandum of Understanding is a legal document/sales agreement that outlines the terms and conditions of a property sale between the buyer and seller (secondary/resell). The MOU includes details such as the purchase price, payment schedule, property description, and any conditions agreed by both parties.

Addendum: An addendum is a short document added to a sales agreement to make changes, clarify terms, or add new conditions other than thats on the main contract.

NOC: No Objection Certificate one of the document required for transferring ownership from seller to buyer in Dubai from the developer stating they have no objections to the sale of the property. It also verifies that seller has no outstanding with the developer and service charges have been paid.

Service Charge: Fees paid by property owners to cover maintenance and upkeep of common areas in developments like apartment buildings or communities. During handover buyer will have to pay in advance for a year or quarter.

Oqood: Proof of ownership also know as the Initial Contract of Sale issued by DLD for off-plan property purchases.

Title Deed: A legal document that transfers ownership of a property from the seller to the buyer.

POA: Power of Attorney a legal document granting someone the authority to act on behalf of another person, often used in property transactions when the owner cannot be present.

Project Completion: This means that all construction work has been completed, and the necessary infrastructure, amenities, and facilities are in place. It’s an important milestone for developers and buyers alike, as it marks the point when properties can be handed over to buyers in few weeks or months.

Snagging: Identifying any defects in a newly built property before final handover.

Handover: The process of transferring ownership or possession of a property from the developer to the buyer.

Closing: The final stage of a real estate transaction where the buyer and seller sign the legal documents to transfer ownership.

This guide to the important terms used in the Dubai real estate industry that all sellers, buyers, and real estate agents must know. Mastering these key terms will help you be confidently like a seasoned real estate investor or buyer.

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