Step by Step Process of Buying an Off Plan Property

Buying an off-plan property is an exciting yet challenging process for first-time home buyers, experienced clients and investors who face various difficulties. Dubai’s real estate market offers considerable opportunities, and buying an off-plan property has become a famous choice among investors and end-users alike. Let’s go through a step-by-step analysis of how this process works!

Understand the Market and the Developer’s Reputation

The first and most important step in buying an off-plan property is understanding Dubai’s real estate market. Research the location, the growth potential of the selected area, and the infrastructure and developments planned around the project.

Something that is equally important is researching the developer’s worth and reputation in the market. Dubai’s real estate sector is a very controlled market, and it’s necessary to ensure that the developer is registered with the Dubai Land Department (DLD) and has a good market record. For more clarification, look deeper into their previous projects, delivery timelines, and customer satisfaction.

Secure Financing – Check the Developer’s Escrow Account

Before moving forward, it is very important to confirm that you are in safe hands. For the buyer’s protection, Dubai demands developers open a trustworthy escrow account for specific projects. All the payments you make towards an off-plan property must be deposited into this account, which guarantees that your money is only used for the project’s construction. So always verify the developer’s escrow account details before making any payments.

Explore Financing Options

There is a range of financing options for off-plan properties in Dubai. All the reputed developers in Dubai provide flexible payment plans, frequently allowing you to pay 20-30% during construction and the remaining payment after the project is completed. Some banks also offer mortgage facilities for off-plan investments, but confirming pre-approval is paramount before proceeding.

Get a detailed consultation from a mortgage advisor or your bank to find the most suitable opportunities for you, assuring that the payment plan aligns with your financial capabilities.

Reserve Your Property

Once you’ve selected the right property, and are confident in the developer, the next step is to book the unit. Typically, developers require a booking deposit of 5% to 10% of the property value. At this point, you should review all the property details, such as the floor plan, property size, amenities, view, and location within the project that best suits your needs.

For clearer understanding, all the developers often have show homes or virtual tours to give buyers a feeling of the ready property, so take advantage of these resources.

Examine and Sign the Sales and Purchase Agreement (SPA)

The Sales and Purchase Agreement (SPA) is the (contract) legal documentation between you and the developer. It summarises the property details and payment plans with a project completion date.

It’s essential to carefully read this contract, as it will also highlight your legal rights and restoratives if there are any delays or changes to the project.

An expert real estate agent with legal advice can help you if you’re doubtful about any clause in the agreement. Guarantee that the SPA mentions the expected completion date and any fines for the developer if they fail to deliver on time.

Follow the Payment Plan

Once you sign the SPA, you must follow the selected payment plan program. Off-plan properties in Dubai usually come with flexible payment plans that are applied during the construction period. These could be a 50/50 payment plan, a post-handover plan, or an extended instalment option. Dubai Developers are capable of offering innovative and client-friendly payment plans, so explore all options to find what suits you best.

Most off-plan properties offer an organised payment plan. This usually involves paying instalments during construction and settling the remainder upon handover. Guarantee you meet these payments on time to bypass any penalties or lose your deposit.

Observe the Construction Progress

While waiting for the construction phase to be completed, always look for progress updates. Reputable developers in Dubai keep updating their clients on regular updates through emails, newsletters, or buyer portals. Some buyers like to see the site occasionally to see how things are progressing.

Besides, the Dubai Land Department has a Real Estate Regulatory Agency (RERA) that follows project status, and you can also see these updates through the DLD’s online services.

This will also provide you peace of mind that the project is on track and there are no considerable delays.

Final Inspection and Handover

Now, when the developer finally hands over your off-plan property, you’ll be requested to do a final inspection, also known as snagging. During this procedure, you’ll examine the property for imperfections, undone areas, or interpretations of the agreed specifications.

Now, you will have to list these issues, and the developer will be responsible for rectifying them before the handover.

In Dubai, snagging is crucial to ensure that the property meets your expectations and the developer’s promises. After the snagging process, you can take ownership of your new home!

Handover and Property Registration

Once the final property inspection (Snagging) is complete and any notable issues have been resolved, the developer will hand over the property. You’ll need to register your property with the Dubai Land Department (DLD). The registration fee is normally 4% of the property value.

Dubai Land Department also issues a title deed to confirm your ownership. Now, what is the title deed? It’s a valid legal document that authenticates your ownership of the property. The DLD has facilitated this process, which can usually be completed within a few days.

At last, your property is legally registered in your name!

Post-Handover Considerations

After the handover, if you’ve bought the property for investment, you can either rent it out or put it up for sale. Dubai’s property market is very active, and if you are thinking of renting it out, analyse whether you’ll manage it by yourself or if you need the services of a property management company.

Why Choose Chestertons For your Off-plan Purchase?

Steering Dubai’s real estate market can be tough, especially when buying off-plan properties. Chestertons is the finest place to get firm assistance for your property purchase. With a profound knowledge of the Dubai real estate market and years of expertise, Chestertons can provide you with a detailed market analysis, assisting you in identifying which developers are accomplishing well and delivering projects on time. Chestertons’ professional off-plan team helps you make a better decision and align your investment with the right projects for maximum returns on your investments and security.

For any more questions, please do not hesitate to ask us.

Call us on: +971 4 381 0200