When we talk about an off-plan property, it basically means a property that has not yet been built or is under construction. It is a common practice for people to buy property in Dubai that is off-plan, directly from the developer. In some cases they purchase can even be made directly from the investors.

When you buy an off-plan property, the process involves signing a contractual agreement with the builder, all while the property is still under construction. People prefer to invest in off-plan apartments for sale in Dubai for a number of reasons such as lower prices, flexibility of payment as well as the possibility of capital growth.

When you invest in an off-plan property in Dubai, it allows you to offer much lower upfront costs as compared to a property that has been built completely. This offers an advantage for buyers as they can choose flexible payment options that align with the diverse budgetary requirements of the builder. 

So, if you are looking to invest in a property in Dubai without having to commit huge sums of money on the spot, buying an off-plan property is an excellent investment for you. In this blog, we will discuss the various requirements that you need to fulfill so that you can buy an off-plan property without any hiccups, the procedure to buy property in Dubai as well as the numerous advantages of investing in off-plan houses for sale in Dubai.

HOW TO BUY OFF-PLAN PROPERTY

Here are all the steps required to be considered by the buyer before purchasing an off-plan property in the UAE.

• PLANNING YOUR FINANCES FOR AN OFF-PLAN PROPERTY

Let’s talk about the first crucial step of your off-plan property journey, establishing your budget. To simplify this process we will break down your expenses into three key categories: the down payment, installments and the legal costs. 

Let’s look into the details of the down payment. The down payment is basically an initial payment which varies from 10 to 20 percent of the total purchase value. This amount must be paid before signing a sales and purchase agreement. However, it is crucial to note that most financial institutions do not usually offer mortgages for this part and the buyers have to accumulate these funds by their own initiatives.

Next come the installments and the legal costs. In case your monthly income is enough to provide for both these expenses and you are in a good financial state to fit adequately with these costs, then the off-plan project of your choice is right for you. You have got nothing to worry about.

• CONNECTING WITH A REAL ESTATE AGENT

The next step in the off-plan property path is seeking help from a real estate agent. The benefits of this partnership are many since real estate agents possess a rich background of experience that makes them experts when it comes to guiding you through the complicated process of investing. These specialists may provide information about the project and estimate what value of this property would be on completion. It is a smart move to use their contacts with developers to bargain a final price or installment terms. It is important to remember that off-plan means conducting business on a projected structure. 

• FINDING OUT MORE ABOUT THE PROJECT IN DEPTH

Buying property in Dubai is a commitment that is made for a long period of time and the buyers are solely dependent on the floor plan before purchasing. It is crucial to find out and verify crucial details concerning the project in detail. These include evaluating the developer’s reputation in the market, looking at his past projects and handover dates, checking for any legal disputes or court cases taking place with that particular property owner as well as reviewing lease agreements pertaining to land. This thorough verification ensures that you are able to avoid any trouble before it becomes a concern.

• FINALIZING THE PAYMENT PLAN

Developers have several payment plans for investors which vary based on the amount that is to be paid after making the down payment. Select a plan that is consistent with the budget you have drawn up for yourself. Before finalizing the deal, study the details carefully regarding the interest rates that will be charged on it as well as any hidden commissions in your payment plan. With this approach, there is no doubt that it should be an informed and safe investment for your off-plan property.

• COMPLETING THE LEGAL PROCEDURES

Now that you have successfully sealed the deal with the developer, it is time to understand about the crucial legal steps that follow.

• ACQUIRE RESERVATION FORM

Once your off-plan unit purchase is confirmed, the first legal duty you have would be to get a reservation form. The main points of this document contain your personal data, property type, payment plan and / or downpayment sum. Before advancing to further steps, parties who participate in the case should sign this form.

• SIGN IN SPA (SALES AND PURCHASE AGREEMENT)

Signing a Sales and Purchase Agreement (SPA) is unquestionably one of the most important milestones in your off-plan property investment in Dubai. This landmark agreement captures important particulars such as the value of property, unit layout plan handed over date and payment schedule. Since this document acts as a written contract between both parties it is important to read the entirety of the citation. Make sure that there are no hidden fees or unclear terms and conditions that you would not agree to. Secondly, check whether the name of the developer and all other numerous details related to his/her personal information as well as the property are correct. Also, do not forget about registration with different governmental bodies including TAMM in Dubai and also the need for registration using the Government of United Arab Emirates online. The SPA operates as a legally comprehensive contract reflecting the arrangements agreed upon by both parties.

• TRANSFER THE MONEY INTO AN ESCROW ACCOUNT

The next step after the signing of the agreement is to transfer the money to the developer. In this respect, the team of developers must give you an escrow account in which funds will be deposited. To validate the escrow account, go to the website of any government institute that represents your emirate (EDLD for Dubai residents). After verification, transfer the amount to an escrow account via options ranging from wire transfer or credit card payment.

• PAY BROKERAGE COMMISSION

The next financial step is settling a commission fee for the agent or broker, if you have hired one. The commission is not a fixed amount and will mostly be dependent on the total worth of a property.

• PROPERTY HANDOVER

At the last stage, it is a good idea for the buyers to visit and inspect the purchased property at least seven days prior to the handover date. During this inspection, one can verify that the completed property is what was promised by the developer. Focus on the details of finishing, paint quality, interiors and material used. If there are any discrepancies detected, the buyer has a right to demand replacement or correction of any elements that do not meet the previously agreed-upon standard. This method makes sure that your acquisition of property is completed successfully and according to standards.

• PURCHASING AN OFF-PLAN PROPERTY: REQUIRED DOCUMENTATION

When you decide to go ahead with the procedure to buy property in Dubai, you are required to have a specific set of documents at hand. Here is the list of the required documents:

• Reservation form
• The SPA or the sales and purchase agreement
• A copy of your Emirates ID
• Mortgage contract (If applicable)
• A copy of your passport

It is important that you keep in mind that the above mentioned documents are those which are generally required. However, other documents may or may not be needed.

ADVANTAGES OF INVESTING IN AN OFF-PLAN PROPERTY IN DUBAI

There are a number of different benefits associated with investing in an off-plan property in the UAE. Here are some of the key advantages of purchasing off-plan property:

• FLEXIBLE PAYMENT PLANS

One of the biggest benefits of investment with off-plan houses for sale in Dubai is that there are quite a number of flexible payment plans offered. These arrangements are carefully constructed to meet the diverse demands of different budgetary needs. This is why they also provide you with monetary convenience and freedom throughout your investment cycle.

• HIGH RENTAL YIELDS

The United Arab Emirates presents high rental yield indicators and the ever-rising flow of immigrants into this region guarantees a constant demand for accommodation. When you invest in off-plan properties, you have the potential to take advantage of this growing rental market and earn amazing returns on your investment.

• LOWER PRICES

Another one of the biggest advantages of buying off-plan properties is the low cost of the projects as compared to ready resort units. Developers can even help start off the investment journey in a cost-effective manner by offering potential buyers with discounts and special offers.

• WIDER SELECTION

Off-plan properties offer a wide variety of projects to choose from. This diversity allows potential buyers to be able to choose a project that matches easily with their preferences, requirements as well as their and capital needs.

• LOWER MORTGAGE RATES

Other financial incentives include the readily available lower interest rates on conventional mortgages for off-plan properties. This beneficial trait enhances the overall cost-friendly characteristic, which makes the investment more enticing and affordable for potential clients.

• BUYER PROTECTION

When it comes to the legal part, off-plan properties in Dubai have a number of buyer protection laws in place. These laws are made to protect the interests and rights of the buyer. This offers a sense of security to the buyer when they make their investment decisions.

• CAPITAL APPRECIATION

Off-plan apartments for sale in Dubai are still one of the smartest investments for anyone as Dubai’s real estate market is on the boom which makes it easier to earn huge capital gains on properties. The property values show a positive trend which means that the investors will make substantial gains.

• CUSTOMIZATION

When you decide to invest in off-plan properties, there are a range of distinctive benefits that come along with this decision. One of the key benefits is the wide range of customization options available. This means that you can customize specific features of your property so that they are in sync with your own individual preferences and needs. This will turn your property into a place that represents your uniqueness and individuality.