This guide to selling property in Dubai aims to set out the main steps that are involved and that are likely to be encountered when selling your property. Hopefully the information contained within the guide will give you enough understanding and knowledge of the selling process in Dubai to approach the transaction in good confidence.
-
How can I start?
-
Do I really need an Estate Agent?
-
How does an Estate Agent arrive at a realistic valuation?
-
I’ve had several valuations. Which Estate Agent do I choose?
-
How much do Estate Agents charge, and is this negotiable?
-
What about choosing a Solicitor? How much do they charge?
-
What can I do to increase the value of my Property?
-
How should I prepare my Property for viewings?
-
What’s the best way to conduct viewings?
-
When I get an offer, should I take my property off the market?
-
How does the Sale proceed towards ‘Exchange of contracts’?
Completion:
-
How long should I give my Estate Agent to sell my property?
-
What can I do to speed up the sale of my property?
-
What if the Buyer reduces their offer at the last minute?
-
What if I can’t sell, but have a property I want to move to?
-
Do I have to pay the Estate Agent if my Property doesn’t sell?
How can I start?
With a number of issues to take into consideration with respect to the sale, the first step is to appoint some professional people to assist and advise you. Unless you are prepared to pay for your own advertising and promotional material, this means choosing an Estate Agent to value and market your property for you, and appointing a Solicitor to handle the legal side of the sale. If you are planning to buy another property, you may also wish to speak to a Financial Advisor about mortgage options.
People forget to appoint a Solicitor until a firm offer from a potential buyer is received and suddenly puts them into action. But there are several things a Solicitor can do to help prepare for a more rapid sale. And experience shows that it’s a good idea to be ahead of the game, especially if you are buying another property at the same time.
Do I really need an Estate Agent?
This depends on whether you are an expert, time reducer, patient and a good provider of necessary resources to do it yourself. However in the majority of cases it would be better to supply the assistance of an expertise. Estate Agents don’t charge you a penny unless they sell your property. You only pay for results, and a good Estate Agent will draw in more potential buyers than you would otherwise be likely to attract so it makes sense.
There is also the convenience of having someone else to take calls, to be expertise in time-wasters, and to act as a tricky negotiator in the market. An experienced Estate Agent can offer advice and expertise, too, if you have problems with a chain, say, or receive multiple offers. The Agent will have seen these many times before, and be able to handle things to your best advantage.
How does an Estate Agent arrive at a realistic valuation?
o An Estate Agent will visit you at your property to have a look around, and carry out what’s known in the industry as a Competitive Market Analysis (CMA). This costs nothing, and is based upon a number of criteria:
General market demand from Buyers
o The popularity of your area (shops, schools, transport etc)
o Current asking price of similar properties nearby
o Prices recently achieved for similar properties nearby
o Significant works/improvements carried out to the property
The Estate Agent will probably ask you a lot of questions. This is the mark of a professional Agent, who may ask you for your desired moving date, your reason for selling, and so on. Some people are wary about telling the Agent how quickly they want to sell in case it lowers the valuation. But a good Agent will tell you a minimum and maximum price they could achieve.
Be aware of any Agent who just asks you the price you want for your property and agrees. The Agent should be able to demonstrate why they think your property could achieve their stated valuation price. They may be able to quote selling prices they have achieved for similar property in the area, or have a Buyer on the books who wants a property much like yours. But ensure this is genuine: a few agents may use this plan.
I’ve had several valuations. Which Estate Agent do I choose?
Do some research on the Estate Agents you invite to value your property? When you telephone them, do they answer swiftly and politely? When you visit their offices, are you made to feel welcome? Little things like this can have a big effect on potential buyers.
Sometimes people immediately plump for the Agent who values their property much higher than any others. But it’s a good idea not to be swayed by valuation alone. If a valuation is exaggerated, you could waste weeks of time while your property languishes on the market, unsold. It’s not unknown for an Agent to call you in a few weeks to suggest the property be marketed at a lower value. Remember, too, that you are employing a whole firm, and not just the person who came and valued your property.
o Your instincts aside, here are some marks of professionalism that you may want to look out for Polite, friendly and well-trained staff.
o Bright color photos of properties in an attractive window display.
o Clear and helpful advice literature.
o High profile in the area.
o Efficient, computerized administration system.
o Comprehensive marketing e.g. newspapers, signboards, leaflets, Internet.
o
Potential Buyers all over the world can now view details of property for sale simply by hitting a few keys on their home computer.
How much do Estate Agents charge, and is this negotiable?
An Estate Agent’s fee tends to range from 1-3% of the total sale price, and is paid on completion. ‘Sole Agency’ deals (where you only instruct one Estate Agent) tend to be significantly cheaper than ‘Multi-Agency’ deals.
When there is a shortage of property on the market, you will find Agents offering to match or beat a competitor’s fee, and cut-price offers appear in the property newspapers. You may be able to negotiate a favorable deal. In steadier times, most agents charge around 2%, but the service they offer is likely to vary considerably.
A higher fee is worth paying if the Agent has the experience and ability to get you the maximum price within a reasonable time. For example, let’s say an Agent charges a fee of 1.5% to sell your flat. If he achieves a final selling price of AED 100,000, the fee will be AED 1500. Now, suppose another Agent charges a fee of 2%. If he finds a buyer prepared to pay AED 105,000 for your flat, the fee will be AED 2100. But you will still be AED 4400 better off than taking the “cheaper” option.
Choosing the cheaper Agent is a mistake if they don’t get results. An Agent who has to carry the cost of well-maintained premises, experienced staff, efficient computer systems, and professional advertising is truly earning their fee.
What about choosing a Solicitor? How much do they charge?
It may be that you already have a Solicitor who can handle your sale. If not, ask your Estate Agent, friends and neighbors if they can recommend one. If you happen to choose a Solicitor who is recommended by your Estate Agent, communication between them will probably be very good. The Solicitor and Agent are likely to be in regular contact on a number of sales, so they won’t waste time chasing one another.
The Solicitor should be a specialist in residential convincing for a basic conveyance service but - as with Estate Agents - it may not be a good idea simply to go for the cheapest deal. Solicitor’s costs can mount up, so make sure their charging structure is clear at the outset.
Ask what sort of service you can expect: will a Solicitor handle your sale, or will it be a less experienced legal clerk? Does the Solicitor have reliable systems for obtaining information speedily from local authorities and financial institutions?
When you come close to “exchanging contracts” on a property (the legally binding part of the sale process), speed is often of the essence, particularly if you are also in the process of buying another property. The last thing you want is to be held up by an inefficient Solicitor.
Fast-track Solicitors start the ball rolling as soon as they are instructed, so that a draft Contract of Sale can be drawn up and sent to the Buyer almost as soon as their offer is received. They will also ask you to complete a “Vendor’s Questionnaire”, to provide information for your Buyer’s Solicitor, which should reduce the number of queries and replies that have to be faxed back and forth between the two sides.
What can I do to increase the value of my Property?
In General Estate Agents will advise against major home improvements. This is because you rarely recoup the cost of your investment, and the Buyer may change it anyway. However, there are a number of simple low cost techniques that can help enhance interest in your property:
o Fill in and redecorate any cracks to walls and ceilings
o Put a lock on any rear gate
o Spring clean throughout the property
o Weed and clean up the garden
o Maximize a feeling of space - get rid of clutter
o Decorating may not be necessary - discuss with your Estate Agent.
o Make sure the shower works and is free from mould.
How should I prepare my Property for viewings?
First impressions do count, and the following tips should help viewers to appreciate your property at its best. Although you may be at work when viewers are brought round, try to do whatever you can:
o Clean up
o Air the rooms
o Hide clutter
o Vacuum clean and dust the main rooms.
o Give the bathroom sinks and baths a wipe over.
o Have some flowers in the main room.
o Fully draw back the curtains to get maximum daylight in the rooms.
o Turn the television and radio off (light music is fine).
o Close all windows that are affected by background noise (traffic, cars etc).
o Banish off-putting smells with, say, the aroma of brewing coffee.
o Try not to let pets and children interrupt the viewing; keep them occupied.
Bear in mind that potential buyers can sometimes be a bit later than the viewing time arranged. With this in mind, when a viewing is arranged, be clear about the window of time they have if you mean to go out afterwards. This will also help discourage lateness.
What’s the best way to conduct viewings?
o Agree with your Estate Agent who will conduct the viewing.
o Ensure you have all keys readily available
o Give time for viewers to discuss the property alone before they leave.
o Resist the temptation to badger viewers for a decision or opinion during the viewing
When I get an offer, should I take my property off the market?
Your Estate Agent will probably advise you against this, just in case the sale falls through. Even if everything seems to be in order, it’s possible that after the survey, say, the buyer may want to negotiate on price and you cannot reach a deal.
On the other hand, if you leave your property on the market, your Buyer may naturally feel somewhat aggrieved, since they may fear they could be “galumphed” by a higher offer. Whether or not you wish to pursue any additional offers is your decision. To do so might risk discouraging your Buyer, who may pull out of the Sale and start looking at other property as a result. If the latter is not convinced by your assurances that you will not accept other offers so long as the Sale is proceeding smoothly, you could also consider making a verbal or written undertaking to take your property off the market for an agreed period of, say, 7-28 days, whilst surveys and mortgage finance are arranged by the purchaser.
How does the Sale proceed towards ‘Exchange of contracts’?
In general, the sale process goes something like this:
Your Solicitor prepares the contract of sale. For this, you will need to have certain documents to hand. Please note that obtaining these often causes delays, so it is in the interests of the Vendor to chase them as soon as the property goes on the market. If your property is freehold, you will require:
o Title documents or any other proof of ownership
o Paid utility bills.
o Guarantees and warranties
o If your property is leasehold the documents will be as above, except:
o Leasehold title deeds will replace title documents.
o A history of service charge payments.
o A history of municipality charges.
o
Next, the draft Contract of Sale and a copy of any other proof of ownership (if the property is leasehold it will include a copy of the lease) will be forwarded to the Buyer’s Solicitor. The Buyer’s Solicitor will check the small-print of the contract, title deeds, service charges, and so on. This checking process may involve many specific queries. A good Vendor’s Solicitor will deal with many of these in advance, by asking you to complete a ‘Vendor’s Questionnaire’, which may cover:
o Restrictions/boundaries.
o Owner understands of rights of access.
o Any disputes over the above.
o Guarantees/insurance policies.
o Utility services at property.
o Planning.
o Lists of fixtures and fittings.
o Exchange of contracts
o
After settling any queries, the Buyer’s Solicitor will also need to obtain a satisfactory local search, and a copy of a mortgage offer. Once satisfied, the contract will be signed and a cheque for the deposit sent by the Buyer to the Vendor’s Solicitors. Exchange of contracts can then take place. Exchange means that the transaction is legally binding.
At this point in the procedure, it is important that the Buyer arranges building insurance cover for the property, as technically the property comes under the Buyer’s ownership.
Completion:
The final stage of the sale is normally set 2-4 weeks from the date of Exchange. On Completion, the Buyer’s Solicitor hands over the remainder of the purchase money to your Solicitor. From this, your Solicitor will pay off the Building Society or Bank (if there has been a mortgage on the property), as well as deducting their legal fees, and whatever fee you have agreed with your Estate Agent.
How long should I give my Estate Agent to sell my property?
You should allow an Agent 6-8 weeks to get a secure offer. After this, it usually takes about 4-8 weeks for an Exchange of contracts, and a further 2-4 weeks for Completion. Be aware that time-scales do vary with market conditions.
What can I do to speed up the sale of my property?
o You can’t always guarantee that other parties in the sale won’t delay you. On your part, however, you can speed things up by doing as much of the work in advance of the Sale as possible.
o Choose a “fast-track” Solicitor who will obtain and hold the Title Deeds in readiness to prepare a draft Contract of Sale, and to apply for a Local Authority Search
o Allow the Estate Agent reasonable access to the property to show potential Buyers round. If possible, let them have keys to show the property when you are out.
o Be flexible about last-minute viewings.
o
What if the Buyer reduces their offer at the last minute?
As the time to Exchange Contracts approaches, your Buyer may think you can be pushed into accepting a reduced offer (rather than lose the sale, and having to go all the way back to Stage One). It’s important not to panic, get furious and call the Buyer yourself. Instead, agree on a course of action with your Solicitor and/or Estate Agent to show the Buyer that you’ll not bow to such tactics.
In the first instance, for example, your Solicitor may wish to contact the Buyer to reassert your position, demanding whether they are serious about proceeding with the purchase, and asking for any serious reason to be put in writing. It may be that, when the Buyer’s bluff is called, they will soon back down. The success of this tactic does depend on whether either party can afford to delay the Sale. If the Buyer sticks to their guns, you will have to weigh up whether it is worth finding another Buyer. Carefully discuss the options with your Solicitor and Estate Agent. You may be able to reach a compromise with the Buyer.
Sometimes a Buyer may reduce their offer after the survey, or after their mortgage valuation survey. You will have to negotiate through this, again taking the advice of your Solicitor and Estate Agent. It is unfortunately quite common for the Buyer’s mortgage company to err on the side of caution, and value the property at up to 15% below the Estate Agent’s valuation. Sometimes buyers may proceed despite this by making up the difference from their own funds. If this is not possible others in the selling chain may be prepared to make up the difference - your Estate Agent and/or Solicitor will advise if appropriate, and carry out negotiations.
What if I can’t sell, but have a property I want to move to?
It’s unlikely that going ahead with buying the other property will be a viable option, unless you have sufficient spare capital to do so. But you do have the option of letting your property (on a short let for, say, 3 months) whilst marketing it for sale. Rents for short lets can be high - so you could cover your mortgage and have a bit left over to help with other expenses. If your Estate Agent does not offer a short let service, find one who does.
Do I have to pay the Estate Agent if my Property doesn’t sell?
You won’t have to pay the Estate Agent any fee. However you may have to pay your Solicitor’s legal costs incurred to date, although some Solicitors, particularly those operating a ‘fast-track’ service, may operate a ‘no sale, no legal fees’ scheme and it is worthwhile speaking to your Estate Agent about this before instructing a Solicitor.
