The process with the banks is the same across the emirates. However, the transfer fees are different depending on where it is (Abu Dhabi is 2%).
The mortgage pre-approval stage to take between 5 -7 days for salaried employees and longer for those who are self-employed.
3. Organize insurance and find your property
It would be wise to start the life insurance process at this stage too. It is mandatory for almost all lenders and will take around three weeks. Buildings insurance, which is a precondition for all mortgages, can usually be taken out in-house with the lender as they tend to be the same price.
Once you have pre-approval you can start looking at individual units, Don’t just look at the prices. Look at the maintenance costs.
4. Sign memorandum of understanding
If you are satisfied with all that and agree on a sale, the next step is to sign a Memorandum of Understanding (MoU). That sets out the cost of the transaction and when it is going to take place, along with all the finer details.
First-time buyers should be careful as a lot of the information is technical and, if you do not meet your transfer date, your deposits are at stake.
5. Valuation through to No Objection Certificate
Once that is all done, the buyer requests a valuation on the property, which takes around three or four days. The bank then starts drawing up the final offer contract and, once it is signed, assuming there is no mortgage on the property, the seller applies for a No Objection Certificate (NOC) to prove they owe nothing on the property. When the certificate is released, the buyer sends a copy to their lender and all parties liaise to arrange a transfer date. The final offer will take two to seven days and the NOC three to five.
If there is a pre-existing mortgage on the property, the lender will ask the seller to produce a liability letter (essentially a settlement statement setting out what is owed) before producing a final offer letter. That will take around three to five days to produce and will be given to the buyer’s bank, which will draw up the final contract for the buyer to sign.
Once they have done that, they will take the check to the seller’s bank to pay off the mortgage and the seller’s bank will release the title deeds in seven to 10 days. Once it has been collected by the new lender, the seller can then apply for the NOC. As with a property without a Mortgage, the buyer then sends a copy of the certificate to their lender and all parties liaise to arrange a transfer date. Altogether this adds around 10 days to the process.
6. Transfer and title deeds
At the transfer, the bank brings the money they are providing for the deal and the buyer brings manager’s checks, a sort of banker’s draft which cannot bounce, for the balance to the seller and the developer in other emirates.
Once that happens the bank will get the title deeds, either there and then or potentially the following day and that’s it. You are good to go and the property is yours.
Steps to buying property in the UAE
- Save cash for deposit (around 25 percent)
- Save cash for 7.5 percent fees – agent, bank, Municipality or developer
- Apply for mortgage pre-approval – 5 to 7 days
- Search for property and agree a sale
- Begin to shop for life insurance – allow 3 weeks
- Memorandum of understanding – hire conveyancing company – 1 day or so
- Valuation by buyer – 3 to 4 days
- If seller does not have mortgage – final offer contract drafted by bank, seller gets no objection certificate, sends copy to buyer for their bank – 5 to 12 days
- If seller has mortgage – seller gets settlement statement/ liability letter, buyer’s bank pays off mortgage with seller’s bank, seller applies for NOC (extra 10 days)
- Transfer date set
- Buyer brings manager’s checks to transfer, bank brings money.
- Title deeds – transfer day or next day