For decades, the UAE real estate market, and Dubai in particular, has been one of the primary destinations for property investors, both locally and internationally. The most attractive opportunities in this market are presented by off-plan properties, those being sold before the construction of a project is complete. Investors buy these properties expecting to make even more money when the prices rise at project completion. But if you want to sell the off-plan property, then what do you do? Do you sell and how?

This is rather common in the UAE where one sells an off-plan property even before its completion. The process is called “assigning” or “flipping” of the property. However, it involves certain conditions, legalities, and financial considerations that should be understood pretty well. So, let us dive deeper into the process involved in selling off-plan properties, key considerations, and steps to effectively complete the deal.

What is an Off-Plan Property?

Off-plan refers to the purchase of property before the construction is complete. It is a very trendy investment for investors who buy these properties at relatively lower prices, expecting that the price will go higher once the building is ready. Such properties can be very promising returns, mainly in fast-growing regions like Dubai. The sector for real estate here is very attractive.

Most of them hold until completion to achieve maximum value; however, some may sell off before its completion. One may even sell off-plan property even before getting ready for occupation. This could enable the seller to bag an excellent profit, if conditions within the market prove favorable.

Off-Plan Properties Can Be Sold Pre-Completion

Indeed, one may sell off-plan real estate before the time the house becomes ready for occupation, but any actions taken are bound by regulation, legal measures, and other financial steps. The preconditions may consist of acceptance on the part of the real estate developer, execution of payment steps, and all necessary registration steps are carried out appropriately, which makes the sale transaction valid and final.

This comprises such considerations as some of the keys with respect to sale in off-plan property in Dubai or else where in UAE:

Important Considerations in Selling Off-Plan Property Before Completion

Developer’s Approval

You can sell the off-plan property only after you get a No Objection Certificate from the developer. This No Objection Certificate is an official acceptance by the developer that they have no objection to your sale and that all payments pertaining to the said property are all in order. In the absence of the NOC, the sale cannot be executed and may even disallow you to transfer ownership to some other person.

Another thing is that the issue of an NOC is normally not free and the cost differs from one project to another.

Payment Milestones

Most developers require that some percentage of the cost of the property be paid in advance before they could approve a resale. The percentage may either lie between 30% to 40%, or be lesser, though this varies with the different developers. This, therefore, must be checked with the developer as regards their specific payment requirements. The payments ensure that the property buyer is serious about his investment and provides some guarantee of financial security for the developer.

Dubai Land Department (DLD) registration

The registration fee that DLD levies in lieu of registering this transaction at its office makes the transaction legally effective from the moment NOC is received from Dubai Municipality relating to the mutually agreed sale transaction. Roughly, 4% of the sales price of the property is a cost for DLD for registering that transaction. Since actual conveyance cannot be affected without such a process involved in DLD’s process, there results proper ownership to the buyer while making him the owner.

Other costs that may arise in the transferring of ownership from the DLD fee are shown below:

• Transfer Charges

This is for properties whose price is less than AED 500,000. The cost of transfer amounts to AED 3,500. For more expensive properties and whose value is AED 500,000 upwards, the price is AED 5,000.

• Charge for NOC

The NOC fee issued by the developer is different for each case. The charge for NOC varies from AED 5,000 and goes above.

Market Conditions

Conditions within the market define whether or not selling an off-plan property prior to its completion is the correct decision. As one can notice, the Dubai property market changes remarkably with changes in demand and shifts due to a number of causes that eventually affects the investor’s behavior. A person has to track all of these changes so that he would be in the right time frame to make some profitable sales.

Research the market before making up your mind and committing yourself to a sale. You might want to schedule an appointment with a real estate agent who can guide you through recent pricing trends and demand by the buyers. This will help you proceed with the sale whether the resale time has come for you or not.

Legal Processes

There are legal procedures that need to be undergone for hassle-free resale of an off-plan property. You have to find an attorney who will make sure you get the proper contracts and review the terms in the sale. It is also quite nice to be aware of penalties that can be dished out by the developer for selling the property before it is completed. There are some clauses that the developers have that may restrict or penalize early resales, so you must be sure to go through such terms carefully before moving forward.

The buyer should also be informed of the risks involved in buying an off-plan property like construction delays, changes in design in the property, or even problems with the developers.

Conclusion

Being sold off plan before completion, off-plan sales can be termed as a good investment for Dubai investors especially if they utilize the best market conditions or are changing their investments. It includes strict legal, financial, and contractual requirements; someone has to wait for the required approvals, be cost-aware, and seek professional help in successfully completing the process without failure. Understand the off-plan property trends to gain the maximum return on your off-plan investment.