Contracts
Contract A
The Quality Listing
- Always visit the property.
- Take photos of the interior and exterior (professional if possible).
- Description: Avoid generic terms. Be specific about the property itself highlighting special features.
- Include a floor plan and/or room sizes.
Writing a Quality Description
- Avoid copying and duplication.
- Avoid spelling mistakes.
- Avoid industry jargon and special characters.
- Refer to landmarks.
- Think like a buyer.
- Ex: Walking distance, waterfront with exceptional views, child friendly neighborhood, low maintenance cost.
Role Play 2: Buyer
Mr. Ivan, a Russian businessman calls you. He has recently moved to Dubai and wants to purchase a property.
What do you need to know?
New Buyer
- Qualify: Find out his DNA, Desire Need Authority
- Put buyer into action:
– Approving contract B.
– Book viewing.
- Get Buyer to put an offer.
Calls + viewing + Offer= Sale
Qualifying a New Buyer
- Passport copy for age (21) and nationality.
- Purpose: investment or personal use.
- Currently rents or owns.
- Time scale.
- Family members, children.
- Location, proximity, work location.
- Type, size, no of rooms, maid’s qtr, facilities.
- Budget and cash or finance
………and many other things
Re-qualifying old Clients
Things that may have changed:
- Pre-approval came through.
- Has seen a different property or style.
- Has just offered= hottest buyer.
- Has just sold= “Panic buy” mode.
- Has just bought (with someone else).
- Rent expiring soon.
- Unforeseen circumstances.
Q’s to ask old buyer
- Are you still looking in your area of choice?
- Have you seen anything you like recently?
- Have you made any offers on any units?
Recognizing a Hot Buyer
- Buyer calls in for a specific unit type-knows what he wants.
- Discuss furniture layout during a viewing.
- Ask what price the seller might accept.
- Ask about the seller’s motivation to sell.
- Asks about fees and extra costs.
- Gives positive words: nice view, love the kitchen…etc.
- Chases you and returns your call.
- Asks what the next step is?
What to offer a buyer
- Start with your inventory and those of your office.
- Use search engines.
- Limit the search per request and budget.
- Avoid too much choice.
Contract B
Viewings
- Have a copy of the listing.
- Ensure the property is presentable.
- Know all details about it.
- Respect the culture of the seller.
- Show all parts including parking, locker, gym…
- Return everything the way it was.
Contract F
Case Study 1 Solution – Part1
Calculation of Service Charges to be reimbursed to the Seller by the Buyer.
Service charge per day: AED14,047/365=AED 38.48/day
1st March 2018 to 3rd September 2018=187 days
AED 38.48/day*187 days= AED 7,195.76 utilized through the selling date.
Balance charges until 28/2/2019 for 178 days= AED 14,047-AED 7,195.76= AED 6,851.24 which is the amount that Mrs. Jane needs to reimburse Mr. Doe.
Case Study 1 Solution – Part2
Calculation of rental amount that needs to be reimbursed to the Buyer by the Seller.
Solution:
Rent per day: AED 200,000/365= AED 547.95
Rent from 11/7/2018 to 10/8/2018( 31 days)= AED 16,986.45 Rent from 11/08/2018 to 03/09/2018 (24 days)=AED 13,150.80 Sub total: 55 days * 547.95/day=30,137.25
Balance from 1st cheque is AED 100,000-30,137.25=AED 69,862.75
Amount to be reimbursed to Mrs. Jane by Mr. Doe = AED 69,862.75+AED 10,000
deposit= AED 79, 862.75
Case Study 1 Solution – Part3
Calculation of total adjustments due on Transfer date
Deposit: AED 2,690,880* 0.10= AED 269,088
To be paid by Mrs. Jane in favor of Mr. Doe to be held by the brokerage company until the date of transfer. On date of the transfer the deposit cheque will be returned to Mrs. Jane.
Calculation of Transfer Fees: AED 2,690,880* 0.04= 107,635.20 plus AED 540 admin fees
To be paid by Mrs. Jane in manager’s cheque to DLD.
Calculation of Commission: AED 2,690,880 * 0.02= AED 53,817.60
To be paid by Mrs. Jane in manager’s cheque to the brokerage company on transfer date.
Total to be received by Mr. Doe on Transfer date
AED 2,690,880 (Selling Price) + 6,851.24 ( service charges)-79,862.75 ( rent owed to Mrs. Jane)=AED2,617,868.50.
Total to be paid by Mr. Doe to developer: AED 500 Total to be paid by Mrs. Jane to DLD: AED 108,175.20
Total to be paid by Mrs. Jane to brokerage company: AED 53,817.60
CMA Exercise Solution
Unit 1 apt 120 2 2 1 1 yes yes 1700000
Unit 2 villa 190 4 4 2 yes yes pool 3350000 3410000
Unit 3 villa 194 3 4 2 yes yes pool 3200000 3360000
Unit 4 villa 185 4 5 3 yes yes park 3500000 3460000
Unit 5 apt 200 5 5 3 2 yes yes water 3950000
Unit 6 villa 210 4 5 2 yes yes 3400000 3480000
Unit 7 villa 192 4 4 2 no yes 3150000 3380000
Unit 8 apt 185 3 4 1 1 yes yes water 3450000
Unit 9 villa 220 4 5 2 yes yes 3200000 3280000
unit 10 villa 300 6 7 4 private yes lake 4900000
Unit 11 villa 140 2 3 2 yes yes 1630000
Total 20370000
Average 3395000
Suggested listing 3.3-3.5m
- Assumed added values:
–Bedroom:100000 Pool: AED90000
–Bathroom: AED 60000 Gym: AED 35000
–Garage: AED 40000 Pool/park view 80000
–Locker: AED 20000 water/lake view 100000
key variance
YIELD Calculation Example
You are managing an apartment of 2,000 sq.ft. You have determined that you can achieve rental receipts of AED 240,000 per annum if the occupancy rate is 100%, however you predict the apartment being vacant for 1 month of the year to allow you to carry out some important Maintenance which will cost AED 10,000.
You will also pay Service Charges of 10 AED per sq.ft. and
you expect Marketing and Leasing costs will amount to AED 10,000.
The owner paid AED 3,000,000 for the apartment. What will be his estimated Net Yield for the year?
Solution
240,000/12=20,000 monthly rent
NET ROI=(240,000-20,000-10,000-20,000-10,000)/3,000,000=6%
Broker A, B,C has participated in selling land of an area 100m X 70m with commission ratio 5 to 3 to 2 respectively, if the property is sold for AED 5,000 per square meter and the brokerage commission is 4%, what would be the commission of broker A in AED?
Solution
100*70*5,000=35,000,000*4%=(1,400,000/10) *5=700,000, in other words he gets half
- 42,0000
- 28,0000
- 700,000 correct answer
- 140,000
Broker A, B,C has participated in selling land of an area 100m X 70m with commission ratio 50/30/20 percent respectively, if the property is sold for AED 5,000 per square meter and the brokerage commission is 4%, what would be the commission of broker C less than commission of broker B in AED?
Solution
Commission is 1,400,000/10 shares=140,000*2 shares for C=280,000 for broker C and 140,000*3 shares for B=420,000 for broker B ; 420,000-280,000=140,000
- 700,000
- 280,000
- 420,000
- 140,000 correct
What is the property value of a villa if Dubai Land Department property registration fee is AED 40,000?
- AED 2,000,000
- AEd 1,600
- AED 1,000,000 correct answer
- AED 16,000
The management of a shopping mall charge mobile store owners an annual rent of AED 100 per square foot of storage area in addition to 4.5% of the gross business sales in excess of AED 400,000. If the dimensions of the store are 60′ x 120′ and the owner sells AED 2,000,000 worth of goods during the year, what is the total rent amount in AED for 3 years considering same sales amount is achieved?
Solution
Annual Rent=(60*120*100/sqf)=720,000
+(2,000,000-400,000 *4.5%)= 72,000
Total Rent=(720,000)+ (72,000)*3years
- AED 2,376,000 correct answer
- AED 2,430,000
- AED 2,214,000
- AED 231,000
Owner accepts to pay a 5% commission as long as he nets AED 1,000,000 on the sale of his house. What would be the minimum listing price in AED?
Solution
1,000,000/0.95=1,052,632 correct answer is d
- AED 1,050,000
- AED 1,036,000
- AED 1,040,400
- AED 1,052,632 correct answer
Best wishes for a successful real estate career!