Sales Process and Agreements

Module 4: Sales Process & Agreements

Objectives

This module aims to introduce various sales models while highlighting important aspects of a typical sales process and sales agreements.

The following key terms are discussed:

Listing agreements and types of listings.
• Real estate sales process and cycle.• The 4 sales models:
Cash Buyer – Mortgage Free Property sales model.
• Cash Buyer – Mortgaged Property sales model.
•   Mortgaged Buyer – Mortgage Free Property sales model.
•   Mortgaged Buyer – Mortgaged Property sales model.
•   Steps & requirements for a property transfer.
•   Important general knowledge pertaining to POA, commission, escrow accounts, deposits and security cheques.

Sales Process
How does the real estate sales process proceed?

Typically, a starting point is when a real estate owner decides to sell.
He or she tries to get names of brokers who are experienced and successful in selling the given type of property.
The real estate owner interviews brokers, discusses the situation, and offers a listing to one or sometimes more than one broker.
The owner becomes a principal.
The broker is an agent of the principal.

What is a listing?
A listing is a contract between an owner and a broker authorizing the broker to find a buyer or a tenant who is willing to buy or lease the property under the terms of the listing.
Must a listing be in writing?
Must it have a fixed termination or expiration date?

What are the different types of listings?

Exclusive

Seller appoints ONE Broker to sell property and has to pay that Broker commission even if he ends up selling it himself or through another Broker.
If the listing is exclusive with one agent, the system won’t allow another listing agreement (contract A) to be created for the duration of the exclusivity period.

Open

Seller appoints more than one Broker to sell property and pays the commission to the Broker who ends up selling his property.

Effective October 1, 2022, RERA will allow a maximum of three form A’s per property. This means a maximum of 3 brokers can advertise for a property using property portals at any time.

Why would an owner give a broker an exclusive listing?
This type of listing guarantees the broker gets the commission if the property sells regardless of who sells it.

It gives the broker more incentive to sell, with less risk of wasted time and money.

With non-exclusive listings, a broker may be reluctant to spend time or money to advertise or show the property because another broker may sell the property and collect the commission.

THE AGENT WHO HAS VALID AND CURRENT “EXCLUSIVE” AGREEMENTS WITH SELLERS… WILL ATTRACT MORE SALES AS THE BUYERS AND THEIR AGENTS WILL KNOW, YOUR SELLERS ARE SERIOUS AND HAVE LISTENED TO YOUR ADVICE.

What is the listing price of real estate?

The listing price, as the name implies, is the price put on a property when it is listed or placed in the market.

This price is chosen by the seller, usually with advice from the broker.

It is the same as the asking price, that is, the price the seller hopes to get, it is generally considered a starting point for negotiations between the seller and a prospective buyer and consequently may be set artificially high.

What is the agreement between Seller and Broker? Contract A
LISTING AGENT: The Listing Agent does their homework (CMA) & research……
MEET: ……
THE SELLER: After completing Contract A on Dubai-REST App, a link to access Contract A is sent to the Seller. If approved by the Seller, the contract is considered valid and electronic signature is honoured.

Once Contract A is signed between Seller and Broker, the Broker can then advertise/market the property after applying for and receiving the advertising permit from RERA through Trakheesi or Dubai Brokers App.

Cancellation and extension of Contract A can be done through the “Dubai REST Application”

Pics

FOR SALE
You can then begin marketing the property

By-Law No. (85) of 2006, Chapter (4) Article (26) states The Brokerage contract shall be in writing and shall state the names of the contracting parties, specifications of the Real Property and the Brokerage conditions.

A FEW tips 1 …….
BROKERS SHOULD UPDATE THEIR OWN E-MAILS AND MOBILE NUMBERS IN TRAKHEESI SO THEY CAN MANAGE THEIR CLIENTS’ REQUESTS ON THE DUBAI-REST APP.

A FEW tips 2…….
MANAGING THE VOLUME OF LISTINGS IS UP TO YOU, THE LISTING BROKER. HOWEVER, DO NOT MISLEAD SELLERS, DO NOT MISLEAD BUYERS OR OTHER BROKERS. IF YOU CANNOT MANAGE THE LISTING EFFECTIVELY TO GET THE JOB DONE, DO NOT LIST THE PROPERTY.

HAVE THE INTEGRITY TO WALK AWAY!

Who is a qualified buyer?

He or she is someone,
• Of legal age (21 years or older)
• Mentally capable

who is in the market (that is, who is willing or seeking to buy), who gives some evidence of being financially able to buy a property within a specific price range.
The Real Estate Brokerage Contract between Broker and Buyer (Contract B) is accessible through the DUBAI REST APP under the DUBAI BROKERS.

What is the agreement between Buyer and Broker? Contract B.

Contract B is accessible through the Dubai-REST App:
•   Buyer sends the request “to buy” to Broker.
•   Broker fills out and completes contract B.
•   The link to approve contract B is sent to the Buyer by SMS or email (for international buyers).

A FEW tips …….
THE QUICKER YOU SECURE YOUR BUYER’S AGREEMENTS ON THE DUBAI-REST APP…. THE BETTER YOUR BUSINESS WILL BE.

BUYER WILL BE ABLE TO LIST WITH MANY AGENTS.

YOUR SUCCESS DEPENDS ON skills, communication, trust, & their confidence in YOU.

TAKE GOOD CARE OF YOUR ‘REAL’ BUYERS

Real Estate Sale Cycle

THE REAL ESTATE PROPERTY SALE CYCLE

We list the property (Contract 1 Contract A: Seller & Seller’s Agent)
2. We attract Buyers by marketing (Contract 2 Contract B: Buyer & Buyer’s Agent)
3. We qualify potential buyers (Contract 3 Contract F – Buyer & Seller)
4. Buyer make an offer to buy (Contract 3 Contract F)
5. Offer is accepted by the Seller
6. A contract exists on the property
7. Contract settles and the property is SOLD

The Buyer’s Broker has communicated the request for the Listing (Seller’s) Agent to prepare FORM F as an “offer”.

The Listing Broker logs into the Dubai-REST App, accesses contract B either by:

Scanning the bar code assigned to contract B.
• Entering the QR number assigned to contract B.
• Selecting contract B from his/her pending contracts.

If contract B is not available, the listing broker can add a buyer by:
•   Inserting buyer’s passport number.
•   Scanning buyer’s emirates ID.
•   Selecting the buyer’s ID number from the system, if he/she happens to be an existing owner in the system.

At NO TIME will the Listing Broker/Seller be able to see the Buyer’s or his broker’s details NOR The Buyer’s Broker/Buyer can see the Seller’s or his Listing broker’s details

UNTIL Contract F is signed and approved by BOTH PARTIES!
TRUST RULE APPLIES

Valid contracts A and B are mandatory in order for the Seller’s broker to initiate contract F.
• Upon approval of contract F by Buyer and Seller, “F” shall appear with most of the information required already inserted:
Property information will be fetched form Contract A.
Owners’ information will be fetched from Contract A.
Buyers’ information will be fetched from Contract B. However, buyers’ information will appear in Contract F only in case both contracts A & B are created by the same broker. Brokers information will be fetched from Contract B, in case both contracts are created by different brokers.
If property is rented, tenancy information will be fetched form contract A. Commission of broker A will be fetched from contract A.
Commission of broker B will be fetched from contract B.
Documents will be cloned from both contracts A & B with no ability to edit, delete or update. However, the broker who will create contract F should have the ability to attach any additional required documents within contract F.
Before final approval of contract F by sellers & Buyers, Sellers should not be able to view the buyer’s information & vice versa.
Broker B should not be able to view sellers’ information before final approval of contract F by sellers & Buyers.
Sellers & Buyers final approval of contract F should block the property.
Extra terms and conditions can be added to contract F as requested and formulated by the parties.
Contract F can be cancelled or extended subject to approval from both parties of the agreement.
Once contract F is signed by both parties, the property gets “flagged” in the system for the “duration of reservation” until the property:
Either gets transferred from seller to buyer and buyer gets his title deed/Oqood certificate OR
The transaction gets cancelled by the parties.

Sales Module

A. Cash Buyer – Mortgage Free Property

This is usually the fastest, easiest type of transaction
1- Buyer and Seller sign Form F:
– Buyer submits a Booking Deposit.
– Seller issues a Security Cheque against the booking deposit.

2- Seller applies for the NOC from Master Developer.

3- Buyer and Seller go to Registration Trustee to transfer the property Title Deed/Oqood.

If a property does not have a Title Deed:

Seller must apply and pay 4% of the original price of the property to issue the original Title Deed before the Title Deed can be transferred to the Buyer.

If a property is “off plan”; the Seller must register Oqood and pay 4% of selling price

before he can sell the property.

NOC from Developer Requirement for Sales Transactions

Still required for off-plan (pre-title) sales transactions.
For ready property (with a title deed) sales transactions
Varies from developer to developer
•   Varies from project to project from the same developer
•   Check with the Registration Trustee- Email the title deed along with contract F to RT office. The RT office through their systems can check on outstanding service charges attached to the property if any.
•   In such cases it is also recommended for the seller to print a service charge statement of account through Mollak to verify to the buyer that he is up to date on service charge payments.
•   For Mortgage buyers, the bank requires NOC from Developer in order for the transaction to be completed.
•   Some Buyers refuse to sign contract F without an NOC from Developer.
In such cases, Seller should apply for and get NOC from Developer in order to avoid losing the Buyer.

Cash Buyer – Mortgaged Property
Cash Buyer- Delayed Sale and/or Off Plan Property

When there is an existing mortgage/loan on the property, the outstanding loan amount must be settled prior to transfer of Title Deed to the Buyer.

Step1- Blocking of the Property.
This is done to secure the payments made by the Buyer when settling the mortgage of the Seller on a mortgaged property or when the Buyer settles the pending payments on delayed sale and/or off plan properties, to the developer on behalf of the Seller).

Required documents:

Liability letter from bank/developer (in Arabic) addressed to DLD. It should include the following:

– Details of the property as mentioned on the title deed.

– Outstanding balance of the Seller’s mortgage on a mortgaged property (from the bank) or outstanding balance of the Seller’s payments on delayed sale or off plan properties (from the developer).

– An undertaking statement from the bank to release the mortgage once the outstanding balance of the mortgage on the property is settled. This should be stated and included in the liability letter.

Liability Letter has a fixed validity period upon which time, the Buyer should be advised to be ready to settle the mortgage by the end of this validity period, which could range between 7 – 15 days.

The Bank may charge for early settlement of the loan, Seller pays for this as well, unless agreed differently between parties.

Form F signed by the Seller and Buyer.
• Updated copy of the title deed.
• No objection certificate (NOC) from developer (before submitting the cheques).
• Emirates ID (if Seller and Buyer are residents of the UAE/Original passport (if Seller and Buyer are not residents of the UAE).

The following Manager cheques issued by the Buyer distributed as follows:

A manager cheque payable to the bank to settle the outstanding mortgage.
• A manager cheque payable to the Seller for the remaining balance.
•   A manager cheque payable to Dubai Land Department for the transfer and registration fees split as follows (unless agreed otherwise):
•   Transfer fee for Seller = 2% + AED 20
•   Transfer Fee for Buyer = 2% + AED 20
•   PLUS, OTHER ADMIN FEEES (REFER TO SLIDE 71)

Plus, admin fees of (about AED 1000 +20) to DLD in order to reserve/block the property for 30 days.

RT Fees:

AED 4,000 for completed property, if the price of the property is AED 500,000 or more. If the property is off-plan, the fee is AED 5,000.
AED 2,000 if the price of the property is less than AED 500,000. If the property is off-plan, the fee is AED 3,500.

The Seller takes the check payable to the bank to release the mortgage and obtain the clearance/release letters. Both Seller and Buyer may be required to be present at the bank.

Step 2- Unblocking of the Property and Transfer of Ownership from Seller to Buyer.

Both Parties return to registration trustee/DLD to unblock the property to complete the sale and issue new title deed in the name of the Buyer.

Required Documents:

Original title deed.
• Mortgage release Letters from the bank to DLD, Developer and Seller.
• DLD Fees to release the mortgage (Fees may differ for Islamic banks).

**These fees are approximate figures only. Please check with RT offices and DLD website for exact fees applicable to every transaction.

Mortgaged Buyer – Mortgage Free Property

Buyer applies for financing.

– Recommend that Buyers have a pre-approval in place prior to looking at properties.

Buyer and Seller sign form F:

 Buyer submits a Booking Deposit.

 Seller issues a Security Cheque against the Booking Deposit.

The Buyer’s bank conducts valuation (appraisal) of property (at Buyer’s expense).
Buyer’s bank issues Final Offer Letter to Buyer.
The Seller applies for NOC from Master Developer (both parties attend).
After NOC is issued:
–   Buyer, Seller & Bank representative attend RT/DLD;
–   Title Deed is transferred to the Buyer’s bank;
–   Buyer’s bank holds the Title Deed of the property for the duration of the loan.
The mortgage must be registered against the property by the bank (at Buyer’s expense) by paying 0.25% of the mortgage value to DLD.

Note: Buyer’s Bank requires valid proof of ownership (Title Deed/Oqood) prior to valuation of the property.

Mortgages

Law No. 14 of 2008

Mortgagee must be a bank or financial institution duly authorized and registered with the UAE Central Bank for practicing property financing activities.
Mortgages must be registered at the DLD, otherwise not valid.
The Mortgagor (Borrower/Buyer) is responsible for paying registration fees, unless otherwise agreed.
The fee to register a Mortgage is .25% of the loan amount, payable to DLD.

UAE Central Bank Mortgage Regulations

UAE Nationals

– 85% LTV for Government Housing Programs <AED 5M

– 85% LTV for property values <AED 5M for first property

– 75% LTV for property values >AED 5M

– 65% LTV for all other mortgages, irrespective of property value – this is the case if you have more than one mortgage

– 50% LTV for all under construction properties same for expats and locals.

Distinction between owner-occupiers and investor loans

Expatriates

– 80% LTV for property values <AED 5M- on first mortgages
– 70% LTV for property values >AED 5M- on first mortgages
– 60% LTV for all other mortgages, irrespective of property value-for second mortgage and beyond
– 50% LTV for all under construction properties

Distinction between owner-occupiers and investor loans
•        Maximum term of 25 years
•        Final mortgage payment to be completed by:
–    Age 70 years for UAE Nationals
–    Age 65 years for employed Expatriates
–    Age 70 years for self-employed Expatriates
•        Minimum age of applicant must be 21

AE Central Bank Mortgage Regulations UPDATE

Effective February 1, 2025-As per UAE Central Bank, banks in the UAE can no longer offer financing against buying a real estate asset costs.

UAE Central bank sent a notification to all banks stating that the inclusion of fees and charges associated with purchasing a property as part of the mortgage facility should be discontinued.

Previously, buyers could borrow up to 80% of their buying costs and add it to their mortgage.

Now- The Property Purchase Price taken into consideration for the purpose of financing can not include any sort of fees/charges of the financing institution and/or any third party.

Example-For a buyer buying a property worth AED 3,000,000, the associated buying fees are:
DLD Registration Fees-4% of PV=AED 120,000
Brokerage Agency Fees-2% of PV=AED 60,000
Mortgage Registration Fees-0.25% of MV (AED 2,400,000)=AED 6,000

Total Associated Buying Fees=AED 186,000 plus other fees including but not limited to bank fees to process loan, valuation of property fees, Registration trustee fees, property insurance etc……

Given the above example, a buyer now has to budget for the AED 186,000++ (about 8%) in addition to the 20% of PV (AED 600,000) deposit in order to purchase a property worth AED 3,000,000 through a bank mortgage.

So, if your client was expecting additional funds (aside from the 80% LTV) from the bank to purchase a property, help them to re-assess their current financial situation and adjust their budgets.

Individuals can register mortgages: Through Real Estate Registration Trustees offices OR Through Bank (electronically)

Via the service center

Step 1: The customer goes to one of the Real Estate Registration Trustee offices

Step 2: The customer submits the required documents to the employee and makes sure that they are complete (All required documents are uploaded via DLD Document Vault)

Step 3: The transaction data is entered into the system by the employee and is verified Step 4: The customer pays the fees and receives a receipt for payment

Step 5: the output is delivered to the customer through email

Via the electronic system
Step 1: The customer prepares the mortgage requirements with the bank

Step 2: The bank employee enters all the required documents via the electronic mortgage system and the transaction is audited by the bank auditor (All required documents are uploaded via DLD Document Vault)

Step 3: The transaction is sent to DLD for verification and DLD’s fees are deducted from the bank account
Step 4: The output is delivered to the customer through email

Conventional vs. Islamic Financing (Deeds)

Conventional

Deed issued in name of Buyer/Borrower
● Original Deed in possession of Lender until mortgage paid off Islamic (Ijara)
● Deed issued in name of Lender; Borrower is listed as Tenant until paid off

MORTGAGED BUYER-MORTGAGED PROPERTY
Buyer and Seller sign Form F.
2. Buyer submits a Booking Deposit.
3.      Seller issues a Security Cheque against the Booking Deposit.
4.      Buyer’s bank conducts valuation of the property.
5.      Buyer’s Bank issues Final Offer Letter to Buyer.
6.      Seller applies for a Liability Letter from their bank (depends on each bank).
7.      Once the Liability Letter is issued, it is sent to the Buyer’s bank.
8.      Buyer’s bank will start the process of settling the existing mortgage.
9.      Once existing Mortgage has been settled, original Title Deed held by the Seller’s bank is released to the Buyer’s bank.
10.    Seller requests NOC from Developer (both parties attend).
11.    Seller submits a copy of the NOC to the Buyer’s bank. The bank will then prepare the final documentation for the transfer of the property.
12.    Buyer, Seller, the Buyer’s bank and the agent will meet at RT/DLD to transfer.
13.    Buyer’s bank will either issue a cheque for the remaining amount to the Seller or issue a Guarantee Letter for the same amount.
14.    The Mortgage must be registered against the property by bank (paid by Buyer).
15.    The Buyer’s contribution will be paid to the Seller through a Manager’s Cheque on the day of transfer (for most banks).
•        No two transactions are the same.
•        Broker must perform due diligence in order to protect yourself and your client. – Make sure you are well informed of all the required documents of your client, and each step of the process.
•        Do not expose your client, yourself and your company to risk.
•        Ask if you have any questions, never assume.

Important General Knowledge

DLD CUBE CENTER
What is Cube Center?
It is an integrated customer service center to provide exceptional services to real estate investors.

“Cube” was created to reduce the effort and time for real estate investors by providing all services in one location.
The required procedures can be completed at the DLD Cube Center by submitting applications for real estate investment residency, including medical test service, printing of Emirates ID applications, health insurance, and the services of the Federal Authority for Identity and Citizenship.
If the applicants meet the requirements for the Investor Residency Visa, there is no need for a middleman to submit their applications on their behalf; they can do it themselves. DLD Cube will not accept any third-party applications (PRO or person holding POA), and only the applicant will be allowed to access the DLD Cube Center.
Medical insurance is compulsory for all residence permits applications. The Cube can assist the applicants to complete their medical insurance registration for them and their families.
All applications are done online through the Cube Center.
Visit DLDCUBE.COM to get details and updates for all the requirements of Dubai Investor Residency Visa types.

Property Investor Golden Visa For Ten Years

What are the requirements for a 10-year Golden Visa in the UAE?

Applicant must be inside UAE.
Property in Dubai worth at least AED 2 million. Example- If property owner bought a property in cash for AED 2 million and that is what is stated on the title deed- he/she qualifies to apply for the Golden investor visa.
Title deeds owners can apply for Golden residence visa application if the market value exceeds 2 million (official evaluation certificate is mandatory).
Multiple properties will be accepted under the applicant’s name. This doesn’t apply if applicant owns properties in other Emirates.
EFFECTIVE JAN 2024- In case the property purchased through Developer or Bank mortgage, statement of account from developer or Bank NOC are required to proceed with the Residence visa application.
Husband and wife can participate in one property (marriage certificate is required attested from MOFA and legally

translated to Arabic). If husband and wife independently own properties they can’t combine them to meet the min AED 2 million requirements.

In case the property joint between Husband & Wife, and the value is less than 4 million, only one person will be eligible to apply for the golden visa then sponsor the other person (property share must be equal between both parties. In case the shares are not equal, highest share holder will only allow to apply as primary visa holder then sponsor other party (Spouse).
Title deed jointly between partner is acceptable (each applicant share should be minimum 2 million).
The applicant’s name in the title deed must be matching with the name in the passport.
Holders of a Dubai investor Visa may live and work in Dubai. MOHRE (Ministry of Human Resources and Emiratization) permission is required.
OLD RULE (Prior to Jan 2024): If the property is mortgaged or on an instalment plan with the developer, the bank or developer must be paid at least AED 1 million of the property’s worth and must provide an NOC. Example- If the property owner has a mortgage on the property and the value of the property on title deed is AED 2M , mortgage is only for AED 1M- Owner has to bring a certified mortgage statement from the bank and an NOC from that bank in order to apply for the visa. If the statement confirms that the owner has AED 1M in equity and AED 1M outstanding, then the owner qualifies to apply for the 10 years Golden Visa.

Benefits of a Ten Years Investor Visa in Dubai

Acquiring a 10-year investor Visa in Dubai offers several advantages:

Extended Stay outside the UAE: There is no limit on how long you can be outside the UAE to keep your Visa active.
• You can sponsor house maids and drivers.
•        You can sponsor your family for the same 10-year period.
•        The property owner visa holders (10 years ) can sponsor their dependents (boys & girls) for the same duration as the sponsor’s visa validity as long as they’re not married.
•        You can also sponsor your parents for a 10-year Visa.

Fees-

10 years property investor golden visa AED 9,884.75
• 10 years property Investor golden visa renewal AED 9,419.75
• 10 Years property investor golden visa cancelation AED 190.75

Five Years Retirement visa

What are the required documents needed for a Retirement Visa in the UAE?

Applicant must be inside UAE.
• Applicant age must be min. 55 years old.
•        Property value stated in the title deed must be at least AED 1 million (fully paid, not mortgaged) for one property or more under the applicant name. This doesn’t apply if you own properties in other Emirates.
•        In the event of a mortgaged property, a bank letter indicating AED 1 million has been paid and an NOC from that bank in order to apply for the visa.
•        Very clear passport copy (passport valid for more than 6 months).
•        Old Emirates ID (If applicable).
•        Husband and wife can share in one property (marriage certificate required).
•        Title deed jointly between partners is acceptable (applicant share should be minimum AED 1 million).
•        The applicant’s name in the title deed must be matching with the name in the passport.

Benefits of a Five Years Retirement Visa in Dubai

Acquiring a 5-year Retirement Visa in Dubai offers several advantages:

Visa may be automatically renewed after the first 5-year period is over, given that the retiree continues to meet the set criteria.
Extended Stay outside the UAE: There is no limit on how long you can be outside the UAE to keep your Visa active.
The retirement visa holders (5 years) can sponsor their dependents (boys & girls) for the same duration as the sponsor’s

visa validity as long as they’re not married.

Fees-
5 Year new Retirement visa AED 6,984.75
5 years retirement visa renewal AED 6,419.75 5 years retirement visa cancelation AED 190.75

Taskeen Two Years Investor Residency Visa

What are the required documents needed for a Two Years Investor Visa in the UAE?

The minimum property value is AED 750,000.
• In case the property is mortgaged, 50% of property value (at least AED 375,000) to be paid to the bank. NOC letter along with bank mortgage statement will be required to proceed with visa application.
Husband and wife can share in one property as long as the value of the property is AED 750,000 or more. (Attested marriage certificate by MOFA is required).
Can sponsor family under this visa provided investor meets the requirements for sponsorship.

Fees-

2 years new property investor visa AED10,212.50
2 years property investor visa renewal (2 years) AED 7,958.50 2 years property investor visa cancellation AED 938.50

Real Estate Investors cannot sell the property that is linked to their Residency Visa.
If the Investor intends to sell the property, his/her UAE Residency Visa will be cancelled along with the family under his/her sponsorship.
Grace period (check with DLD CUBE on duration) is given if selling with the intent to buy another property that meets

the requirements of the investor visa.

FAQ’s

What is the agreement between buyer and seller?
• What are the terms and conditions contained within this agreement?
•        Who design the terms and conditions?
•        Can those terms and conditions be changed?
•        How long should the transaction take to be completed? Is that fixed?
•        Can it be extended?
•        What will be the case if either of the contracting parties back off?
•        What is a role of the broker in all the above?

What is a contract? Is it legally binding?

It is an agreement between legally competent parties in which one party agrees to do something (or not to do something) in return for consideration (payment) from the other contracting party.

What is a breach of contract?
What are the consequences?

What is the classification of a contract that binds one party but not the other?

1-      Legal
2-      Executed
3-     Voidable

What is an addendum to a contract?

An addendum (plural: addenda) is something that is added as an attachment.

What is an amendment to a contract?

It is a change, correction, or extension of an agreement that does not change the basic thrust of the agreement.

Who can be considered a party in a contract?
1-Seller
2-      Buyer
3-      Broker
4-      All of the above

What is a power of attorney (POA)?

Power of Attorney (POA) – A legal appointment from one person (Grantor) to another (Grantee) to act on Grantor’s behalf in his/her absence. The Grantee has authority to make decisions and sign legal documents on behalf of Grantor.

How is it legalized?

All POA’s need to be notarised and properly attested:

If issued in Dubai, it must be notarized by the Notary Public.
• If issued abroad, it must be legalized through the UAE Embassy in that country, then

the Ministry of Foreign Affairs.

The POA must be in Arabic. If there is an English translation, it must be stamped by a licensed legal translator.
For real estate purposes, Dubai Courts and DLD will only accept POA’s that are specific to the subject property and limited in duration to 2 years.
POA can be done virtually online.

Can a broker accept a Power of Attorney?
NO, a Broker may NOT accept a POA in any real estate transaction.

What is flipping a real estate property?

Who are speculators?

Flippers and speculators are buyers/investors who purchase real estate for the sole purpose of making quick return and realizing an immediate gain.

What is escrow?

Escrow is an agreement between two or more parties providing that certain money, instruments or property be placed with a third party (bank) for safekeeping pending the fulfillment or performance of a specific act or condition.

Who controls the developer’s escrow account?

DLD controls the developer’s escrow account. Money/funds are released from the escrow account based on the certified progress of the Project.

What is developer’s escrow account?

The escrow account is required for each project under construction or off-plan to be opened by the developer after he gets the approval from RERA to construct the project. Monies received from investors/buyers are deposited into the escrow account.

In whose name should the escrow account be?
Escrow account is opened under the project name for each and every project.

What is a down payment or a deposit cheque?
A down payment or deposit is the cheque that the buyer issues in order to reserve a property. According to the “market norm”, it is usually 10% of the selling price, but it will always depend on price of the real estate property to be reserved.

Can it be in cash? No, it should be payable in the form of a cheque.

If in cheque, in whose name? The cheque should be in the name of the Seller.

When does the seller receive the down payment?

The deposit (down payment) cheque is held by the brokerage company until the transfer date. At transfer, and based on the agreement between the buyer and seller, the deposit cheque is either returned to the buyer whereby the seller would expect the total amount due to him in the form of a manager’s cheque or the seller would accept the deposit cheque and as such would only expect the balance to be paid in the form of a manager’s cheque.

What is a security cheque, in whose name is it issued?
A security cheque is the cheque issued by the seller in the name of the buyer as a security for the buyer in case the seller defaults on the agreement. This is also held by the brokerage company.

Who gets the cheque if the deal go through, and it the deal does not materialize?

If the deal goes through, the brokerage company returns the security cheque to the seller. However, if he defaults on the agreement and both parties had agreed on these terms, then the security cheque is handed over to the buyer due to the seller’s default. It is crucial that defaulting clauses are drafted clearly under contract F so each party knows its rights and obligations.

Tip: Make sure to get DLD involved prior to handing over any cheques in case of default by either party.

What is a distress sale?

It is a sale of real estate where the seller is under compulsion, or forced to sell.

What is a commission?
It is the fee earned from a real estate transaction, usually a percentage of the selling price.

Must a person be licensed broker to collect a commission from a real estate transaction? Or any person who mediates in the deal?

How much should the commission be for a sale’s transaction?

How much is the commission for a lease?

Who pays the commission? Seller, buyer, landlord or tenant?
When does a broker earn a commission?

When does the broker collect the commission cheque?

When does the broker cash the commission earned?

Can commission be paid in cash?

In whose name should the commission cheque be?

Can a broker represent both a buyer and a seller?

Can a broker represent both landlord and tenant?

What will be the commission in this case?

Who will pay the commission?

What is the difference between real estate (real property) and personal property?

Real estate or real property is everything more or less permanently affixed to land.
Personal property is everything else.

Mention the main differences between both real and personal properties:

Unique (No Similarity)
Long lived
Immobile
Transfer fee to be paid every time a sale of real property takes place

How much is the transfer fee?
4% of the Selling Price (as per market price).

Who pays the transfer fees?
By law – 2% & Buyer 2% Seller unless agreed upon otherwise.

To whom is it paid?
Transfer fees are paid by manager’s cheque to DLD at RT’s office or DLD.

Can cash be accepted?
No, only by Manager’s Check, Noqodi or credit card.

What is needed to prove the ownership of a real estate property?

Title deed for finished properties
2. Oqood for off-plan properties.

Can a broker initiate a contract between seller and buyer without the existence of a proof of ownership?
Absolutely NOT! A broker must exercise due diligence.

Can a mortgaged property be transferred at the RT/DLD?
The Seller’s mortgage would need to be settled first BEFORE the transfer of the property can be done from the Seller to the Buyer.

NO TRANSACTIONS ARE PERMITTED UNLESS THE PROEPRTY HAS EITHER

THE TITLE DEED ISSUED or
B. THE PROPERTY IS REGISTERED ON THE INTERIM REGISTER.

ALL REGISTRERED BROKERS AND AGENTS ARE REQUIRED TO KEEP THEMSELVES UPDATED, RERA WILL NOT CALL OR RING over 7,000 AGENTS IN THE MARKET TO UPDATE THEM WITH EVERY CHANGE!

Who should be present in person at the transfer:

BUYER or registered POA
SELLER or registered POA
BUYER’S AGENT
SELLER’S AGENT
BUYER’S BANK
SELLER’S BANK (May not be applicable)