Guide to selling your property

Be aware of the timeframe

The entire process will take about six weeks, says Jean-Luc Desbois, managing director of Dubai-based mortgage broker Home Matters. The procedure is more or less the same whether the purchaser is a cash buyer or is mortgage funded, he says.

Choose the right agent

This is the first step and one of the most important. Be very careful when choosing a real estate agent because there are many illegal, unregistered ‘agents' in the market trying to make a quick buck. Jean-Luc advises sellers to exercise caution when selecting an agent.

"Sellers need to make sure the real estate company or representative they are engaging to sell the property is licensed and has a Rera (Real Estate Regulatory Agency) card because these people are accountable to Rera. One thing I would definitely not do is advertise my property with a freelance real estate agent because they are illegally operating in the market."

Have your papers ready

Once the real estate agent finds a buyer and both parties (buyer and seller) agree to go ahead with the deal, the seller needs to ensure all the necessary documentation is in place. Jean-Luc says the documents that need to be produced by the seller include the purchase sales agreement (confirmation from the developer that the seller has paid off the property price completely), the title deed, floor plans and a location map.

Sign an MOU

This is the first step in the actual selling process. "The seller needs to sign an MOU (memorandum of understanding) with the buyer through a real estate agent. Once the MOU has been signed, the bank that is financing the buyer will conduct an independent evaluation of the property. So it's your responsibility as the owner to provide access to the property so that the bank can conduct this evaluation, which is basically to determine how much the bank will lend the buyer," says Jean-Luc.

Pay off the seller's mortgage

This is again an important step and involves both the parties and their respective mortgage providers.

"Once the evaluation is completed by the buyer's bank, it will then formulate the final offer letter for the buyer and that's when the process of paying off the seller's mortgage begins," says Jean-Luc.

"Sellers will be asked by the agent to produce a liability letter from the bank they have the mortgage on their property with." He says that you shouldn't order the liability letter too soon from the bank because all liability letters have a 15-day validity period and banks will charge you for each of these letters. You don't want to order the letter too soon and you don't want to order too many - it's an unnecessary cost.

"Once you provide the liability letter the buyer's bank will then arrange to pay off the seller's mortgage," says Jean-Luc. "Depending on the loan-to-value (LTV) ratio the buyer may have to contribute themselves."

Generally the buyer's bank will pay off the seller's mortgage based on the liability letter provided to them. At this stage, the seller may have to sign some documents but he/she will be advised by the buyer's bank or the mortgage consultant whether this is necessary.

"The documents the seller may be asked to sign are the authority for his/her bank to accept the settlement of the loan and instruction to the bank to release the documents regarding the property once the mortgage is settled.

"The buyer's bank will pay off the mortgage and then the seller's bank will issue the clearance documentation. This happens five days after the loan has been cleared," says Jean-Luc.

Get an NOC

Once the seller's mortgage has been paid off, he or she must then go to the developer's office accompanied by the buyer and the real estate agent to get a no objection certificate (NOC). Sellers need to produce their identification and property documents in order to apply for an NOC.

"Developers generally charge for an NOC and that is due to the seller, not the buyer," explains Jean-Luc. "It is only a minimal amount ranging from Dh500 to Dh5,000. The NOC is issued in five to seven working days."

Transfer of ownership

The next step is to submit a copy of the NOC to the buyer's bank. The bank will then take about two to three days to prepare the final documentation for the transfer of the property.

"Once the property is ready for transfer then the buyer, the seller, the buyer's bank, the real estate agent and the mortgage consultant will all meet at the developer's office (if it's a property under construction) or at the Dubai Land Department to initiate the transfer. For this process, the seller needs to produce his passport," explains Jean-Luc.

"Sellers go to the transfer process expecting to be paid a cheque by the buyer's bank, but are sometimes disappointed because not all banks issue cheques on the day of transfer. Usually banks issue a guarantee letter to the seller stating: ‘We will pay you the remaining amount once the transfer has been fully completed'. Banks issue the guarantee letter to enable the developer or the Land Department to complete the transfer of ownership of the property into the buyer's name or the buyer's bank's name.

"That process itself will take about one week. If the buyer's bank issues a guarantee letter, then the seller will receive the cheque for any additional payment a week later. The buyer's contribution will be paid to the seller through a manager's cheque on the day of transfer." Then, presumably, it's time to start looking for your new home.