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The A-Z of Real Estate: terms you need to know when buying a home

Real estate terms come at us fast in the home buying journey and tend to have us asking more questions than when we started. But that doesn’t have to be the case.

Un hombre sentado en un sofá y revisando el papeleo, lo más probable es que obtenga la provisión de fondos en una hipoteca organizada

Do you know what is an Oqood? Or a Form F? You should feel confident when talking to a real estate agent or a developer; that’s why we’ve taken the most common UAE real estate terms and made them easy to understand.

A real estate glossary that’s easy to understand

Amortization is the process of gradually paying off a mortgage loan.

Building Completion Certificate (BCC) is the document given by the contractor to the developer confirming that the building has been completed to the specifications provided by the developer.

Credit Score is a number that predicts how likely you are to make repayments on a credit card or loan. Your credit score can range from 300 to 900. The higher the score, the less risky you are to lend to.

Developer is a company, firm, or person that buys land in order to build properties to sell.

Down payment is the upfront fee you pay as a deposit for your property. It’s a percentage of the property amount.

Dubai Land Department (DLD) is the regulatory authority for property ownership in Dubai.

Equity is the difference between the amount owed on the property compared to the market value of the property.

Form F is an agreement that has to be signed by the buyer and seller when purchasing a property. This is an electronic version of a Memorandum of Understanding.

Final handover notice is a letter or email from the developer advising the property buyer that the unit is complete and ready. It will also mention that the final payments are due for settlement.

Final offer letter (FOL) is a letter, completed post-valuation, stating the amount the bank will lend you, tenor, rates, life insurance, property insurance, and all the relevant information about your transaction.

Liability letter is a document that a property seller needs to request from a bank in case the property he is selling is currently mortgaged.

Market value is the amount a property would be sold for on the open market. However, the market value may not align with the purchase price as it is linked to valuations.

Memorandum of Understanding (MOU) is an agreement signed between the buyer and seller during a property purchase. This is formalized in Form F.

Mortgage is a loan from a bank in order to purchase a property. That property is then used as collateral for the money that is being borrowed. Monthly payments are made to the bank, including the added interest rate for a set number of years, depending on the mortgage you choose, until the debt is paid off in full.

No Objection Certificate (NOC) is a document issued by the developer when selling a property. It is issued by the Dubai Land Department and is usually valid for 30 days from issuance.

Off-plan is a property sold directly from the developer. These properties are not constructed when purchased.

Oqood, also known as pre-title, is the DLD property ownership document given to someone who owns a property that is not yet complete or handed over.

Power of Attorney (POA) is someone that can legally act on behalf of another party. This document must have been stamped by the Dubai Courts within the last 2 years to be valid for sellers and within 5 years to be valid for buyers.

Pre-approval is a mortgage pre-approval is a document from a lender stating the loan amount they are willing to give to a borrower. While it does not guarantee a mortgage loan, it is an essential first step to buying a home.

Property insurance is mandatory in the UAE when purchasing a property. Most banks will provide property insurance as part of their mortgage offer. The cost of property insurance is based on the percentage of the property value.

Property valuation is completed by a third party in order to be neutral. The purpose is to guarantee to the bank that the property is worth the amount you are asking for, reducing the risk for the bank while also providing you with the market value of the property you are buying.

Real Estate Regulatory Agency (RERA) is the regulatory body for licensing Real Estate Agents in Dubai.

Sales and Purchase Agreement (SPA) is usually used to refer to the agreement signed between a developer and buyer when purchasing directly from a developer."


Written by Huspy Team

Published on 3 November 2022

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