Why property buyers pay up to 7% extra of total value?

Dubai is experiencing a surge of new communities. — File photo

By Mohammed Laith Kalomar/Realty Bytes

Published: Tue 14 Mar 2023, 3:11 PM

Last updated: Tue 14 Mar 2023, 3:12 PM

What are the hidden costs if I buy a property?

There are several costs that clients are required to pay apart from the purchasing price, we wouldn’t call hidden costs, as these are discussed during the process of buying the property. However, they can be looked over or forgotten about. Usually, these fees can be around seven per cent of the total property value.

Some of these are but are not limited to:

• Two per cent plus VAT agency fee

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• Four per cent DLD fee

• Transfer Fee

• Conveyancing Fee

• NOC Fee — usually paid by the seller

• Tenant compensation for early vacate

• Finance buyers may have fees also

• Bank processing fee — average 0.5-0.7 per cent of the loan amount

• Valuation fee - average of Dh3,000 plus VAT

• Two insurances to be paid - Property insurance arranged by the bank (annual fee usually average of 0.04 per cent of property value) and life insurance (average 0.018 per cent paid monthly of the mortgage amount)

I have seen a 10-year-old flat in Dubai's Karama. I like the interiors, the price is okay but I am unsure if I should I buy a new flat instead in a new locality? Please advise.

When considering investing in a property, it's important to assess how it fits with your lifestyle, work, and personal preferences. Are you someone who prioritises space and amenities, or are you willing to sacrifice some space for a more modern finish in a newer building?

As you're buying a property to live in, it's essential to prioritise personal reasons over financial ones. Of course, you want to ensure that you're paying a fair price for your property, but your enjoyment and satisfaction should be the primary focus. You should love the location and ensure that it caters to your needs to make the most out of your investment.

While Dubai is experiencing a surge of new communities, many are still under construction, which means you'll have to deal with noise, a lack of facilities, and travel to established areas for necessities.

When it comes to property values, location is crucial. An older tower in Downtown might be more expensive than a newer one in Marina, but that doesn't mean it's better for you. Additionally, the reputation and presence of the developer can affect the value of the property.

Before making any decisions, ask yourself these questions and evaluate how the property fits with your lifestyle, preferences, and budget.

Mohammed Laith Kalomar is Betterhomes sales consultant. Views expressed are his own and do not reflect the newspaper's policy.