Most Common Home Buying Mistakes to Avoid in the UAE

Imagine a joyous evening in the cozy living room of your brand new home in the UAE, surrounded by your beloved family members and friends to celebrate the milestone of purchasing this beautiful residence. Sounds phenomenal, doesn’t it? You can also live this dream, but to achieve this biggest milestone of your life, you need to work strategically and avoid common home buying mistakes. After all, this is one of the most significant decisions of your life and it requires a lot of planning and consideration. We have seen a lot of people who are so impatient that they overlook various important aspects while deciding to buy a brand new home in the UAE and eventually face the consequences. This is the reason we decided to write this blog to highlight the most common mistakes when buying a home in the UAE. Let’s see what they are.

Common Home Buying Mistakes to Avoid in the UAE

1. No Proper Budget Planning

Who doesn't plan their budget while buying a home? I know this is the first question that came to your mind. However, many people just consider the present cost they need to pay while purchasing the house and completely ignore future elements as well as additional costs involved. This is one of the most common mistakes when buying a home. For example, if you are planning to buy an off-plan property with a 2-year plan, along with the down payment amount, you must calculate the amount you will be paying for the next two years. Do you have sufficient funds? Or do you have enough income sources that will help you pay the during-construction and on-handover amounts? If you are going to rely on your salary or business income and if something goes wrong, do you have any plan B? It is important to consider all these points before making any decision. This is the biggest mistake to avoid while buying a home in the UAE. The failure to do so can lead you to face issues in arranging money in the future. 

2. Ignoring the Additional Costs

Let’s assume you have made all the calculations about managing your finances, but that’s not all. Though the amount you will pay against downpayment and during construction is the biggest chunk of the entire cost, there are other costs to be considered as well. 

Did you research the additional costs you will need to pay, such as the DLD fee, Trustee registration fee, DEWA charges, etc.? Ignoring these costs is one of the most common home buying mistakes. This can be easily overlooked by many people but in the long run and can create chaos for you. Therefore, it is better to conduct proper market research and then make a feasibility plan along with alternatives.

3. Insufficient Knowledge of Mortgage

Many people, when they decide to buy a property in the UAE, plan to mortgage it. While it’s a good idea, it only works if you have enough knowledge about mortgage financing. Many times, people rely on things they hear from others instead of researching themselves. This is another common mistake to avoid while buying a home in the UAE. We have seen many people who get excited about buying an off-plan property thinking that they will finance it from a bank. However, they have no idea that there are different rules for mortgaging a ready property and an off-plan property. If we talk about Dubai, there is a very limited number of banks that provide a loan for an off-plan home, that too for projects by renowned developers only. Moreover, the maximum LTV is 50% of the property value, when the construction is complete. That means you can only be eligible for mortgaging your property if a) you have sufficient funds to pay the first 50% or more amount and b) you are buying from one of the developers approved by the bank. Simply put, to avoid any issues in the future, you should gather enough knowledge about the banks that provide a loan against an off-plan property and the approved developers. It is also advisable to talk to the bank’s representative and acquire authentic information instead of relying on online information only.  

4. Ignoring Long-Term Factors

It is truly an amazing feeling to finally be able to buy a home in the UAE. Let’s suppose you have planned your budget and you found a property at the best possible price as well. The developer also has a good reputation. However, you ignored to consider some important future elements. After you have paid the downpayment and a couple of installments, you remember that your workplace or your child’s school is in another corner of the city. Even if the distance is not a lot, traffic is quite congested on that route during rush hours. These factors may not look really important initially, but once the project is complete and you move to your new house, you might have to face multiple issues. Similarly, many people invest without researching the approximate resale value and potential capital gains they can expect to yield in the long run. Therefore, it is wise to be patient and avoid this mistake while buying a home in the UAE. You may crave instant gratification while making a decision, but instead of giving in to your emotions, you should stay logical and take ample time before finalizing the deal.    

5. Lack of Research about Developers

The real estate market in the UAE is undoubtedly thriving. And with the myriad of projects available in the market, buyers are certainly spoiled for choice. However, not all options are reliable. Many times, people get so fascinated by the property advertised that they ignore the need to search for the developer’s authenticity and reputation – yet another common home buying mistake to avoid. As a result, their money may get stuck or they have to face delays in project delivery. Therefore, it is indispensable to check for the developer’s authenticity while you are searching for your future home. Check the number of projects they have completed in the past and their track record for timely delivery with all the promised features. Look for the reviews and ratings by customers. Moreover, check if the developer is registered with DLD and has a valid RERA license.    

Final Words

Buying a brand new home is a big decision that requires careful consideration. Therefore, it is essential to approach it thoughtfully rather than impulsively. Taking the time to assess various factors such as the ones described above ensures that you avoid common home buying mistakes while the decision aligns with your long-term goals and secures a stable foundation for the next chapter of your life.