Buying Dubai Property as Non-Resident - 1.5% Escrow Agent Fee

[Luxxxtino]

Hi all,

I am looking to buy a property in Dubai for around AED 2.5m (no mortgage) on the secondary market to get the golden investor visa.

My money is currently in USD and I'm being told that I will need to pay an "Escrow Agent" 1.5% of the price as a payment intermediary for the purchase since the money needs to come from a UAE bank account (which I, of course, cannot have until I have residency - chicken and egg!).

I was wondering if anyone else has been through this and whether there are any alternatives to what will be a AED 37.5k fee in this case? I was almost thinking it'd be cheaper to get a visa and therefore UAE bank account by starting up a FZCO in order to avoid having to pay this fee.

Would appreciate your thoughts - thanks!

 

[Mercury]

When buying a property you own an asset that may increase in value with the time and/or generate income. Even deducting all fees, at some point, you may get back your initial+fees investment plus some extra profit.
Downsides: locked capital that could yield more invested otherwise. Asset may lose in value.

Direct service and corporate fees are money forever gone.

 

[CyprusLawyer101]

First of all , ask for a discount, propose 50% at first, see where it gets you; if it does not work proceed to other options.

 

[MiddleEuroAsia]

Hi all,

I am looking to buy a property in Dubai for around AED 2.5m (no mortgage) on the secondary market to get the golden investor visa.

Hello, Good for you, I'm also considering getting the GV later this year, but I well get it through other means as I'm already well-established in the UAE.

My money is currently in USD and I'm being told that I will need to pay an "Escrow Agent" 1.5% of the price as a payment intermediary for the purchase since the money needs to come from a UAE bank account (which I, of course, cannot have until I have residency - chicken and egg!).

that is not too bad considering that most Agents charges 2% ( and they may also charge VAT), and believe me when I say that I've seen my fair share of people who are new to the UAE and are being charged notorious fees frequently.

and you know that there is a mandatory 4% DLD fee that you have to pay when buying a property in Dubai, right?. so, you need to account for any expected or unexpected fees, and it's essential to have a clear understanding of all the fees you'll be paying before making the purchase.

Btw, why are you not buying directly from owners?, it's definitely worth considering as you can negotiate the price with the owner directly, and you'll only have to pay the DLD fees. but keep in mind that you'll need to do your due diligence to ensure that the property is free of any legal or financial issues, because dealing with owners in the UAE can sometimes be a pain in the a*s, so you need to be cautious.

I was wondering if anyone else has been through this and whether there are any alternatives to what will be a AED 37.5k fee in this case? I was almost thinking it'd be cheaper to get a visa and therefore UAE bank account by starting up a FZCO in order to avoid having to pay this fee.

Would appreciate your thoughts - thanks!

Don't. setting up a company solely for the purpose of holding one property, it's not worth it.

In my opinion, it's better to pay the agent fee and get it over with. However, if you plan on purchasing multiple properties in the future, having a holding company in the UAE can be a good idea. There are also other great alternatives, but you do you.

Good luck!

 

[Konstanz]

I think Dubai properties are not good investment. All properties quality is terrible.
Just look at listings. Many new buildings look old already. Very cheaply built. They just look nice in visualization.
Also remind it's sharia law country.

 

[turtle]

My money is currently in USD and I'm being told that I will need to pay an "Escrow Agent" 1.5% of the price as a payment intermediary for the purchase since the money needs to come from a UAE bank account (which I, of course, cannot have until I have residency - chicken and egg!).

They are trying to rip you off. There is no such thing as "Escrow Agent" and you can open a bank account before your residency. Fly to Dubai as a tourist and approach to ENBD, ADCB or Mashreq. They can open a non-resident account for you but you need to apply their priority/gold segment which requires a minimum 500K AED deposit. You can convert your non-resident account to a resident account once you get GV.

that is not too bad considering that most Agents charges 2% ( and they may also charge VAT), and believe me when I say that I've seen my fair share of people who are new to the UAE and are being charged notorious fees frequently.

It is another fee on top of the 2% commission.

I think Dubai properties are not good investment. All properties quality is terrible.
Just look at listings. Many new buildings look old already. Very cheaply built. They just look nice in visualization.
Also remind it's sharia law country.

It depends on where you buy from. If you're going to buy a cheap supply from Damac then expect bad quality but if you buy from Meraas you will get a nice unit.

 

[Konstanz]

I lived in Marina Gate. Buildings are new and already seems like 15+years old.
You just cant compare quality in Europe and Dubai. Everything just seems nice only on paper in Dubai

 

[turtle]

I lived in Marina Gate. Buildings are new and already seems like 15+years old.
You just cant compare quality in Europe and Dubai. Everything just seems nice only on paper in Dubai

I'm not saying all buildings have good quality in Dubai but if you buy from a good developer, you will get a high-quality unit but they're expensive. Dubai is much better than EU, if you have money.

 

[Alonzo]

I think Dubai properties are not good investment. All properties quality is terrible.
Just look at listings. Many new buildings look old already. Very cheaply built. They just look nice in visualization.

It reminds me of the real estate in Italy lol

Edit: It's actually just like Italy

 

[Konstanz]

I'm not saying all buildings have good quality in Dubai but if you buy from a good developer, you will get a high-quality unit but they're expensive. Dubai is much better than EU, if you have money.

What would be good quality and expensive example of property in Dubai?

 

[turtle]

What would be good quality and expensive example of property in Dubai?

bluewaters residences, bvlgari residences, one at palm...

 

[Luxxxtino]

Hello, Good for you, I'm also considering getting the GV later this year, but I well get it through other means as I'm already well-established in the UAE.

that is not too bad considering that most Agents charges 2% ( and they may also charge VAT), and believe me when I say that I've seen my fair share of people who are new to the UAE and are being charged notorious fees frequently.

and you know that there is a mandatory 4% DLD fee that you have to pay when buying a property in Dubai, right?. so, you need to account for any expected or unexpected fees, and it's essential to have a clear understanding of all the fees you'll be paying before making the purchase.

Btw, why are you not buying directly from owners?, it's definitely worth considering as you can negotiate the price with the owner directly, and you'll only have to pay the DLD fees. but keep in mind that you'll need to do your due diligence to ensure that the property is free of any legal or financial issues, because dealing with owners in the UAE can sometimes be a pain in the a*s, so you need to be cautious.

Don't. setting up a company solely for the purpose of holding one property, it's not worth it.

In my opinion, it's better to pay the agent fee and get it over with. However, if you plan on purchasing multiple properties in the future, having a holding company in the UAE can be a good idea. There are also other great alternatives, but you do you.

Good luck!

Thanks for this mate. When you say "buying directly from the owners", how would you suggest one does this? Obviously looking at Propertyfinder I can only see the agent listings and have no idea who the actual seller is to be able to contact them. Do you suggest posting in owners' facebook groups or something like that? Thanks

They are trying to rip you off. There is no such thing as "Escrow Agent" and you can open a bank account before your residency. Fly to Dubai as a tourist and approach to ENBD, ADCB or Mashreq. They can open a non-resident account for you but you need to apply their priority/gold segment which requires a minimum 500K AED deposit. You can convert your non-resident account to a resident account once you get GV.


It is another fee on top of the 2% commission.


It depends on where you buy from. If you're going to buy a cheap supply from Damac then expect bad quality but if you buy from Meraas you will get a nice unit.

This is really helpful, thanks a lot. I'll look to just get a non-res account to avoid the fee then. I'll be able to meet the 500k balance but I see they ask for 3 months' worth of statements. Since I've built the business for exit rather than cashflow, I've received very little in the way of income in the last few months (£2.5k / month). Do you see that as being a limitation on my ability to get one of these gold/priority accounts? Thanks again!

Regarding property quality, I'm looking for a modern building in the marina ideally and I've been advised that Marina Gate is one of the few of these that is actually built to a decent standard - reviews I've seen seem to concur, not sure if you're aware of anything comparable/better in terms of quality? Ik Emaar 6 is good but not really looking for an older development like that tbh. Are "modern" and "high quality" really such contradictory terms? Unfortunately, I see that Meraas have no developments in the Marina, Bluewaters looks amazing but is out of my price range.

I lived in Marina Gate. Buildings are new and already seems like 15+years old.
You just cant compare quality in Europe and Dubai. Everything just seems nice only on paper in Dubai

Damn, I'm literally looking to move into Marina Gate 1/2! Is it actually that bad? Reviews seem positive and I went there in-person last month and didn't seem tired at all. Any other modern marina developments that you think are of superior quality?

 

[turtle]

This is really helpful, thanks a lot. I'll look to just get a non-res account to avoid the fee then. I'll be able to meet the 500k balance but I see they ask for 3 months' worth of statements. Since I've built the business for exit rather than cashflow, I've received very little in the way of income in the last few months (£2.5k / month). Do you see that as being a limitation on my ability to get one of these gold/priority accounts? Thanks again!

Regarding property quality, I'm looking for a modern building in the marina ideally and I've been advised that Marina Gate is one of the few of these that is actually built to a decent standard - reviews I've seen seem to concur, not sure if you're aware of anything comparable/better in terms of quality? Ik Emaar 6 is good but not really looking for an older development like that tbh. Are "modern" and "high quality" really such contradictory terms? Unfortunately, I see that Meraas have no developments in the Marina, Bluewaters looks amazing but is out of my price range.

As long as you deposit 500K, they will be ok for a non-resident account.

Number 1 rule is never trust real estate agent in Dubai. My suggestion is to go to EMAAR and check the properties available right now. Their building quality is above Dubai's average. You can book a unit with your credit card and get a payment plan instead of a full payment. You can even transfer money from your foreign account.

 

[Konstanz]

Damn, I'm literally looking to move into Marina Gate 1/2! Is it actually that bad? Reviews seem positive and I went there in-person last month and didn't seem tired at all. Any other modern marina developments that you think are of superior quality?

I lived in Marina Gate 2. Yes, quality is terrible in European standards. For example, the bathrooms are flooding because showers are done without correct leveling... ) Only cheap materials seems to be used for everything. Lots of elevators but you still have to wait some time. After 10 years this building will be very bad. Now it is still ok.
But I think is everywhere in Dubai like that. Maybe Burj Khalifa is different, because they really put a lot of money in that building. You can check Burj Khalifa at properties search and you will see it's very different quality than other buildings.

Just check what is luxury apartment in for example in Paris or London and what is luxury apartment Dubai. You just cant compare the quality.

Never trust "visualizations" in Dubai. It's a pure developers scam to extract money. You will get just cheap Chinese quality apartment...

The same is with the hotels. Dubai 5stars are not 5stars in London or Paris in most cases.

Also you can complain in Europe about something. If you complain in Dubai you just go to jail??? LOL

 

[Luxxxtino]

As long as you deposit 500K, they will be ok for a non-resident account.

Number 1 rule is never trust real estate agent in Dubai. My suggestion is to go to EMAAR and check the properties available right now. Their building quality is above Dubai's average. You can book a unit with your credit card and get a payment plan instead of a full payment. You can even transfer money from your foreign account.

Thanks.

Yep, Emaar seem solid but dated in the Marina area, and unfortunately no 1 bedrooms on emaar beachfront with full water view. Will keep searching but might have to end up settling for an older emaar build like the Six Towers or Al Majara.

I lived in Marina Gate 2. Yes, quality is terrible in European standards. For example, the bathrooms are flooding because showers are done without correct leveling... ) Only cheap materials seems to be used for everything. Lots of elevators but you still have to wait some time. After 10 years this building will be very bad. Now it is still ok.
But I think is everywhere in Dubai like that. Maybe Burj Khalifa is different, because they really put a lot of money in that building. You can check Burj Khalifa at properties search and you will see it's very different quality than other buildings.

Just check what is luxury apartment in for example in Paris or London and what is luxury apartment Dubai. You just cant compare the quality.

Never trust "visualizations" in Dubai. It's a pure developers scam to extract money. You will get just cheap Chinese quality apartment...

The same is with the hotels. Dubai 5stars are not 5stars in London or Paris in most cases.

Also you can complain in Europe about something. If you complain in Dubai you just go to jail??? LOL

Jeez that's super concerning - have you managed to find somewhere that's higher quality now? Disappointed by your anecdotes as most reviews I see of Marina Gate are fantastic, appreciate you sharing.

 

[MiddleEuroAsia]

It is another fee on top of the 2% commission.

well that's atrocious, but not surprising, as I said, lots of new people are being charged notorious fees frequently.

It depends on where you buy from. If you're going to buy a cheap supply from Damac then expect bad quality but if you buy from Meraas you will get a nice unit.

Damac is money laundering Ponzi trash, and yes meraas (and DP) are Great developers.

Thanks for this mate. When you say "buying directly from the owners", how would you suggest one does this? Obviously looking at Propertyfinder I can only see the agent listings and have no idea who the actual seller is to be able to contact them. Do you suggest posting in owners' facebook groups or something like that? Thanks

Yes facebook groups, numerous individuals sell their properties without the involvement of agents. However, it is crucial to bring a technical inspector along to inspect the property thoroughly, including its plumbing, electrical systems, fittings, etc. Moreover, if any issues are found, negotiate with the owner to address them, and he either fix them and you accept it, lower the price of the property or you simply walk away and find another property.