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Resale Procedure

Discussion in 'Dubai property' started by mpat, May 10, 2008.

  1. mpat

    mpat New Member

    Hallo friends

    Can anyone advice what should be the correct procedure for resale? I am a bit confused as some agents are asking to put money in their personal account,though they are registered agents,can I trust them?

    Has anyone done any resale buying selling like this?

    What should be the best way of doing it ?

    THANKS IN ADVANCE.
     
  2. Sixgun

    Sixgun New Member

    mpat,
    The flat I'm buying in Stadium Point is a re-sale.
    The process of sending money was held up because (Profile told me) they had to change all their accounts to Rera approved escrow accounts.
    OK, sounds good.
    When I eventually received the account I should send to however, it was a personal PROFILE PZZ account.
    When I questioned this, they told me:
    "The money you are paying has to go to pay off the guy selling, because if we put yours into escrow, we can't remove it to pay him.
    His money (30% of price) is already in escrow, and paid off the flat, so when contract is exchanged to your name, it is exactly the same".

    It sort of makes sense doesn't it.
     
  3. Roshan

    Roshan New Member

    Mpat,

    I will contact a few agents in the industry as to what the procedure is. The resales are usually done on the basis of goodwill I'm told.

    I witnessed a sale for a friend where the real estate agent drafted a MOU and each party was told to give a deposit ( which they call earnest deposit ). The agent collects the cheques from both the parties. The agent in this case is the broker or executor. If any party defaults then that money is irrevocable and considered lost.

    A friend of mine sold a flat in Downtown and I will ask him what is the procedure.

    Watch this space for more details.

    Regards

    Roshan
     
  4. mpat

    mpat New Member


    Thanks six gun and Roshan.

    I will be waiting for more details,

    bye
     
  5. Lsab

    Lsab New Member

    Me too! I want to sell our studio in International City and have absolutely no idea of the process or how long it takes. I look forward to your reply Roshan.
     
  6. uaerealdeal

    uaerealdeal New Member

    Resale Procedure Please Help

    There are so many doubts as to the resale procedure as there is not fixed step wise instruction as to the procedure, even i have a few doubts:

    1. Usually a First Buyer pays 5% or 10% to the developer and gets the unit registered in his name. So in the developers list it will be the First Buyer who will be registered (If I am not getting it wrong)

    2. For example if the First Buyer wants to sell at a premium, this is where things are unclear, will the second buyer who is buying from the first buyer get his name in the register? why does a developer charge transfer fees of 2% or etc? is the developer legally allowed to charge??? as it is no sale and purchase agreement would have been drawn up or signed by then... As most developer will draw up a sale and purchase agreement only after 20% to 30% depending on the developers...

    3. In this case what happens the sale from 1st buyer to the 2nd buyer happens only on paper.

    I would appreciate if any of the more experienced people on the forum and experts would put in a step wise flow chart kind of message which shows how exactly the resale procedure takes place....
     
  7. DAYFox

    DAYFox New Member

    Great idea! Hope someone can help us all out!

     
  8. New_Investor

    New_Investor Banned

    RERA has mentioned in an earlier article that the 2% transfer fees charged by the developers are NOT LEGAL, and soon they are going to ban it as it should be a fixed amount.
     
  9. Roshan

    Roshan New Member

    mpat,

    Beware, I heard some horrific stories. It's not that deals are not done, I have seen so many deals go through without any problems, but the seller can turn nasty if he wants to.

    Met a lady who bought a house in the secondary market, through an A1 real estate agent ( the ones we usually call the best in Dubai, one of the top three ).

    The seller refuses to transfer for obvious reasons as the flat has appreciated.

    The buyer is stuck with her down payment and lawyer fees...and so far the real estate authorities cannot force the seller to honour his committment.

    She has been shuttling between all places and she has got no one to help.

    Does anyone know of a good lawyer :mad:

    Regards

    Roshan
     
  10. mpat

    mpat New Member



    Hi Roshan

    I came across following lawyer ( carol alderson at Midfa associates ) and is good ,though a bit expensive.


    Office 1004, Al Reem Towers, Al Maktoum Rd, Deira, Dubai
    P.O Box: 32367, Dubai

    Tel: + 971 4 2272701

    Fax: + 971 4 2277422

    midfaadv at emirates dot net dot ae
     
  11. uaerealdeal

    uaerealdeal New Member

    This is precisely the reason I had asked some of our more experienced forum members to atleast chalk down a step wise instruction list of the sales and resales procedure...
     
  12. Lsab

    Lsab New Member

    I've left several posts and PMs asking about the selling process but so far, no-one has wanted to share this information. Everybody has been so helpful throughout the buying process but very quiet now. Hope someone somewhere can assist. :confused:
     
  13. uaerealdeal

    uaerealdeal New Member

    Step Wise Instruction List for Resale Procedure

    Hello Friends,

    I am trying to chalk down a step wise instruction list for resale procedure as per my knowledge (Senior members and experienced resalers, please feel free to correct or add or remove any steps that you feel is required)...

    Only proper knowledge can help us avoid problems and to take steps to protect ourselves...

    So here are the Steps as Under:

    Step1:
    Investor/Buyer1 Buys Direct from the Developer

    Step2:
    Buyer1 wants to sell @ Premium or XYZ Price/sqft

    Step3:
    Buyer1 tried to sell Directly or through an Agent

    Step4:
    Negotiation Process between Buyer1 and Buyer2, regards to price, terms and conditions, details etc.

    Step5:
    If Negotiation Fails Go Back to Step 3

    Step6:
    If Negotiation Succeeds Go to Step 7

    Step7:
    Buyer1 and Buyer2 draw up an MOU by themselves or drafter by a lawyer, stating the agreed price, price validity, payment details, terms and conditions, project details, ownership details, time to transfer, penalty clause etc.

    Step8:
    Buyer1 and Buyer2 Sign the MOU and Buyer2 seals the deal with Buyer1 with a small token amount or deposit amount [This step is discretionary as to the amount and method]

    Step9:
    Buyer1 takes an appointment with the developer with regards to the transfer

    Step10:
    Just before going to the developer for actual Transfer, Buyer2 will handover payment cheque + premium cheque [whatever payment mode] which will preferably be a manager cheque or demand draft.

    Step11:
    At the developer office, the developer will ask both Buyer1(Current Owner) and Buyer2 to sign transfer and assign forms etc. For this step it is advisable for both Buyer1 as well as Buyer2 to be carrying with them ID Proof/Passport Copies along with themselves. [Buyer2 will definetly need to take along passport copy along with themselves]

    Step12:
    Either Buyer1 or Buyer2 as per the Deal terms pay the Developer the processing fees or transfer fees [p.s. just heard that RERA has made it illegal for developers to charge transfer fees]

    Step13:
    If property is paid more than 20% to 30% then Developer will take Buyer2 to the Land Department to change the Title deed and Officially Transfer.

    Step14:
    In Property is only 5% to 15% paid

    [This is where my knowledge is limited technically, I dont know how developers will handle - just change the name on the reservation form or change the records of Sale and Purchase Agreement if it is already issued - what if Sale and Purchase Agreement has not been issued - what in case if Sale and Purchase Agreement has been issued by not signed by Buyer1 then would the developer make the Sale Purchase Agreement Straight in the name of Buyer 2 - I need help to clarify this step]

    Please feel free to modify, add, remove any steps or in any way make this Step Wise Instruction List more better...

    It would be even better if somebody is able to make a graphical representation of the above steps in a flow chart or something like that once more inputs are given by Senior Members and Experienced Resalers and final version is decided...

    Thanks and Regards...

    UAEREALDEAL :)
     
  14. Roshan

    Roshan New Member

    Nicely written.

    In step 8, the amount is decided by the broker and each party presents cheques for the same amount. In case Buyer 1 renegades on the deal, then I am told that Buyer 2 reserves the right to encash Buyer 1 cheque.

    In step 10, payment by managers cheque is the best. In that way, there is a record of the transcation.

    It is good to go through a competent, certified lawyer, even if it cost you money. When I mean competent, it has to be and not someone who pockets the fees and leaves you high and dry when there is trouble.

    You could even approach a certified broker by RERA to carry out transcations.

    CAUTION : Never seal a deal in a secondary market on your own. I have come across pathetic cases where the buyer has given the down payment and the transfer did not take place even a year after signing.

    Regards

    Roshan
     
  15. Lsab

    Lsab New Member

    Thank you for this information. It's extremely helpful.
     
  16. uaerealdeal

    uaerealdeal New Member

    Thanks for your inputs, but I still need clarification on the last step...
    wherein in the case of 5% and 10% payments only where no sale purchase agreement has been drawn out, it is only on reservation form,

    also in case where sale and purchase agreement has been drawn out but not yet been signed by Buyer1 then what happens can Buyer1 Ask developer to directly draw up sale and purchase agreement on the name of Buyer2 since as it is Buyer1 has not signed and is exited (In a way it is almost as if Buyer1 has his name on reservation form)...

    In case where Buyer1 has signed the Sale and Purchase Agreement with the developer then i Guess the developer will charge processing fees to get the name changed...

    what would be the steps in those cases... and also other case examples that I have mentioned...

    Would appreciate to receive some inputs from people who have done this...
     
  17. Investoman_uae

    Investoman_uae New Member

    From my experience, every agent has their way of doin it. Every developer has their way. And the investor has to be careful somewhere in between. Also there has to be an element of trust from all sides, because at some point, a cheque will be in someones hand without guarantees... even if it has the developer's name on it.

    The problem i noticed with RERA is that no developer is giving it the respect it deserves. Does it have the power to enforce law? Ok..then,... what is law? There has to be clear regulations and procedures to follow throughout the UAE. Why is it called a country and each emirate behaves in a different way when it comes to laws and regulations. Ok maybe its meant to be this way.

    Also, there is a huge lack of knowledge from people employed by the developers. At cityscape, I go to those big developer corners and ask one of their representatives.... 9/10 I get "sorry, we dont have the full information yet",... or "Sorry prices will come this afternoon".... or "Sorry, you are asking the wrong person about this, am just employed for today and am meant to look pretty and smile and give out these bags full of leaflets". Damn!.... who the hell is the right person to ask then.

    All they are concerned about is money money money... developers raise prices every day, to make the most,... and then, investors buy and raise the premium the next day... etc etc.

    Alot of people buy and they dont even have a contract,... all they have is an MOU.... one developer told me... well, whats the difference,... MOU is like a contract dude.

    Arrggghhhhhhh!!....

    Inv.
     
  18. zlajoni

    zlajoni New Member

    Simpel question...what does "MOU" stand for?
     
  19. Doobedoo

    Doobedoo New Member

    Memorandum of Understanding

    It's a written agreement between two or more parties that, in this case, precedes the actual Sales & Purchase contract or contract proper. In essence, it's the glue that gets buyer and seller to a pont of agreement before the process of transferring the property at the developer. It is required because if I agree to buy a property from you and we are able to secure a meeting 6 weeks from now at the developer, what's to stop you taking a higher offer or me just walking away before that meeting.

    On the signing of the MOU, monies often change hands to 'secure' the deal and if there is default on either side penalties are normally due, for e.g. if the buyer who may have paid a 10% deposit defaults, the seller may the 10% and walk away. Typically it is more risky for the buyer - which is why one needs to have as much security as possible - I find this is best achieved by using a reputable agent who has 'brand equity' at stake if they do not consistently broker good deals - it's also a point of recourse, although certainly with no guarantees.

    There is risk in this approach - that's why property can be bought, sold and bought again in a week. Trying to do something similar in the UK, US, Europe or most other more mature property markets would take many weeks due to highly developed conveyancing processes, typically with resultant greater costs. In other words there is a risk reward continuum which you need to bear in mind.
     
  20. Stephendxb

    Stephendxb New Member

    MOU = Memorandum of Understanding.

    In addition...
    The steps for the resale are correct based on my own experience. Some developers will only issue the "Sale Agreement" on a resale after 15% or more has been paid.
    My advise if you are involved in a re-sale is to conduct the transaction at the developers office in the presence of a lawyer. I did it this way and the transaction went smoothly. (I used a Managers Cheque), but more importantly it gave me peace of mind.

    Regards
    Stephen

     
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