Buying Property in Dubai: Complete Guide for Foreigners

Hi, I'm GG Benitez, a certified international property specialist, connecting global real estate investors with the incredibly lucrative opportunities in Dubai's real estate as well as the greater UAE. Today, I'm going to cover some of the most common issues that have arisen now that I've been doing this for a couple of years. What better time. I was actually going to do this episode alone, but since I have my guest Ksenia from one of the most reputable developers in all of Dubai, Sobha, I thought this would be a great time for us. Ksenia, hello. Hello, GG. To cover this because we've been going through it now, right? Since you and I now have this long history together. Yeah, I love working with you. And you are sales director and you have so much experience dealing with global real estate investors, which the majority of investors in Dubai are global real estate investors. And maybe even more specifically American and Canadian investors. So I wanted to ask you some questions and help ease some of the concerns of some of my investors about some issues that have arisen, how to overcome those issues, and if really they're even issues at all. But because it is a whole new market, we can address some of these, yeah? Okay, yeah. So let's start with one thing that sometimes I have a hard time persuading and helping people understand is not a sales pitch, which is the significance of an EOI, an expression of interest. So Ksenia, can you share why an EOI is so important and what it does when we don't have an EOI in place? Okay. So EOI basically, this is the expression of interest which you're going to submit to express your interest towards the project, presented project, yeah? So if you don't have an EOI, let's say one tower, how many apartments can be? 200, 300, maximum 400, yeah? Maximum 400. There are 15,000 agents in Dubai competing with each other. With each agent has, even if each agent has one client, and let's say, okay, not all these 15,000, but let's say half, or let's say even 10 percent want this project. So usually on a launch day, there is the queue, and there are people standing in a queue already with EOIs. So if you don't have your EOI, obviously your chances, it's not close to zero, they are zero. Because even if you have an EOI, sometimes you know, clients get mad that you were not able to get the project and stuff like that. Oh, I'm sorry, you were not able to get the apartment and stuff like that, because you simply weren't lucky, you know? So EOI makes a huge difference. I mean, this is the only possibility. And let's clarify, an EOI deposit is fully refundable. Yeah. All it does is just place, like you said, express their expression of interest, places them in line on a first come, first serve basis based on when they submitted their EOI, to not only increase their chances of securing a unit in that project, but their desired unit and their desired location. So for example, when we're selling Sobha Hartland 2, submitting an EOI when a new tower launches was important if they wanted the lagoon facing. And we saw this come up as an issue. So that's one thing. It's just really helping people understand that it's very different than the United States and other markets around the world. It's very fast moving. I mean, it's the fastest. It's one of the fastest moving markets right now. Yeah, fast moving. I'm not talking about timeline of one month. We're talking about one hour. This is what we're talking about. When I said fast inventory, which is like every minute you got to check. That's another question I had. Because when someone will come to me and say you know what do you have? I said well let's back it up a little bit. Because if I just tell you what I have, it's going to be gone in an hour. Yeah, it can be gone in an hour. Can be gone in a minute. Yeah, can be gone in a week. But so let's first share what is it you're looking for, what are your goals, what's your timeline, what's your budget? Then I will go to Ksenia and say Ksenia what do you have? Because if I come to you and ask you what you have right now, and then they think they're going to take three days to decide upon it. Three days? But some people they still think they can take a year to decide, you know? It's not the case. So I guess that's another challenge actually we can address is that where it's very different than, let's say, because I also I'm a licensed realtor here in California. Where it's very different is there isn't a let's go view properties and check things out. It's understanding the market first, which is why I created The Dubai Connect podcast because there was that missing link of educating different North Americans and different global investors about why Dubai is such a hot spot. Why are people investing? How to invest? What are the expectations? Okay, now you're ready? Now let's go and find availability. Yeah, yeah. So that's another topic. Okay, now when we go through the process a little bit, one of the other questions I have that has come up, one of the other issues when they go to wire, which everything is done digitally, which is fantastic. Yeah. But just the importance of using, and this has come up with us, the IBAN number, right? Yeah. Versus what is it that sometimes some people will get mixed up using? SWIFT and IBAN. This is what you're going to need. I mean, I think if you're talking about SWIFT now, IBAN, I don't think so. That's the case globally. The other thing is BIC. BIC. Okay. Yeah, which we don't use it in Dubai. We use SWIFT. SWIFT. Yeah. SWIFT. So make sure because that will delay sometimes. It just will not go through. It won't go through. Yeah. And then we have to hurry up and make sure it goes through because otherwise you have 14,999 agents that want that property. So it's like let's go. So that's another thing is making sure that we're filling in the format correctly. Another question that comes up, so simple but I thought we could address it, is are the escrow accounts in USD? No. Escrow accounts, so as per UAE Central Bank, no escrow account can be in USD. It is in AED. But as you know, the dollar is linked to the dirham at a stable rate for more than 35 years. So basically Dubai, like the UAE, the whole thing is 55 years. So more than 35 years it is at a stable rate, which is 3.65. And it is automatically convertible because obviously the UAE is one of the global markets. So there is no absolutely no issue. So even if your client sends in dollars from here, it is automatically convertible at the rate of 3.65, which is more than 35 years stable, to dirhams. Basically they shouldn't even get this question, you know? It doesn't matter for them. For them it's dollars, okay, fine, it's dollars. For us it's dirhams, fine, it's dirhams. And that comes up sometimes. They'll say, what's the exchange rate today? And I'll say, don't worry, it's the same thing that it was a month ago, a year ago, three years ago, you know? It's at 3.65, so it's very stable. And that's really a huge benefit when you're investing from North America, that you don't have that fluctuation. So thank you for answering that. Let's see. Another question that I have or that has arisen is sometimes someone is concerned if they haven't received their SPA in what they consider a short amount of time. Can you address a little bit about what's happening right now in Dubai's real estate market with the DLD and SPAs? Sure. So first of all, when the client pays just 2 percent deposit, he's already going to receive a booking form, which is his first document. In total he's going to have four documents. Two from the developer and two from the DLD, which is a good and title deed, yeah? So first, his document, booking form from developer, which has the same legal validity as SPA. So he has nothing to worry about. All everything, all terms and conditions, all his fixed price, how much he purchased, how much per square foot, his payment plan, already mentioned in booking form. However, if he thinks that, like, okay, tomorrow I'm going to need SPA for some reason. So no, it's not going to happen tomorrow because now in Dubai real estate market it is a phenomenal record of deals. And the DLD, it's only one government entity, you know? One square building. They just cannot and you know, there is different timing for government and stuff like that. So they cannot really process immediately. So it takes some time. It's across all builders, all developers, yes, yes, yes. It's the same thing. But you already have booking, you already have booking form. It's not like, let's say, you know, Bali. Now everyone also is trying to invest there. But in Bali, you don't have, you don't have an SPA. Builders, all builders mostly no name. Not mostly, 99.9 percent is no name. They never built or it's the first project or maximum second project or third project. The oldest builder I met there is like 10 years, but what is 10 years, you know? It's like couple of projects. So yeah, here you have already a solid record. You have reputable developer names already. It's not the first project or something. You already have booking form which has the same legal validity. So you basically are secured as an investor and just need to give some time. Sometimes it comes immediately, actually SPA. Depends also, but sometimes yeah, we wait like three to six months. Okay. So that's what we're seeing right now. Yeah, six, it's maximum. Six, it's maximum. Yeah. And then one other question I have, and then I'm going to ask you what you have seen as common issues. How do you feel? Or how would you answer an investor located in the United States or in Canada or in the UK that is just trying to decide between working directly with a developer and purchasing through them, or with a real estate agent such as myself? From your perspective, what do you see as the advantages of working with a real estate agent such as myself? First of all, me myself, I only work if I'm buying something. If I'm going to purchase something for myself, I only work with a real estate agent. I mean unless it's Sobha. Okay, because yeah, I only work with agents. Because first of all, it's going to save me so much time. I'm not going to do all this, you know? So much work, you know? So much like trying to figure out this area and this area, this project and this and this. So I just quickly say what I need and they quickly show me like three to five, let's say, options and this is already shortlisted, right? So this is the thing. First, it's going to save you time. Second, any communication afterwards with the developer, even during the process with the developer, different departments, let's say collection department, CRM department, SPA department. Yeah, fine, SPA. All this, sometimes it's IT department with a system glitch or something. Where is my money? Let's say I was sending money through the link, system glitch. Okay, money deducted from my account, but nobody, it didn't show up. Main system glitch. Need to find this. How am I going to do it? Even if I live in Dubai and know everything and everyone, I can do it, but I'm not planning to do it and I don't want to waste my time. And then imagine a person investor who sits overseas. How is he going to do that? Even if he thinks sometimes he's able to do it, it's going to cause him so much stress and so much time and everything. So it's just like I wouldn't do it. So this is one more advantage. Another thing, another benefit of working with a real estate agent is, okay, let's say your apartment is ready in Motor City, for example. Okay, you sit here in San Diego. You're not really planning to, you know, okay, you might come. Maybe you're going to come, you see your apartment, everything, but who's going to resell your property or rent your property or take care of this property? When is the good time to sell? Or send you money? You want an American account or you want to open an account over there? Maybe you want to open a company over there and want to have an account over there? Who's going to do all these things? It's the agent again. So this is why for me, I'm working in this field. I know everything in this field. I'm still going to use an agent. I'm not going to. That means a lot coming from you because you're a sales director. Yeah, yeah, yeah. And you've been very supportive of my efforts. But the other thing is strategy over time. If someone's looking to build their portfolio and if someone's looking to know when is the timing to sell, if that's what they're interested in, if they're not wanting to hold it for a long-term, property management, that's the other advantage. But long-term rentals, but they want to know when is the best time to sell and flip into another project, right? So there are so many things. I'm going to sell for them because selling is already more complicated. Reselling is already more complicated process. It's not the initial like initial purchase because when you buy from a developer, it's kind of easy. You just send me passport, send me wire transfer. That's it. But when it's resale, it is trustee office, it is DLD, it is transfer, it is name transfer, it is deposit, manager's checks and all these things. Who's going to do this for them? Again. So on that topic and we can close it with this. What do you think? You work, and I'm not just saying this because you're sitting next to me, but you work with so many real estate agents. What do you think differentiates between different real estate agents, makes one a really strong real estate agent versus one who you think is not going to survive in the market? I wouldn't say I would judge anybody that they wouldn't survive in the market because I've seen so many examples where I was just like, look at the person and think this one is hopeless and then eventually, you know, a person came back. And they came back as a millionaire or billionaire because they quickly sold something, something, you know, okay, some buildings or something. So I wouldn't judge in this case, but what I've seen who survived longer and what I personally do, even though I'm not an agent, but you know, all the time I'm getting this. Sometimes clients thinking, I know Ksenia, she's with the developer directly. Let me text her. They forget that I'm sales and let me text her about an apartment which I bought three years back. There is some due installment or something something. And me, I have to approach another department, collection and that. But what I think the most important is that the client, the individual investor, which is your client, has to clearly see the service. If you said I'm going to send you an SOA by 8 a.m., you have to send by 8 a.m. Even though you know how we all live in Dubai and inshallah and in Arabic time, which is our, which is, you know, it's not that like German timing. It's a little bit different. I mean, I like it more, but still I'm trying to work on myself. I prefer everything on time. But yes, you know, it's sometimes it just doesn't depend on you. It just, the whole country operates on this. Yeah. You're very good though. You're very good. That's probably why I really love. No, you're always on time with me. You're always very extremely responsive. I sometimes wonder if you even sleep because no matter what time I message you, you always are so responsive to me. So yes, so that's having that follow through. Yeah, and even if the sale is already done, you know, post-sale service, nobody likes to do it, but trust me, it's not just, for example, I don't like it. Nobody likes it. But this is what makes significant difference. After this, this is your client forever. If you've done all this part of the circle, so they're not going to go from you anywhere. Why? Why? So Ksenia, actually just to say, when you say that nobody really likes to do the post-service, I had this topic on a previous podcast with my broker here. American mentality for real estate agents is so different, I feel, than the Middle East. Because the Middle East is very transactional. People are making a lot of money, quick money. Quick money, and not necessarily that they even want to be doing real estate. But they decided they even do it. They just, anyone can anyone can sell anything. Yeah. But in America it's very different. To be able to get your own license, realtor here, it's very difficult process. I also have a designation which is very unique, a certified international property specialist, which I took even more classes to understand how to do international business. But this is this, there is a more relationship-based approach. But this is also like significant difference for you as being American and working with Americans and you know, now this is obviously, like for me if I'm American sitting here, obviously I'm going to have the best trust regardless with whoever I was speaking with. I might meet one new realtor tomorrow. I met somebody yesterday. They educated me well enough, but still, you know, I would, I would. Yeah, right? Because it's not just about making a sale, but it's about helping guide that investor throughout their long-term journey. Even for example, I mean I'm, I know this is like tooting my own horn, but creating this podcast, it's been an investment for me, but the investment is so that I can really help educate them. And have you sitting down and taking the time to do this. Yeah. Yeah. But I've done it already several times. I've done the same with the Russian market. And then now I do the same with you with Americans. So I've done it like several times. Yeah, so and I thank you because it's important for us to be able to come on and have an episode where we address honestly and openly some of the common issues that have arisen. Also, before, so it's not like me personally started doing it, but it was a group of Russian people in the Middle East who started doing it. So before, you know, Russians would first of all they would not buy, same like now with Americans. They would not buy somewhere in the middle of the desert. Okay? Another thing. Somebody who already went to Dubai and they really love it, because obviously you cannot, you cannot go there and. Yeah. So they never bought on the phone over the phone. And we were working on this so hard to try to educate them that in Russia there is a lot of scam. It is a big country. It's, it's, it's not that easy to control a big country, right? Yeah. So we were trying to educate them that everyone can buy, you don't have to come because they have money. They're sitting on money. They want to invest somewhere, not just in Russia, but they're scared. So we spent a lot of time educating them that there is no harm. You can buy just through WhatsApp. And now it's the same when I was in New Jersey. Now there was like email, email, email. I was like, what email? WhatsApp, WhatsApp. But I see people are afraid when they give WhatsApp. People are afraid to show their ID because for me, with my perception, what am I going to do with your ID? Giving your passport, the passport, what possibly? That actually is quite a big deal. It's a big thing for me. I'm just sending my passport. Okay, you want to book a ticket for me? Let's go to Vegas. Okay, I send you my passport, book it, you know, I don't have time. This is like this. But here they not just passport because you know, when they come in we have to register them. Uh-huh. And there is a thing to scan ID, otherwise it wouldn't be registered. This is why we have a higher management. Yeah. And they were like, no, no. And in my head like, what possibly I can do with your ID? But then they started explaining to me that a lot of things, a lot of things, open bank accounts, yeah. So this is also Dubai that does not happen because of the same thing. It's not. And there's, I have a whole separate that I did remember Dr. Mahmoud Al. And I I'm proud of that interview. But where we talked all about the safety of investing in Dubai and that that can't happen. So it is also shifting that mindset that Dubai is safe. You can't scam. You can't do fraud. It's not even in my head like what I can do. Yeah. I mean, it's not like something I'm a saint or something and I don't know what kind of what type of scam exists in the world. But possibly I cannot. It's not possible, no? Yeah. Imagine what I can do, you know? And another thing, so and then people don't give WhatsApp also because maybe you send me some link and I was like, what link? And they were like, yeah, this also type of scam. And I was like, yeah, but this is like for faster. It's just for your benefits. It's for faster communication because by the time I'm going to send you an email, well, you guys don't even read your emails, right? Yeah, yeah, yeah. Even if I sent you an email, I still have to, if they send me an email, I still have to, they still have to text me WhatsApp. Check your email. Actually, so this is like check your email. This is another one of those issues that comes up with you. You better get the WhatsApp if you don't have it and get used to communicating that way and figure it out because email is done. And even in Dubai court they accept WhatsApp conversations. Yes. No need, no need for notary documents. Come with notary. WhatsApp is enough. Yeah. Yeah. Well, thank you Ksenia. I'm sure that this will evolve as we continue to help guide these global investors and there'll be more questions, but I love that we have open communication so we can continue to address, overcome, and help North Americans and global investors all over the world to capitalize on the amazing lucrative opportunities in the Dubai real estate market. So with that I will say please make sure to like, subscribe, follow, and stay tuned for the next episode.