Experts warn first-time UAE buyers: watch out for hidden fees up to 8% and bank valuation shocks before even viewing a property.
For many residents in the UAE, buying a home is a dream they work toward for years. They save diligently, searching for the perfect property once they feel ready to cover a down payment.
Then reality sets in: the bank values the property lower than the agreed price, and the 7–8% in “hidden fees” they hadn’t anticipated quickly eats into their savings.
With seven out of ten UAE residents planning to buy property this year, first-time buyers are flooding the market. But experts caution that enthusiasm without proper preparation can lead to major disappointments.
1. Viewing Properties Before Your Finances Are Clear
Many first-time buyers make the mistake of visiting properties before understanding what they can truly afford.
“Serious buyers should ideally have around 70 to 80 per cent of their finances clear before they start viewing properties,” says Muhammad Ali Khan, Sales Manager at Banke Properties.
This doesn’t mean every detail must be finalised, but buyers should know how much cash they can put down, what mortgage they’re likely to qualify for, and what monthly repayments feel comfortable.
“I’ve seen many buyers fall in love with a property, emotionally commit to it, and only later realise that banks wouldn’t approve the required loan amount,” Khan adds.
2. Underestimating Hidden Costs
Many buyers focus heavily on the down payment and overlook the range of transaction-related fees.
“The ‘hidden costs’ like registration fees, mortgage charges, and post-handover fit-out expenses are often underestimated,” says Elie Namaan, CEO and Co-Founder of Ellington Properties.
These fees include Dubai Land Department transfer fees, agency commissions, bank valuation and processing charges, trustee fees, and developer No Objection Certificate fees. Together, they can add up to 7–8% of the property value, according to Muhammad Ali Khan.
“I’ve seen buyers save enough for the down payment but neglect these additional costs,” Khan explains. “It often leads to last-minute scrambling, delays in closing, or unnecessary stress.”
Solution: Calculate these costs before you start shopping. For a Dh2 million property, that’s an extra Dh140,000–Dh160,000 in liquid cash.
3. Not Factoring in Service Charges and Maintenance
The purchase price is just the beginning. What happens after you move in?
“Buyers often underestimate service charges and future maintenance costs, especially for older properties,” warns Svetlana Vasilieva, Head of Secondary Sales at Metropolitan Premium Properties.
These ongoing fees can significantly impact your monthly budget, yet many first-time buyers overlook them while focusing solely on the initial purchase.
Solution: Request the service charge history for any property and factor it into your long-term affordability calculations.
4. Assuming Banks Will Finance 100%
A common misconception is that banks will cover the full property value—but reality is different.
“Expat buyers typically receive 70–80% financing at best,” says Muhammad Ali Khan. “All associated fees must be paid upfront in cash.”
If the bank’s valuation comes in lower than the agreed purchase price, buyers must inject additional cash to bridge the gap.
Solution: Work with a mortgage advisor early. Understand exactly how much the bank will lend and keep alternative properties as back-up options.
5. Comparing Mortgage Payments Directly to Rent
Many UAE residents assume their monthly rent can be converted into a mortgage payment.
“While the monthly instalment may appear similar on paper, buyers often forget to account for interest rate fluctuations, service charges, insurance, and long-term ownership costs,” Muhammad explains. “These additional expenses can significantly affect affordability over time.”
Solution: Build a complete monthly ownership budget that includes everything—not just principal and interest.
6. Not Having Paperwork in Order
Buyers can change their minds, but doing so can be costly.
“Once a Form F is signed, withdrawing becomes difficult and penalties apply,” warns Svetlana.
Beyond buyer’s remorse, documentation issues—like missing No Objection Certificates, title deed discrepancies, or delays in clearing the seller’s mortgage—can derail transactions.
“Buyers often underestimate how strict banks and developers are regarding paperwork and deadlines, especially in the secondary market,” Muhammad adds.
Solution: Ensure all documents are in order before signing. Work with experienced agents and lawyers who can spot potential issues early.
7. Skipping the Pre-Approval Stage
Around 15–20% of buyers face challenges during pre-approval or receive loan offers far lower than expected. Common reasons include insufficient fixed income, high existing liabilities such as personal loans and credit cards, short employment history in the UAE, or incomplete documentation.
Self-employed buyers and recent residents face even greater scrutiny. “When buyers skip the pre-approval stage altogether, it often leads to wasted time, disappointment, and failed transactions later in the process,” warns Muhammad Ali Khan.
Solution: Obtain pre-approval before seriously viewing properties. The process takes just a few days and can save months of frustration.
