| by Kenneth Chase | No comments

#AskDenis: Resale of Off Plan Properties

– I was a witness when people were buying the property – and they were selling it immediately, they were asking like a 15% premium, 20% premium … – Hi everyone! – Today I will answer another question from my client – and this question is related to the resale of the off-plan property. – What is the procedure and what are the restrictions? – Because there are some restrictions related to it. – Before it was possible to resell the property within the same hour. – Like … you buy the unit, you go outside from the developer’s office and you are reselling it. – Even I kind of caught this phase of the market when it was like this. – But after some time developers decided to implement some restrictions to avoid this flipping process. – So right now the developers ask you to cover – a specific amount of the property value before they can allow you to make a transfer. – And usually, it’s 30% or 40%. – It really depends on different developers and on the payment plan as well. – So in the case, if you even paid 10% and you want to sell the property – you still can sell the property but the buyer will have to cover this 30 %. – So let’s say it’s 30%. – And basically, he will return you the money back that you paid – and he will return you and he will pay you the difference between the original price – and the selling price that you are selling. – Just as an example … Let’s say the developer needs to get 30% before they issue you a NOC. – and let’s say the property value is 1 million and you paid only 10% – and you are selling the property for 1.1 million. – So the buyer will need to give you the money back that you paid for the property which is 10% – and the difference between 1 million and 1.1 million which is 100,000 – and he needs to cover the difference to reach 30% as per the payment plan and As he paid and accelerated the payment, he will just have to wait until the next instalment of 40% comes So this is how it works. Another structure of the deal is where the owner, the seller will cover this 30% and the buyer will just return him back 30% plus the difference and actually, it’s an easier structure for the deal because the buyer doesn’t have to worry about that he’s paying for somebody’s else property but it’s possible to structure it. There is no no problem with that and even for the seller it’s not a big problem because Once he covers this 30% we can say that within the week he gets this money back because he’s covering it once he has already a contract of sale with the with the new buyer, so This is how it works It’s possible to do the reselling. It’s an easy process. People are doing it people were doing it a lot before and yes, I said before when they were going out and we’re reselling it quite quickly like even Like I was a witness when people were buying the property and they were selling it immediately and they were asking like 15% premium, 20% premium and in some cases, their cheque for the downpayment wasn’t even cleared by then. So basically somebody was going in. We’re going out by making like two hundred, four hundred thousand dirhams within a day But don’t think that it was easy to get the units back then There was a line, there was a queue, there were fights and even like I was standing in the queue to get a unit for my clients. So this is how it works. Let me know if you have any questions I’ll be happy to answer them and I’ll see you in the next video. Goodbye

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