Distressed Property in Dubai: 5 Places to Find Deals for Sale and How to Check Sold Prices

Distressed Property in Dubai

Here is where to find it, how to check that the price is really low, and what is different when the seller is in a hurry.

Where to Find Distressed Property for Sale in Dubai

Start with the two auctions. They are the only places where you can be sure the owner has to sell, because a court order or a fixed timetable is forcing the sale. The other three places come after them, and they take more checking.

One name comes up in all five. The Dubai Land Department, which everyone calls the DLD, is the government office that registers every home sale in Dubai. Nothing is yours until the DLD has recorded it.

1. Emirates Auction

When someone in Dubai stops paying their mortgage, the bank cannot simply take the home and sell it. It has to go to court, and the court orders a public auction. Those auctions are run online by a company called Emirates Auction. So if you have ever searched for a list of bank-repossessed homes in Dubai, this is that list.

The rule comes from Dubai's mortgage law, and it is worth seeing in the law's own words.

“The bank must give "at least thirty (30) days' notice through the Notary Public". After that, the judge can "issue an attachment order against the mortgaged Real Property in order to sell it by public auction".”

Dubai Law No. 14 of 2008 Concerning Mortgage, Articles 25 and 26 (unofficial English translation)

Each home on the site shows its location, size, current price and the number of bids so far. Before you go further, check two things on the listing:

• The location. The site covers the whole UAE, so make sure the home is in Dubai.
• The label. "Freehold" means anyone can buy it. "GCC" means only citizens of Gulf countries can.

Buying here is simple, but it is fast, and the speed is where people get caught. This is how it goes:

1. Create a free account. On the Emirates Auction website or app, choose new user registration, enter your details and mobile number, and type in the code sent to your phone.
2. Open "Properties" and read the listing. Check the label, the location and the property details. Homes are sold without the furniture inside.
3. View the home, if you are allowed to. You can go inside only if the home is empty and the court has handed over the key. Contact the company to book a visit.
4. Pay the deposit. It is 20% of the start price, which is the price at which the bidding opens. You pay it by a manager's cheque made out to Emirates Auction, or by bank transfer. A manager's cheque is one your bank issues itself, after taking the money from your account. Personal cheques are not accepted. Hand it in at an Emirates Auction office with the receipt and a copy of your Emirates ID.
5. Bid online. A bid in the final minutes adds three minutes, so an auction can run past its end time. Once you are the highest bidder, you cannot withdraw.
6. Pay the rest within 10 days. The 10 days start when your bid is approved.
7. Receive the title deed. Emirates Auction completes the registration with the DLD for you. The home is yours only when the title deed is issued in your name.

Here is the same path on a flat with a start price of AED 1.5 million:

The part to take seriously is the money. You put down 20% before you can bid, and once you win you have 10 days to pay the rest. A normal mortgage takes six to ten weeks. So in practice this route is for buyers who already have the full price ready.

Then there are the fees. Emirates Auction's terms say the buyer pays 3% of the sale price plus AED 15,000. The sale price is your winning bid. The terms say this amount includes the fees for transferring ownership of the home to you, and Emirates Auction's own commission. On a winning bid of AED 1.5 million, 3% is AED 45,000, so the fees come to AED 60,000.

The terms do not name the Dubai Land Department. So ask Emirates Auction to confirm in writing that the DLD's fees are included before you pay a deposit.

Before you bid, know these three things:

• If you win and cannot pay in time, you lose the whole deposit. The home then goes back to auction.
• A tenant may be living in the home. Emirates Auction says that is yours to sort out once you own it. You may not even be allowed inside to look before you bid.
• The sale is not final straight away. For 10 days after it ends, someone else can reopen it by offering 10% more.

If you do not win, your deposit does not come back by itself. You ask for it in the Deposit Dashboard in your Emirates Auction account. Emirates Auction then pays it back by cheque, or to the bank account the money came from.

Some terms are simply not published. So before you send any money, ask Emirates Auction these questions, through a support ticket on the site or its WhatsApp chat:

• "If I do not win, how many days does my deposit refund take?"
• "Does the 3% plus AED 15,000 cover every fee of the Dubai Land Department, including the title deed?"
• "I live abroad and do not have an Emirates ID. Which papers do you accept from me?"

Our guide to buying property at Emirates Auction walks you through every step, from the deposit to the title deed.

2. Dubai Land Department auctions

The second auction works the other way round. At Emirates Auction a court forces the sale. Here the owner chooses it. The DLD runs its own online auction site, called eMart, where an owner can list a home and let the DLD's rules run the sale.

Why would an owner do that? Because the timetable is fixed. Bidding lasts five working days, the winner has 20 working days to pay, and the owner is paid soon after. So an owner who needs money by a certain date has a good reason to be here. Not every home on eMart is a distress sale, but every seller has agreed to a quick one.

You can also trust a little more of what you see, because the DLD sets conditions for the seller:

• The DLD checks the owner's identity in person.
• While a home is listed, the owner cannot sell it any other way.
• The asking price has to be within the market range.
• If the home has a mortgage, the bank must have approved the sale.
• The owner of a private home must promise to hand it over empty within a month.

The steps are gentler than at Emirates Auction, and that is the main difference for you as a buyer:

1. Register as a buyer. On the eMart website, choose to register as a buyer, or use quick registration with UAE Pass, the UAE's digital identity. It is free.
2. Sign up with Noqodi. This is the online payment system that eMart uses. Every payment goes through it, by bank transfer.
3. View the home. The rules make you responsible for viewing it and checking its details before you bid.
4. Pay the deposit. It is 10% of the asking price, paid online when you ask to join the auction.
5. Bid for five working days. Each bid must be at least AED 10,000 above the last one. A bid in the last 10 minutes adds 10 minutes.
6. If you lose, wait for your refund. The rules say you get the deposit back within five working days of the end of the auction.
7. If you win, pay the rest within 20 working days. You pay the final price less your deposit, plus the fees. The clock starts on the day the home is awarded to you.
8. Receive the title deed. The name on it must exactly match the name you registered with, so register with the name in your passport or Emirates ID.

Here is that path on a flat with an asking price of AED 1.5 million:

The money is easier here. You put down 10%, not 20%, and you have 20 working days to pay, which is about four weeks, not 10 days. That may be enough time for a bank loan, but only if you start early.

The cost is lower too. You pay 2% of the final price to register the sale, plus about AED 530 in fixed fees for the title deed and the map. On AED 1.5 million, that is about AED 30,530. The seller pays the other 2% and the auction fee.

Before you bid on eMart, do these three things:

• Get a written pre-approval from your bank, if you need a loan. The rules say nothing about extra time for a mortgage.
• Ask what happens if you win and cannot pay. The terms we read do not say what becomes of your deposit. Use the site's "Contact Us" page and ask: "If I win and do not pay in time, do I lose my deposit?"
• Look at the direct sale option. If you would rather not bid, you can book a listed home with AED 100,000 and pay the rest within 20 working days.

Here are the two auctions side by side:

3. Property websites

After the auctions, you are back among ordinary sellers, and this is where the word "distress" starts to mean less. On a large property website such as Property Finder, you can type "distress" into the keyword search and get a long list of homes for sale. It is the easiest place to start and the least reliable.

The reason is simple. Nobody controls the words in an advert. You will meet two of them again and again:

• "Distress deal" or "distress sale". A distressed property is a home the owner has to sell soon, so it should be cheap. But an agent or owner can put these words on any advert, at any price.
• "Below OP". OP means original price, which is what the first buyer agreed with the developer. That sounds like a discount. But if prices in the building have fallen since, a home can be below OP and still above what it is worth today.

So use the websites to collect leads, and nothing more. Here is a simple way to do it:

1. Search "distress", and then "below OP".
2. Note the building, bedrooms, size and asking price of each advert you like.
3. Do not call yet. First check each price against sold prices, as the next section shows.

Don't be reassured by a badge saying the advert is cheaper than "the average" either. That average is built from asking prices, not from sales.

4. Real estate agents

Some of the most pressed sellers never reach a website, because their agent calls a few buyers first. These are usually ordinary owners. They are moving away, or they have debts, or they can no longer keep up the mortgage. No court is involved yet, and they would like to sell before one is.

To hear about them, talk to two or three agents who work in the area you want. Check first that each one is licensed, which you can do with the DLD's "Licensed Real Estate Brokers" service on its website. Then be direct, and ask:

• "I can move quickly. Do you have a seller who must sell by a certain date?"
• "Which paper shows that date?"
• "Is there a mortgage on the home? May I see the bank's liability letter?"

That last question matters. The liability letter is the bank's statement of what the seller still owes. It also tells you how low the price can go, because the seller cannot accept less than the debt without adding cash.

A deal that reaches you privately can make you check less. Check it just the same. The agent's fee is usually 2% of the price plus VAT, and you can negotiate it.

5. Off-plan resales

The last place is the one with the most real pressure in it. Off-plan means a home that is sold before it is built, and the buyer pays the developer in instalments over several years. Our guide explains what off-plan property is. Some buyers reach a large instalment and cannot pay it. So they sell the contract to someone else before the home is finished.

They will often sell at a loss, and the law explains why. If a buyer stops paying, the developer can cancel the contract and keep part of the money. In a project that is more than 60% built, the developer may keep up to 40% of the value of the home.

For example, a buyer agreed a price of AED 1.5 million and has paid AED 600,000:

• If they stop paying, they could lose all AED 600,000.
• If they sell the contract for AED 1.35 million, they get back AED 450,000 and lose AED 150,000.

That is a seller with a real reason to accept less. But look at what you take on as the new buyer:

You pay the seller now, and you still owe the developer every instalment that is left. So before you agree, get these answers in writing:

• From the agent: "What was the original price? How much has been paid? What is still owed, and on which dates?"
• From the developer: the statement of account, which shows the same figures officially.
• From the developer's sales office: what it charges today for the same layout. If that is less than your total, the contract is not a bargain, whatever the advert says.

The developer also has to approve the change of buyer, and many ask for 30% to 40% of the price to be paid first. The DLD then records you in Oqood, its register for homes that are not yet built. Our guide to off-plan payment plans explains the instalments.

How to Check if a Distress Deal in Dubai Is Real

An advert that says "distress deal" or "below market" proves nothing, because anyone can write those words. What counts is what similar homes in the same building really sold for. The Dubai Land Department lets anyone look that up, free and without an account.

1. Open the DLD's [real estate data page](https://dubailand.gov.ae/en/open-data/real-estate-data/) and use the Transactions tab.
2. Search the area for sales in the last six months.
3. Keep only the sales in the same building with the same number of bedrooms and a similar size.
4. Compare the price for each square foot. Work it out for the advert, and compare it with the middle sold price for each square foot.

If a seller pushes you to pay before you have checked, stop: that is one of the common property scams in Dubai.

Read the full guide: how to check property value in Dubai, step by step

What Is Different When You Buy a Distressed Property in Dubai

Buying from a distressed owner follows the same steps as buying any resale home in Dubai. Our guide on how to buy property in Dubai takes you through those steps, so we will not repeat them here. There are also guides to the costs and the documents you need.

But a seller with money problems brings three extra things that you have to deal with:

1. The seller usually still has a mortgage, and it must be paid off on the day of the transfer.
2. The service charges on the home may be unpaid.
3. A tenant may be living in the home.

The seller's mortgage

Most distressed sellers still owe money to a bank. That loan has to be cleared on the day the home is transferred to you, which means your money does not all go to the seller. You bring three bank cheques:

• one to the seller's bank, for the amount still owed
• one to the seller, for the rest of the price
• one to the DLD, for its fee

For example, on a price of AED 2,900,000 with AED 1,800,000 still owed, the price is split like this:

Once the bank has its money, it issues a release letter, and the DLD completes the sale only when it has that letter. So before you sign anything:

• Ask for the bank's liability letter, which shows exactly how much is owed, and check that it is dated this month.
• If the debt is bigger than your price, ask the seller in writing how and when they will pay the difference.
• Agree in the contract who pays the DLD's release fees (AED 1,290 plus AED 315). The DLD does not say.

Unpaid service charges

Service charges are the yearly fees that every owner pays for the upkeep of the building. An owner in trouble has often stopped paying them.

This can stop your purchase. The developer has to approve the sale, and it will not do so until the charges are paid. Without that approval, the DLD cannot register the sale. So do two things:

• Ask for a service charge statement that shows what is owed today.
• Write into the contract that the seller clears it before the transfer.

Our guide to Dubai service charges explains how they work.

A tenant in the home

Some distressed homes are cheap because someone is renting them, and that person does not have to leave when you buy. Dubai's tenancy law says a change of owner "does not affect the Tenant's right to continue to occupy" the home, as long as the tenancy contract has a fixed term.

An owner who wants a tenant out must give 12 months' written notice, through a notary or by registered mail. So before you make an offer:

• Read the tenancy contract, and note the end date and the rent.
• If you need to move in soon, have it written into the sale contract that the home will be handed over empty.

Three questions before you pay a deposit

Put the three together, and you get a short check to run before any money moves:

Our guide on how to spot and avoid property scams in Dubai has the full list of checks.

How to Negotiate the Price in a Distress Deal in Dubai

A seller who needs to sell quickly has less room to argue, but only if you arrive with facts. You already have them: the recent sold prices from the building. Those prices are your whole argument, so build the negotiation around them:

1. Decide your highest price before you speak to anyone. The middle sale price is a sensible limit. Write it down.
2. Make your offer in writing, with the sales in it. The seller can check every number, which makes it hard to refuse.
3. Ask about the deadline. Is there a mortgage, and may you see the liability letter? It shows the lowest price the seller can accept.
4. Get everything into the sale contract. A promise counts only when it is written there.

A written offer can be as short as this:

"Three flats of this size sold in this tower in the last six months. The prices were AED 2,820,000, AED 2,900,000 and AED 3,400,000. I offer the middle price, AED 2,900,000. I can pay in cash and transfer within 30 days."

If the seller will not lower the price

Ask for something else. Three things are worth money to you:

• A share of the DLD fee. The buyer usually pays the whole 4% DLD fee, but the law's starting point is 2% each, by agreement. So offer to pay the seller's price if the seller pays their 2%. On AED 2,900,000, that is worth AED 58,000.
• A lower agent's fee. There is no legal limit on it, so ask before the viewing.
• Speed. If you can pay fast, say so. A seller with a deadline will often trade price for speed.

When to say no

Expect some pressure in return. "Another buyer is coming today" is the usual line, and you cannot check it. You can check the sold prices. So the answer is: "My offer stands until Friday."

And say no to the deal itself in these three cases:

• Nobody will show you the papers before a deposit.
• You are asked to pay anyone other than the seller, the seller's bank, the DLD or the developer's official account.
• The only reason given for the price is hurry, and there are no recent sales to compare.

For a low price without the rush, see the cheapest property in Dubai. For the whole purchase, start with buying property in Dubai.