Expert Advice: All about distressed properties in Dubai with John Lyons, Managing Director of Espace Real Estate
MyBayut is back with yet another exciting episode of our Expert Advice series where we talk to leading industry experts to gain valuable insights about property trends, consumer behaviour and more in the UAE real estate market. This month our very own Assistant Director of Sales, Chris Crawford connected with John Lyons, the Managing Director of Espace Real Estate over a Zoom call to get a better understanding about distressed property deals in Dubai and the rest of the UAE.
If you want to learn all about distressed properties for sale in Dubai and find out some of the main things to consider before either buying or selling a distressed property in Dubai, watch the complete interview below.
WHAT ARE DISTRESSED PROPERTIES?
According to John, a distressed property is like any other property for sale on the market. It becomes a distressed transaction when a seller really wants to and needs to sell the property, usually at prices which are lower than the market average. There is a certain level of urgency for such transactions, so unlike homeowners who are comfortable with waiting for the right offer, distressed sellers typically want to liquidate their assets more quickly.
HOW CAN A BUYER PURCHASE A DISTRESSED PROPERTY?
John mentions that buyers looking to purchase distressed properties in Dubai can either think of getting a mortgage or complete a cash transaction to gain ownership. However, due to the level of urgency that is usually associated with distress property deals, the seller tends to favour cash buyers because of the shorter turnaround time. This is because cash buyers can transact quicker than mortgage buyers who have to wait for appropriate approvals, valuations and more.
But John also maintains that obtaining a mortgage in Dubai can be quick and is usually dependent on the buyers’ profile. According to John, sometimes it can take up to 8 weeks for a buyer to get a mortgage. Cash buyers, on the other hand, can transact within a couple of weeks or less if they have the cash on hand. This is why a cash buyer always has an inherent advantage when it comes to distress deals of properties in Dubai or anywhere else in the UAE.
IS IT NECESSARY TO GET A PRIVATE VALUATION FOR A DISTRESSED PROPERTY?
When dealing with distressed properties in Dubai, a lot of buyers ask whether it’s necessary to obtain a private valuation. John explains that a private valuation is dependent on the way a buyer is financing the purchase. For a mortgage buyer, the valuation of a property is part of the process since a mortgage is issued on the purchase price or the valuation, whichever is the lowest.
This is not the case for cash buyers. A private valuation for a cash buyer of distressed property is only necessary if the prospective buyer wants to conduct some due diligence and find out the independent value attached to the property.
WHAT SHOULD BUYERS AND SELLERS KEEP IN MIND ABOUT DISTRESSED PROPERTY SALES?
Before buying or selling distressed real estate in Dubai there are a lot of things buyers and sellers should keep in mind.
John said that buyers should not feel pressured into making decisions faster than their due diligence process allows. Usually, with distressed sales, the seller needs to sell their property quickly. This is why buyers need to ensure they fully understand the opportunity at hand. John says: “Don’t be in a situation where you let the deal get in the way of good decision making.”
For sellers, John mentions that aggressively pricing their property is the best way to move forward but not to levels that are only favourable to the cash investors in the market. John says “You don’t have to go 20% below the market price to complete the deal. Any broker suggesting that’s what you have got to do so is probably not giving you the right advice.”
ABOUT JOHN LYONS
John Lyons is the Managing Director at Espace Real Estate and has over eight years of experience in the Dubai real estate market. He started off his professional career as a property manager for residential and commercial real estate before taking on a leadership role as the Managing Director of Espace Real Estate. He has extensive expertise on the brokering the sale of residential distressed property assets and has helped investors and buyers to identify excellent opportunities to acquire prime property units in the Dubai real estate market.
ABOUT ESPACE REAL ESTATE
Espace Real Estate is one of the top real estate agencies in Dubai that provides clients with a complete range of services for buying and selling residential real estate in the UAE. They have built a strong reputation in the Dubai real estate market by putting the customer’s needs first. Espace’s highly competent team of industry experts are some of the best in the city and can cater to a variety of property needs.
For buyers looking to take advantage of the prices of a distressed deal, here are some distressed properties for sale in Dubai listed on our website which you can check out.
That concludes this Expert Advice segment on distressed property deals in Dubai. Which topic would you like us to cover for the next instalment? Let us know in the comments below.
The views expressed in this article belong to the interviewee alone and does not reflect the opinions of Bayut.
