Buying a condo for sale can be a worthwhile investment you can make. As your future home, you’ll love and enjoy the exclusive, modern lifestyle it offers. You will also appreciate the convenience of living in an integrated community.
Investing in a condo for sale in the Philippines can be one of the best deals you’ll make, at least in Southeast Asia. And despite the economic slowdown this year brought by the global health crisis, the Philippine market is expected to rebound next year. One study projected an 8-9 percent increase in the economy by 2021, with ADB forecasted GDP to recover by 6.5 percent next year. Plus, the value of your condo property will continue to appreciate, more so if it is located in a strategic location.
But where do you begin, especially if it is your first time? If you are deciding on buying a condo for sale in Metro Manila, for example, we have come up with a complete beginner’s guide to condo buying in the Philippines.
The Planning Stage
Buying a condo for sale in the Philippines requires planning and research. You need planning to ensure you are prepared for every step of the condo-buying process and information about the property you are planning to invest in, your financing options, and even your plans on the property after signing the sales contract.
Here’s a quick checklist on what you need to do during the planning stage:
1.Determine your condo requirements.
What type of condo that best suits your needs? A condo for sale can be two things: a pre-selling condo or a condo property that is sold before completion or during the construction of the said property; or a ready-for-occupancy or RFO condo, which is a condo you can easily move and live in immediately after buying the condo.
Also, will you go for a studio, a one-bedroom, or a two-bedroom condo for sale? Most property investors go for studios as it is more affordable and can be marketed easily to students and working professionals.
Now the next step to consider is the type of development that’s convenient for you. A condo for sale in a mid-rise building offers more privacy. Starter families tend to eye one to two-bedroom condos or properties in mid-rise developments. High-rise towers tend to have a higher unit density per floor and have all the amenities needed to complement the lifestyle of its residents.
You also need to know your timeline. If you are investing in a condo for sale for rental income purposes, you need to know how long will it be okay for you to use the profit you earn towards your mortgage until you earn enough capital gain. If you are planning to invest so you can flip the property, you need to commit to a period of time during which you’ll need to maintain the property (and keep paying expenses like taxes, utility bills, housekeeping) during idle months until someone is interested in buying it up.
2. Determine your budget and payment options.
The most important item in your guide to condo buying is the part where you determine your budget. If you already have certain real estate projects in mind, this next step will help you narrow down your choices. Moreover, you will need to apply for a housing loan. Condo investors usually secure the remaining balance through bank financing or in-house financing. Whichever you choose, you can inquire in advance to determine how much will your preferred lender cover, and how much lead time will you need to get approved. Some developers have strategic partnerships with certain banks, which means fewer documents are required to process a home loan. Banks, on the other hand, are stricter and will require additional proof that you can pay. The Pag-IBIG housing loan program allows its members to purchase a condominium unit through a series of installments.
3. Find out your property non-negotiables.
After knowing your financial capacity, you will know later on which condo requirements you are willing to compromise and which ones are non-negotiable. If you have a flexible budget, for example, you may want to consider investing in a real estate development in a better location or with health and wellness amenities. If your condo unit does not come with a parking lot, you may also want to also invest in one. You may also want to have a property that offers an unobstructed view of the city or is away at least from major throughways.
4. Discover the neighborhood like a local.
Residential condo units located in integrated communities will be more in-demand, more so because of the amenities and features that complement the “theme” of the project. Moreover, you would also want to discover your future neighborhood’s foot and vehicle traffic, the surrounding establishments, and proximity to places that are of interest to you.
5. Check out the developer’s and your agent’s reputation.
When shopping for a condo for sale in Manila, for example, it is best to look for properties from a developer who has a solid track record and portfolio when it comes to developing integrated communities.
Transact and negotiate with a licensed practitioner. Aside from checking their credentials, you can also inquire about past sales and clients.
The Execution Stage
For the second half of our beginner’s guide to condo buying, this is where the real work begins. You need to have the patience, resilience, and perseverance to follow through until you have reached your property buying goal.
1. Search for condo properties according to your investment requirements.
Nowadays, there are websites dedicated to real estate projects and real estate listings. If you type, say a condo in Taguig or a> condo in Tagaytay, results will display all properties under those search keywords, right to the contact details of the agent representing the property.
Other sites will take a step further by providing details about the neighborhood like a community overview, location map, number and type of establishments in the area, and more.
2. Ask questions that are not on the property description.
Your real estate agent will be the best person to address these questions to you. But what kind of questions should you be asking your real estate agent? In this guide to condo buying, you’ll have an idea of what questions should be asked.
Here are some of the things you should ask your agent:
Ask about house rules, especially on unit improvements
Ask about association costs
Ask about property management
Ask about the deed ownership process and costs associated with it
Ask about the community demographic
Ask for a 5-year infrastructure plan of the location
Some investors go the extra mile by hiring an inspector or structural engineer to check the property. While this may cost extra, it is a necessary step for high-end condo properties.
4. Work with your agent for a housing loan.
Most condo developers recommend getting a bank loan. While there is an option for you to avail in-house financing, it is not recommended as interest rates are higher ranging from 16 to 19 percent. Foreigners or non-permanent residents who wish to invest in a condo for sale in the Philippines can pay the property via cash or in-house financing only. If you are one of the two and would like to seek a bank loan, you will need to comply with certain requirements like the number of years of residency or securing proof that you have familial ties who are Philippine residents with good credit standing.
Whatever housing loan option you choose, you need to make sure that all paperwork and payment arrangement are accomplished to avoid delays or future payment default.
5. Secure and review every legal document.
Buying a condo is a huge investment to make, so you need to make sure that your investment is well-documented.
When buying a condo, you will encounter at least five (5) legal documents, namely:
1.Intent to Purchase Real Estate document or Letter of Intent – while this is a non-binding document, this details the tentative terms and conditions regarding the total contract price, initial deposit placed on the property for reservation, and financial details.
2. Contract to Sell– a legal document that binds you to all final terms and conditions of buying the condo for sale. This document is issued right after the 20% downpayment is completely paid.
3. Deed of Absolute Sell– a notarized document created and filed with the Register of Deeds that legally transfers ownership rights to you as the new owner. This is issued right after full payment of the condo’s total contract price and other fees have been settled.
4. Condominium Certificate of Title – a legal document issued by the Register of Deeds detailing that you are the new owner of the condo you purchased.
5. Tax Declaration– a legal document issued by the City Assessor’s office. This document is proof of the successful transaction of your condo purchase.
On the hunt for your next real estate investment? Follow our complete beginner’s guide to condo buying to get started. If it gets tough, remember that your effort will be worthwhile. With condominium projects to pick from in Metro Manila, Tagaytay, Bacoor, to Las Piñas, you will find something you are looking for at COHO by Vista Land.