Your Personal Guide to Buying a Condo in the Philippines
Real estate in the Philippines has experienced a considerable growth in the past years. According to the local affiliate of Savills, a London-based real estate services provider, the real estate market in the Philippines would continually become the one of the most attractive in Asia, given that the country’s economy has experienced substantial growth. According to an article by Darwin Amojelar in interaksyon.com, the economy in the Philippines has increased by 7.2% last year, up from 6.8% in 2012. This year, the Philippine government is making it a goal to achieve an economic growth of 6.5 – 7.5%.
The real estate industry in the country continues to boom, for the most part, due to the contributions of the income pull-in of Filipino overseas workers to the Philippine economic growth. According to an article by Gerardo Sicat in philstar.com, the continuous influx of overseas remittances of Filipino overseas workers has increased the living standards in the country. Overseas remittances became income flows that were used in investment spending of many Filipino households.
One of convenient housing ways that Filipinos prefer is condo living. Condominiums in the Philippines provide the comforts of urban living and a guaranteed living security in one package. According to an article by Michael Tan in The Philippine Daily Inquirer, purchasing or renting a condo is affordable to upper and middle class families and individuals in the country. If the Philippine government will provide low-cost condos, in partnership with the private sector or by itself, expect an increase in the number of Filipinos who will learn to live in the sky.
As the popularity of living in a condo skyrockets, so does the need for an informative and detailed guide on how to buy the best condo unit. As a potential condo buyer, you need to be careful in following the corresponding steps when you make a decision to buy a particular condo unit. Learning from professional real estate consultants helps in making you get a clear overview of the step-by-step process in buying a condo.
Discuss the contract before signing it.
Sit down and discuss the contract in detail with your developer’s agent before making a condo purchase. Make sure that you agree with the duration of the contract. You have to be sure that you would not find that the duration of the contract either too long or too short. Be clear to your agent when discussing the specificity of your preference of the duties that your agent would owe you, such as loyalty, full disclosure, and obedience. You would not want to encounter these problems in the future, and bear with the inconveniences. Usually, agents customize their duties in order to establish and maintain a healthy business relationship. Take advantage of this opportunity by bringing up this topic to your agent.
Agree on a clear-cut fee closure on the amount that you would need to pay to your broker or developer. Negotiating the final fees is mostly possible, depending on the developer of the condo that you will purchase. In the Philippines, many developers agree to fees negotiation upon the discussion of the purchase contract. Ask your agent about the fees negotiation that you can avail of when you have made the final selection on the condo you wish to purchase. When everything is in order, you may proceed to the signing of your contract.
Make the down payment on your condo before you move in.
Discuss the modes of payment with your agent before you make any payments for your condo purchase. Review the down payment policies your developer may have on association dues. This avoids confusion and misunderstanding for both you and your agent, thus avoiding future financial and legal problems. In the Philippines, the modes of payment usually depend not only on the developer that you signed up with, but also on the location of the condo you purchased within the country.
Because city life is bustling around the metropolis, condos around Metro Manila have more restricted policies with regard to the modes of payment of condo purchases. For instance, condominiums in Taguig mostly follow the rule of a 2 months advance, 1 year deposit policy. Nevertheless, condo buyers may opt to pay in post-dated checks, at their convenience.
Likewise, for condos in Makati and Manila, upon purchase of the condo, you would usually be required to make a 20% initial deposit. The terms of payment in condos at these metropolis areas provide flexibility and payment conveniences. Many developers in the Philippines now make it easy for every individual to own a condo. Now, who says city living can be hard for the average families and individuals in the country?
Avail of a housing loan, if needed.
It is perfectly understandable if you would be having a hard time paying for your condo. This does not need to become a problem and hinder you from buying or investing in the condo of your dreams. Pag-IBIG housing fund now provides easy to avail loans that can be paid in flexible terms. Dividend earnings in 2012 of the Pag-IBIG Home Development Mutual Fund capped at 4.17%, crediting P9.28 billion, without any tax charges to the accounts of Pag-IBIG members, the fund announced. This made it easier for Filipinos to avail of a housing loan to buy a condo in recent years.
If you are worried about the risk of not being able to pay off your loan in a timely manner, you may want to consider renting your purchased condo for a short period of time to generate additional income. The condo rental market in the Philippines is particularly on the rise, with many college students from the rural areas renting a condo in Metro Manila while pursuing their studies. In an article blog written by AJ in numbeo.com, statistics showed that most college students allocate 29.4% of their monthly expenses on condo rental.
If you are unsure about renting out your condo to first-time renters, you may want to consider getting referrals from family and other loved ones of renters who you can trust in making timely payments and abiding by the terms of the contract. This is a sure way to go if you wish to avoid encountering renters who do not pay their fees, making you lose more money in the long run.
Remember that the condo turnover process of your unit to your renter is something that you will only be seeing temporarily. Once you reclaim your condo, you would enjoy the fruits reaped from the hard work that you have placed in buying it. This would make you realize that making a loan to buy a condo is all worth it.
Hire a competent attorney to make the legalities final.
You need to get an attorney’s notarization on the final copy of your condo purchase contract to make sure that everything agreed upon is legal and binding. Doing this avoids putting you at a disadvantage in case disputes and/or misunderstandings arise. Make sure, though, that you hire a reputable attorney who knows what he is doing. Present a witness or two, if possible, for additional legal security.
Although condo buying has become more affordable for many Filipinos nowadays, your positive condo buying experience would still depend on many factors. Choosing the best real estate developer in the Philippines is among the leading factors that can either make or break condo buying for every Filipino. Therefore, you need to carefully study the developers’ reputation and appraisals for previous projects in the country before deciding on which developer you should sign up for. It won’t hurt to ask for referrals and recommendations from family and friends, either.
Condo buyers need to concentrate in following the processes when buying a condo to avoid wasting money, time, and effort. Asking questions helps in clarifying confusing details. Working closely with the agent and every concerned department of the developer helps in deviating from committing mistakes.