BUYING A NEW HOME
Buying a home can be a nightmare especially for the first time buyer. You will experience a roller coaster of emotions while dealing with self-serving brokers, finding the right place, securing the loan and finally moving in. For most people, the first time home purchase is the largest investment ever considered. The emotions of purchasing something so expensive and personal can often blur our business judgment. Most home purchasers do little or no research before they make their investment. They are often at the mercy of over-eager brokers whose primary consideration is to close the sale and collect their commissions fast. These "Buying Tips" are designed to help avoid common and crucial mistakes.
Inspect, Inspect and Inspect - Go over everything with an eagle's eye. Detect what lies under the surface of the seller's presentation. Make sure the report was done professionally. As applicable, go over the By-Laws and Association Fees. Don't take anything for granted! Imagine the Property Vacant - Your furnishings and decorations will be the ones filling this new residence. Don't be swayed by beautiful furniture; most of the time it leaves with the owner.
Income + Lifestyle = Mortgage Payment - Sit down with your accountant if necessary and honestly discuss your income level and living expenses. Take into account future considerations, children, add-ons, amenities, and fix-ups. Your dream home is certainly worth a sacrifice but don't mortgage your entire future. Remain within reasonable budget.
View Several Homes - See several properties before you make your purchase. With your broker's help you should be able to view enough properties to get a good perspective of the home market. When you find the right property, all the hassles will be well compensated.
Utilize Your Team - By aligning yourself with the right real estate team, you will have an entire team at your disposal.
Agreements should be in writing - All promises and discussions should be in writing. Don't make any assumptions or believe any assurances. Even the best intentions can be misinterpreted. Have your broker keep an ongoing log in writing of all discussions and get the seller's written approval on all agreements.
House Hunting - Before house hunting, make a list of things you want in the new place. Then make a list of the things you don't want. You can use this list as a guide to rate each property that you see. The one with the biggest score wins! This helps avoid confusion and keeps things in perspective when you're comparing dozens of homes.
Style And Substance - When house hunting, keep in mind the difference between "STYLE AND SUBSTANCE.' The substance are things that cannot be changed such as the location, view, size of lot, noise in the area, school district, and floor plan. The style represents easily changed surface finishes like carpet, wallpaper, color, and window coverings. Buy the house with good substance, because the style can always be changed to match your tastes.
Advertisements - Ads are created to make the phone ring! Many of the homes have some drawback that's not mentioned in the ads. What's not mentioned in the ad is usually more important than what is.
Vigilant - Remember that the person writing the ad is representing the seller, or himself. The most important thing you can do is have someone on your side looking out for your best interests. They will critique the property with an eye towards how well it meets your needs and will point out any drawbacks you should know about. Pick an agent you feel comfortable with and enlist the services of that agent as a buyer's broker.
10 TIPS IN BUYING A PROPERTY
How often do we hear someone say: "My dream is to own a home." "I would be happy and contented owning a small house and lot." This is the simple Filipino dream. Concurrently, the measure of one's success is determined by how many pieces of real estate he owns. Truly, for a Filipino, real estate ownership is the barometer of his achievement. It may also be the cause of his downfall, if he does not buy correctly. The typical Filipino mentality in home buying is that the first home he buys should be his dream home and that is where he is going to stay until the day he dies. If you are looking for the key to money-wise home ownership for the coming decade, keep this rule in mind: When you buy, make sure you buy with an eye to resell, sooner rather than later. This means that if you are a smart consumer, you'll look at any house you're buying with a view to its resale-ability at maximum gain, probably within the next five to seven years. Even if you don't sell within the average time frame, you will find this buy-to-sell perspective will bring you sounder investments. Simply explained, the first home you buy does not necessarily have to be your dream home. You can use this first purchase as a stepping stone to eventually buying your "castle"? The important thing is for you to make that first step into property ownership: buy with the intention of selling later, and then buy again a much bigger one, until you reach your dream. Here are some basic rules to consider to make this principle work for you:
Rule 1: The most important general principle in house-hunting is - location, location, location. Your home's location within the community will be the most important controller to your resale profit. Good schools, proximity to shopping and transportation, and accessibility to the central employment area are factors that make location favorable. A home purchase is the largest investment most families undertake. When you settle in the community of your choice, you gain a stake in its future, its plans and problems. You will develop a sense of responsibility and pride in home ownership and, with your neighbors, will have a strong influence on the growth of the community. If you choose a home in the heart of the metropolis, you'll enjoy close proximity to shopping areas and convenient transportation. However, you may want to check on noise and pollution levels. Life in a quiet subdivision, which is a little further away from the metropolis, offers a lot more room in peaceful surroundings, but this may require longer travel time into the city. Take time to weigh all the possibilities before you reach a decision to purchase a home in a particular location.
Rule 2: After you have determined the best location for you, the next important factor to check when buying a house in a development project, is to check out the reputation of the builder or developer. Don't take other people's words on builder excellence. Check for yourself. See as many houses he has built or projects he has developed. Look around for sloppy workmanship, such as rough edges, unfinished carpentry areas, poor plumbing facilities. If you are buying in a development, talk to other homeowners in that development and ask if they have any problems in their houses and community. Are their houses basically sound? Do they have ample water supply? How is the security in the area?
Rule 3: Choose a house whose architectural style places it safely within the mainstream of your area and price range. Highly personalized and dramatic architectural structures may take more time to re-sell later on as you may have to find a buyer with the same personality and tastes as you.
Rule 4: If you are buying an older house, be certain that your house has, or will when you've finished renovating it, the value added features considered essential for your location and price bracket. Among these may be an additional bathroom, bedrooms, a carport for at least one car.
Rule 5: Avoid the big value losers. A swimming pool may be a status symbol for you but for a maintenance-conscious individual, this may become a liability for resale rather than an asset.
Rule 6: Another consideration you should take is how you are going to finance the purchase. For those who are going to pay the whole amount in cash, there is usually no problem because they will buy or build up to the amount of money they have set aside for the purchase. On the other hand, for those who intend to finance their purchase, the most important thing to remember is - do not over-extend yourselves. In simpler words, do not borrow more than you can afford to pay in monthly amortization. The saddest thing to see is losing ones? home to foreclosure. The rule of thumb in financing is your monthly amortization payments should not exceed 30% of your family income per month. Of course, each lending institution will have their qualifying requirements, so I suggest that you visit your bank and get yourselves pre-qualified first before you start your home search. If you know your qualifying limit, then you will stick to viewing only the homes in your price range. The wise and prudent buyer will pick the best looking house in his price range, and then move up to a better one later using the equity build-up and appreciation from the re-sale of the old house.
Rule 7: Be prudent in buying or investing in projects or developments being pre-sold. For me, buying real estate during the pre-selling stage is like investing in an idea. It is intangible, just like anything that cannot be appreciated using the five senses, and may just evaporate into thin air. In a normal market, property appreciation is based on supply and demand. In a boom market, speculating in pre-selling may seem attractive because one thinks he is buying at a lower value. But more often than not, this is an artificial property value because it is based on appreciation dictated at whim by the developers. The real estate market will always seek its normal levels, and when this happens, investments made based on artificial value will crash. You would not want to see yourselves in the middle of the debris. Don't get me wrong. I am not telling you not to make aggressive investments in real estate. I believe that real estate is still one of the most dependable hedges against inflation in a normal market, and it does a whole lot more in a brisk market. Let me illustrate further. If the rate of inflation today is 7%, it is more than likely that the rate of appreciation of your real estate property will go up at least 7% annually.
Rule 8: Determining if the price is right cannot really be formally documented by research unless you hire a licensed real estate broker or appraiser. But you can do some scouting around and find out what the going rate per square meter is in the area, and then determine if the property you are buying is at least within its fair market value range. A word of caution: It is always good to seek professional advice on this matter; you wouldn't want to rely on guess-timates, would you?
Rule 9: An educated consumer will realize the value of working with a licensed real estate professional - a formally trained and qualified agent to help him through the process of finding the property, handling the legal paperwork and details, getting the best financing option possible, and eventually closing the transaction. There is value to the peace of mind generated from using the services of a real estate professional. Commissioning a knowledgeable agent will save you time, provide a greater selection of properties to choose from and will make the buying process less stressful.
Rule 10: Although RNV has taught you prudence in the home search, please use your heart too. Remember that the home is where the heart is. No matter how well planned your purchase is, but if you're not happy with your choice, all your preparations will have been in vain.
CHECKLIST BEFORE BUYING REAL ESTATE IN THE PHILIPPINES
Here are tips a buyer must remember before buying any property in the Philippines, specially if you are buying a single property from an individual:
1. Make sure the "Transfer Certificate of Title" is authentic.
The easiest way to check if the title to the property you are buying is authentic is by getting "Certified True Copy" of the title from the Register of Deeds. This office is usually located at the city or municipal hall where the property is located. Ask the seller of the property for a photocopy of the title -you will need the title number and the name of the owner to get a certified true copy of the title from the Register of Deeds.
2. Verify that title is clean - meaning the property is not mortgaged (no liens & encumbrances on the property).
You can see that at the back of the title with the heading "Encumbrances". This page must be empty if you are told that the title is "clean". But sometimes the space for the technical description of the property on the front page of the title is not enough and the description of the property is continued on the "Encumbrances" page, this is of course all right.
3. Make sure that the land described on the title is really the land that you are buying.
You can validate this at the Register of Deeds or by hiring a private land surveyor or a geodetic engineer. Land titles don't have any street name and number to pin point a property, it is a must to confirm that the actual property you are buying matches the technical description on the Transfer Certificate of Title.
4. Make sure that the sellers are the real owners.
If you are buying from an individual property owner, ask for identification papers like passport or driver's license, it is also a good idea to talk to the neighbors or the Barangay Captain to confirm the identity of the sellers (you might as well ask some history of the property).
5. Confirm that the yearly real estate taxes are paid.
Ask for certified true copies of the Tax Declaration and original Tax Receipts to confirm that real estate tax payments are up to date.
If the above check list is in order, it is generally safe to proceed with the purchase of real estate in the Philippines. Check out our properties for sale in Metro Manila and Calabarzon area at RNV Realty Co.