Here are six things you must remember when buying your first condo in the Philippines.
Your broker is not your friend. Unless you and your broker go way back (like childhood friends who grew up together), remember that brokers earn their keep by getting a commission out of your purchase. That special attention you are now getting will exponentially decrease to near zero the moment you sign your contract to sell. Make sure that you have all the information you want (and need) from your broker before signing. Once you sign it, your broker will move on to the next buyer.
Understand the payment scheme. Most developers offer various types of payment schemes for installment buyers. In choosing an installment plan, the payment scheme should match the flow of your income. Most developers will require you to fully pay a condo before you are allowed to occupy.
A payment scheme with low flat monthly amortizations typically means that you will be left with a huge balloon payment at the end of the installment term. Be wary of built-in balloon payments in your installment plan. Typically, you will need to make a payment (in addition to your monthly installments) at the end of each calendar year.
Before signing your contract to sell, ask your broker to breakdown your installment scheme and to give you a list of the amounts that you should pay every month.
There are other costs. Owning a condo means that you will become a bona fide owner of real property. Unfortunately, the costs do not stop upon full payment of the purchase price.
Your contract will normally state that you will shoulder the cost of taxes and of registering the title to your condo in your name. This should amount to no more than an additional 4% of the purchase price.
Condominium buildings will also charge monthly or annual association dues for the maintenance of the building. Costs will vary depending on the type of services and amenities available to residents, however, the broker should be able to provide you with a ball park figure.
Owning real property also means that you will need to pay for insurance and real property taxes annually.
There are rules. Your condo will be governed by a deed of restrictions. The restrictions will dictate what you can and cannot do when you move in to your condo. Ask for a copy of the master deed and restrictions of the project and read through it. If you are a pet lover, you should know if the building will restrict or even prohibit pet ownership. Some condominium buildings prohibit the use of LPG. If you plan on renting out the place, you need to know if the deed of restrictions will require you to course the leasing of your condo through an appointed exclusive lessor.
Location is key. You should verify the location of your building and your condo before signing a contract. Ask your broker to bring you on-site so you know the exact location of the building. Go there during rush hour traffic. Chances are, the estimated travel time in the brochure you have seen will not take into account heavy traffic. Remember that you will need to travel during rush hour and travel time to and from your condo should be an important consideration. If you are already looking at a specific development, pass by the location during heavy rains and check if flooding is an issue.
Apart from the location of the building, you should also choose the location of your condo within the building wisely. If you work a night and need to sleep through the day, pick a unit on the upper floors so you can isolate yourself from street noise. Units which are near the elevator or the garbage chute are cheaper for a reason – elevators opening and garbage plummeting down the chute make a lot of noise.
Always read everything. Yes, including the fine print. This is the most important rule of the lot. Good luck on your purchase!