Procedures for Buying Real Estate Property in the Philippines
The growth of real estate market in the Philippines has been increasing in the recent years. More people are buying properties. When buying a new property, it is important to look for properties guided by trusted developers and homeowners and licensed and trusted real estate agents/brokers, especially in the case of pre-selling properties.
Here are the tips every buyer must remember before buying a real estate property in the Philippines.
First and foremost, you need to know the type of property to buy. Will it be for your family, a rest house, business or investment?
Consider the specifications of the property. Choose a location at your convenience. Do you need a condominium, house and lot or lot only? How many bedrooms? Do you need a car garage? Write down your specifications so that it will be easy for you to choose a property that best matches your needs and preferences.
Secondly, estimate when you can move-in? Do you need a ready for occupancy property so you can move-in immediately or settle with pre-selling property instead? This will help you determine how much money you need to raise.
Consider the four home financing options available in the Philippines. Evaluate your loan options and compare the interest rates and mortgage payments for the property you wish to buy.
Thirdly, it is time for you to look for trusted real estate professionals. Ask your family and friends for suggestions.
After that, ask the real estate agent to schedule a site tour for you to evaluate the property and community. Ask for a sample computation which shows the total price, interest rate, reservation fee, down payment, loanable amount, financing options and monthly amortization. Moreover, ask for the transfer and miscellaneous fees involved in the payment scheme. Make sure to ask your agent with everything that is unclear to you.
Fourth, if you are comfortable with the property and its payment scheme, you can pay the reservation fee. The reservation fee is usually deductible either to the down payment or total contract price, which allows your more time to process the requirements for the financing option you choose.
Fifth, complete the requirements for your home loan. These include, certificate of employment (COE), pay slips for the past 3 months, recent ITR (income tax return), community tax certificate, photocopy of government issued-IDs, and home loan application form.
Next, you will be required to sign contracts and other documents related to your property purchase. Read and understand the contract well before signing it. Make sure you understand everything that is stated in the contract. Ask your agent for any clarifications.
Lastly, when everything is put into place, collect the proof of ownership. These include the Contract to Sell, Deed of Absolute Sale and Certificate of Title. After that, you will pay the taxes and clearance fees before you will be issued of Title Certificate by a court. The amount of transfer tax is usually 0.5% of the total contract price, however it all depends on the location and type of property.
Equally important, make sure that the Certificate of Title is legitimate. They will be issued in duplicates—the original one will be handed to the owner and the duplicate copy will be submitted to the Registry of Deeds.
These steps will require you to go back and forth to government agencies. In addition, the whole procedure could take several weeks or months to complete. The process requires a lot of constant follow-ups with the government agencies. Sometimes it is necessary to personally visit the agencies for follow up to speed up the process.
Buying a real estate property in the Philippines is a long and tedious process but with the help of trusted and reputed real estate agents/brokers, your property buying experience will be easier. Always remember that home ownership must be transferred immediately before buying a property to avoid problems and paying a large penalty for late transfer.
Considering to buy a property? Contact me for free and further consultation.