The Real Estate Buying Process in the Philippines

The real estate market in the Philippines has been booming in the recent years. More people are purchasing houses. When buying a new property, it is important to look for properties backed by established developers and licensed real estate agents/ brokers, especially in cases of off-plan or pre-selling properties. Here’s a guide on the real estate buying process:

Step 1: Decide on the type of property to buy

First and foremost, you need to know the purpose of the property you plan to buy. Will it be a place for your family to stay, a vacation house, for your business, or investment?

You also need to decide on the specifications of the property. Choose a location. Decide if you need a condominium, house and lot, or lot only. How many bedrooms? Do you need a garage space? Do you prefer a lawn? Do you intend to renovate in the next few years? Write down your specifications to help you choose the property that best suits your needs and preferences.

Step 2: Calculate how much you can afford.

Estimate a move-in date. Do you need a place that’s ready for occupancy, or can you wait for a couple more years and settle with pre-selling properties instead? This will help you determine the amount of money you need to raise.

There are 4 home financing options available in the Philippines. Analyze your personal cash flow. Evaluate your home loan options. Compare the interest rates and mortgage payments.

Step 3: Contact a licensed real estate agent or broker.

In the Philippine setting, property developers have a roster of brokers or agent to sell properties on their behalf. Look for real estate professionals who you already know and trust. Ask your family and friends for recommendations. You can also choose from the list of approved Filipino Homes agents near you or the property you intend to buy.

Schedule a site tour and evaluate the quality of construction, the size or the property, and the neighborhood. Ask your agent to have a sample computation, which should show the total contract price, interest rate, down payment, reservation fee, loanable amount, and the monthly amortization. Study the legal, transfer and miscellaneous fees involved as well. Clarify with your agent if there is anything that unclear to you.

Ask about the amount and payment scheme of the down payment. Developers usually require up to 20% downpayment payable up to 24 months.

Step 4: Pay the reservation fee.

If you are comfortable with the computation, you can pay the reservation fee to the developer. (TIP: Make sure that your monthly payment does not exceed 30% of your gross monthly income.)

The reservation fee, which is deductible to either the down payment or total contract price, allows you more time to comply with the requirements for the financing option you choose.

Step 5: Complete the requirements

Turn in the requirements for your home loan. These may include accomplished home loan application form, photocopy of government-issued IDs, community tax certificate, recent ITR (income tax return), certificate of employment, and pay slips for the past three months.

You will be required to fill out and sign contracts and other documents. Read the fine print before signing anything. Make sure you understand and in full agreement with everything stipulated in the contract.

Step 6: Collect proof of ownership.

As soon as everything is in order, you may collect the important documents as proof of ownership. These are the Contract to Sell, Deed of Absolute Sale and Certificate of Title or Condominium Certificate of Title.

You will need to pay the taxes and clearance fees before the Title Certificate is issued by a court. The amount of transfer tax is usually 0.5% of the total contract price, but this depends on the location of the property.

Ensure that the Certificate of Title is authentic. Titles are issued in duplicates – the original copy will be handed to the owner and a copy will be submitted to the Registry of Deeds.

Home ownership can be a long and daunting process. With the help of trusted real estate professionals, your property buying experience can be easier and stress-free.