Five Basic Requirements When Buying a Property
Pick one and pay, how we wish it was just that easy, but the reality is, buying a house needs to be done legally. I often get complaints about the requirements a client must prepare when buying a home. Whether it’s a house and lot or a condominium that you wish to purchase in the Philippines, you will be required to gather these things and provide to the developer.
Often times, we get these complaints from OFWs or citizens from other countries either former Filipinos or Foreigners. To set the expectations, these requirements are government-mandated or mandated by the Philippine laws that all citizens and investors of the country should and must follow. Most especially, if you intend to borrow money from a financial institution to fund your purchase.
Here are the five basic requirements you need to prepare if you are buying a home;
1. Two-valid Government-issued ID’
Prepare and bring a photocopy of this government-issued ID’s with you during the reservation of the property. This is to make sure the proper documentation of the purchase. Each ID’s should match and contain your real complete name.
For married couples, your spouse is also required to provide all the listed requirements. Unless otherwise if you have a pre-nuptial agreement (document) that prohibits your spouse from co-owning the property you are about to purchase. If you’re a widow or widower, you may be required later on to provide additional documents like the Death Certificate of your spouse as legal proof.
If you are legally separated, you will also be required later on a proof of the Finality of marriage. However, if you are not legally separated (complicated status), you will be assumed and will remain married in the eyes of the law, thus will require documents of the spouse, regardless of the signed waiver of rights or number of years apart.
2. Tax Identification Number(s)
Make sure to bring your TAX IDENTIFICATION CARDS with you with the TAX IDENTIFICATION NUMBER. You will be required to request the TIN Verification Slip issued by the Bureau of Internal Revenue (BIR). Make sure that the name in the TIN Verification Slip is the same as your legal name.
If you are in a married status, Make sure you already changed or updated your marital status with BIR. If married, your record should state your married name in the record, unless you chose to still use your maiden name in a married status. [Because females/ladies, have the option to not change their maiden surname to their husbands’ surname name; but it should be consistent with all submitted documents.
Purchasing a property is taxable, thus TIN is required. The records of the property you will be purchasing will be attached to your TIN for proper accountability. Some developers require TIN prior to the reservation process. Some developers will allow you to apply for TIN later on, most especially for the OFW’s or the foreign investors. However, you cannot own property without a TIN.
3. Proof of Income
Bring at least 3 months’ worth of payslip or a Certificate of Employment with Compensation if you are locally employed. If you are an OFW, a copy of your latest Job Contract will do. This is for pre-qualification for your home loan. Your agent and the developer will need to make sure that your household income is sufficient for the property you are eyeing to purchase.
If married, both spouses will provide proof of income to complete the household income. If you are a FREELANCER or Online Worker, Click this article to help you out with generating your proof of income.
4. Proof of Billing
Bring a copy of your electric bill or phone bills registered to your home address or address where you wish your home loan notices and other purchase notice will be sent. This document is also required to make sure that we will be tagging the right address of the purchaser or buyer in the Contract to Sell, Deed of Sale, Title and other documents necessary for the legality of the purchase.
5. Reservation Fee or Option Fee if pre-selling; Earnest Money for brokerage sale.
Bring the required reservation fee or option fee of the property you wish to purchase. You can bring cash or check for the reservation of pre-selling properties.
For brokerage properties, the earnest money is required to show great interest in the property. Earnest Money can be cash or check and is deductible to the total selling price if the buyer decides to complete the purchase. However, just like reservation fees in pre-selling, if the buyer decides to not continue the purchase the reservation fee or earnest money is non-refundable.
Why do you have to prepare these things?
Whether you are buying spot cash or loan it from a financing institution, you will need to present these documents (1-4) for proper documentation of the purchase. Details of these documents are needed to make sure that the title of the properties will be transferred to the right person/buyer and that taxes will be paid accordingly.