So you’ve finally saved up enough money to invest in your very own property, congratulations! Before you sign any binding document or dip your hands into your hard-earned money to buy a property, you must first entirely be sure you know what you’re getting yourself into. Finding the right property will be difficult (not to mention costly) if you don’t do proper research. Not because a house looks good in photos and in person, or the price is within your budget, or maybe even because it’s being sold by your oldest family friend, doesn’t mean you should go right ahead and sign off. To help you take that first step, we’ve collected some of the things you might not know about when buying a house:
IMPORTANCE OF DUE DILIGENCE
Exercising due diligence when buying a house, or any property for that matter is simply: doing your homework and research.
If buying from a real-estate developer, check whether they have a license and permit to sell the property. HLURB (Housing and Land Use Regulatory Board) is the government agency mandated to vet all these real estate developers and give them licenses to sell properties. If they’re selling a property but doesn’t have the license to, it’s your cue to say no.
You have to make sure that all legal documentation involved when it comes to ownership is either readily available or easily accessible. Whether you bought the property from a real estate developer or from another individual who bought it first, it is very important that proper documentation is thoroughly and meticulously checked. Not only is this for legal purposes, but it also saves you from the physical, emotional, and financial hassle of going through the entire process of applying for permits and looking for records.
For condominiums, one very important question to ask would be: is it perpetual ownership? For Houses and Lott: Is the title readily transferable? When it comes to construction, will there be any restrictions? Make sure all dates are correct, all legal documents are notarized and all requirements necessary to transfer the title to your name are complete, accurate and up-to-date. Your future self will surely thank you for not having to pay any late registration fees if your current self will check on these things.
FULL PAYMENT OF ALL TAXES AND DUES
All properties have dues to be settled – whether it be real property tax, association dues, or both. One of the topics commonly left undiscussed during negotiation are association dues. When you buy a property, it’s obvious that all subsequent dues have to be paid by you; but what about the dues that were incurred prior? Ideally, these should have already been settled, but in some cases, they are not and the new owners are left in shock.
Here’s an example to illustrate: Andrea* bought a piece of land in a subdivision from a seller who will be migrating abroad. They were able to negotiate the price and Andrea paid the full amount in cash. Andrea then wanted to have her house built in the lot she purchased so she inquired with the subdivision what the requirements are for a permit. Lo and behold, Andrea found out from the subdivision office that the land she purchased has unpaid association dues for the past 10 yrs, and if she wants the permit she needs to have her house built, she would need to pay for the arrears. So to save yourself from this, make sure to check all pending financial obligations and ensure that proofs of payment are given before taking the plunge.
CONDITION OF THE AREA ALL YEAR ROUND
When a property is being offered to you for purchase, chances are the agent will say all the good things about it – that it’s close to the market, mall, school, hospital and as it’s most Filipinos’ top concern: it’s flood-free. If you’re visiting during the summer months and there’s very little chance of rain, the chance of seeing the area flooded is very slim. Ask around the neighborhood if that’s the same situation come the rainy months of June to September and investigate if it’s really flood-free.
While you’re looking at the property, you may want to ask the people around if the nearby roads get flooded heavily and how long does it usually take for the waters to subside. Your house may be flood-free, but you need to be prepared in case you need to cross waist floodwaters to get to it.
AVAILABILITY OF UTILITIES
Utilities like water, electricity, internet, telephone and for some cable services are important considerations as well. You will be surprised at how some top subdivisions have very slow water currents that you need to install a water pump and tank to boost your supply. Some areas also do not have line provisions for Fiber internet connection so they might need to opt for slower connections. It wouldn’t hurt to ask this question, so why not clarify?
To sum up, here are some of the questions you might want to ask yourself as you make that decision:
Documentation – Are they complete, up-to-date, available and most importantly, easily accessible?
Ownership – Is it perpetual ownership?
Restrictions – Are there any restrictions in construction (e.g. only until 2F, etc.)?
Fees and Dues – Are all applicable dues and taxes paid in full and is it documented?
Condition – Has it been flood free over the last 10 yrs?
Utilities – Will the homeowner have access to basic utilities?
Remember, finding the right property isn’t difficult if you know the right questions to ask.