Shopping for a home?
WHETHER you’re buying your first-ever piece of property or upgrading one’s starter unit, there’s nothing like seeing the result of all that hard work. Sure, it may seem stressful and, if you’re a first-timer, definitely overwhelming. But the pride and accomplishment that comes with it makes it all worth it.
With developments emerging in various areas all across the country, there are many opportunities and options for buying that dream house. But before you take the plunge, there are a few decision points you’re going to have to make:
Condo or House?
What kind of home do you want? How will you use it? What’s your price range? Shop around. You don’t want to commit to the first house you see just because it looks like you can afford it, the broker is your tita, or someone just told you: “Hey, you haven’t used your PAG-IBIG loan yet, and this development can fix it for you!”
Are you a single professional, a yuppie couple with no children yet, someone with a growing family who needs space for rambunctious children and a couple of big dogs? Or are you just buying to invest, for a second (vacation) home, or an empty-nester looking to liquidate that big house and settle in a smaller place where everything is more convenient?
Property is priced according to area. A small home in Fairview, Cavite or Valenzuela, for instance, can end up much less expensive compared to a condominium unit one-fourth (1/4th) the size in the CBD area.
If you are looking for the convenience of spending less time commuting to and from work, you will have to pay for the premium. Being located near the big business districts and commercial centers make condominiums units a popular choice for newlywed couples and young professionals because of the convenience they offer. If you’re looking for property that you mean to rent out, they might be the better option.
But judging locations can be tricky. Not all property in the CBD (or even in that up-and-coming suburban location) are created alike. The property brochure you’re given may show you the site, plus all the conveniences in the area, but what they don’t show is the traffic on the streets, and whether the area can get congested due to high volume of vehicles, especially during rush hour.
This is why you need to actually see the unit, preferably during rush hour, to give you an idea how much time you’ll spend traveling. Saturday may also be a good day to drop by – traffic is much worse on Saturdays everywhere.
Other things to check: flooding is not an issue in the area, it’s position on the fault-line map and how much the utilities such as phone, internet and cellphone signals, water and electricity, have been set up.
Many subdivisions have homeowner associations that restrict things you can do. These include heights of buildings, as well as small business use (check first if you’re planning to put up a sari-sari store, renting portions out or taking care of animals), as well as where to park, and more.
Condominiums are governed by a deed of even more restrictions. Most developers may prohibit the use of LPG, pets, areas the house-help can go and pass, among others. Also, if you plan to rent out the place, you need to know whether the deed of restriction requires you to course the leasing through an appointed exclusive lessor. Its best to ask your broker to provide a copy of the master deed and restrictions of the projects you are interested in.
Cash or home loan? And from whom?
For those who want to pay in cash, make sure you can negotiate the best discounts. For people who prefer to pay in installments, there are various types of payment schemes available.
The first consideration when choosing a payment plan is your cash position, and income. You can visit your bank, and they can give you the details you’ll need before you purchase a house or condo unit. They will also work with you on setting a reasonable budget for your income.
Other top of mind stuff
You’ve probably seen those ads and posters for really low- downpayment schemes and no-downpayment schemes. Sounds good, right? Not quite. The lower the downpayment, the higher the monthly amortization that you will need to pay. Lower down payments also mean having lower equity in your home. If something comes up and you have to sell, having too little equity can mean you’ll still owe money after taxes and other closing costs.
Those low monthly amortizations offered by some developers also need thinking through. Ask your broker to break down your installment scheme, and to give you a list of the amounts that you should pay every month and every year.
Your responsibilities as a property owner does not end after putting down the initial payments, and moving in. There are other payments you will need to make– insurance and related taxes every year, association dues (homeowners and condo), plus of course, upkeep. Your broker should be able to provide you with rough estimates.