What steps should I take before I buy any real property?
Our economy has been growing faster than it has ever moved in recent history. The strong fundamentals that we have are definitely influential in this improvement. Another major factor that economists are pointing out is the entry of the Philippine population in the Demographic Window, It is the time when the proportion of the population aged 15 years and younger falls below 30% and when a proportion of population aged 65 years old drops to less than 15 percent. This period attracts business because labor supply and income-earning consumers are abundant and the economy is productive.
This only means that there will be more people who will be buying or at least will be planning to buy their properties for the first time and I am sure that they will find these tips very useful:
1. Location: Choose the location of the property that match your requirements. In choosing a home for your family, you need to consider the basic requirements of availability of schools for your children, accessibility, and distance to your workplace, peace, safety and security of the environment and its proximity to supermarkets or grocery stores. You should also consider the noise, pollution and flood level in the area and a host of other considerations. Once you have a clear idea of your requirements, it is advisable to consider the resale factor of the real property you are purchasing. You may decide later on to dispose of the property and move to another location or migrate to another country. This may prevent you from being stuck with the property that costs you a lot to maintain with no interested buyer or lessee.
2. Size of Family or number of dwellers: Another important factor in choosing which real property to buy is the size and needs of the dwellers or family members. If you have an average family size of 5, a 4-5 bedroom house with 2-3 baths would be reasonable instead of 7-8 bedrooms with 5-6 baths. You may also consider the need to have an extension office in the house or study area for the kids or a family room for family activities. These requirements should also be considered. However, with the prices of properties nowadays, some may find these suggestions unaffordable. In this case, they should consider the size of the rooms for possible sharing.
3. Type and Built of Property: There are several property types to choose from condominium units, houses and lots in a subdivision, duplexes, multiplexes, townhouses, apartment units, and others. Some families or dwellers prefer the accessibility and convenience of living in condominium units. Others find comfort and serenity in staying in a house inside a gated community in the Metropolis or in their ancestral house in the province regardless of the distance and traffic. You need to weigh all options and balance the interests, needs, and requirements of the family members or dwellers as well as the cost of buying each property type.
4. Acquisition Cost: How do you plan to finance the acquisition of the real property? If you will buy the property in cash then this matter will not be a big issue. Your only concern is how much discount you can get from the property developer or seller if you pay in cash. However, if the property acquisition will be partly financed through a loan, whether from the banks, private lenders or thru house financing, the general rule is that your monthly loan amortization should not exceed 30% of your family’s total income per month. So you have to compute the total income from all sources of the family: compensation income of husband and wife, rental income, business income and income from other sources. Limiting the amortization to 30% of the total monthly income leaves enough to support the other family needs. Banks and other private lending institutions including Pag-Ibig Housing Loan under the Home Development Mutual Fund provide housing loans based on borrower’s income. (For Pag-Ibig housing Loan see the requirements and steps here). They have a separate checklist of requirements before a loan is approved. It is advisable to visit your preferred bank and know their housing loan policy and requirements.
5. Advice from Licensed Real Estate Professionals: Buying real property is a major investment. It involves major cash outlay for most property buyers that may somehow affect the lifetime savings of spouses. It also tie-up buyers with long-term debt obligation with the banks or lending institutions. Given these facts and circumstances, prudence dictates that buyers or investors must study carefully before they decide to buy or invest in real estate. It is highly advisable to consult with licensed real estate professionals such as licensed real estate brokers, property appraisers, real estate tax consultants or lawyers to minimize or avoid costly mistakes in buying or choosing real property.
These professional licensed real estate practitioners can advise you on the foregoing issues and concerns including real estate tax issues, title registration requirements, bank housing loan requirements, resale factor of the property, title and ownership research and more.
In doing any huntings, whether in the jungle or house hunting, it is always wise to have a professional guide, to avoid any trouble in the future.
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