Home Buyer’s Guide

It is everyone’s dream to own a home. Be it a town home, a luxury flat, a vacation home, a golf manor, a retirement estate, a house and lot, or what have you. People dream to put a beautiful home over their heads. In fact, the biggest investment of the average person is his home which they end up paying for most of their lives. More often than not, it is a family investment that provides security, shelter, and intimacy for the members to foster their love and create wonderful memories that they can look back to and cherish. There are many homes up for sale in the market and not all of them are the same. Each home caters to a specific need that only you or your experienced agent can determine. Many times, home buyers do not know what they want and end up buying a wrong home they become emotionally attached to. A home that does not fit your need is a home you might end up re-selling.

Consider the following:

Financials 

Determine what you can afford. Have you decided how much you are going to spend for your property? Are you planning to pay in cash? Or are you taking out a loan? Preselling poperties that are bought through a bank require the borrower to pay a down payment to represent his equity of the property which is at least 20% of the SELLING value of the property. If you have been approved for a loan and the property you are buying has been valued at P10M, then you are obliged to raise at least Php 2M for your equity for the property. The bank will then lend out the remaining Php 8M which you will be paying for at your preferred term.  However, if you are planning to buy a used home or a resale, the bank will reqire 30%-40% of the APPRAISED value of the property. For instance, if you find a similarly priced Php 10M home, the bank will appraise the property  lower at only Php 8M (for example) so the Php 2M (Php10M - Php 8M) has to be added to your downpayment equity. The additional equity the bank will require will be the 30%-40% of the Php 8M appraised value which should be around Php 2.4M - Php 3.2M. That means if you are considering to buy a Php 10M resale, you need to be ready with a Php 4.4M - P5.2M cash at hand. To simplify, a resale would require a 40%-50% downpayment while a preselling property would only require at least 20%. In either case, your downpayment has to be ready. Find out how much you can loan at our Mortgage page. We also have a mortgage and loan calculator to estimate your loanable amounts and monthly payments.

Location

Location! Location! Location! You hear this all the time and some may think that the best location would always be the place they grew up in because it brings with it fond memories of their childhood. If you have been overseas for a long time, your place of upbringing might have long been paved away for a national highway or a private development. The people you grew up with may have long relocated elsewhere and the mango tree you cherished is now no where in sight. The place of commerce your family once worked in is now a faded memory and everyone you once knew now works in the bigger and newer city or in an area closer to newer master planned developments.

A good way to zero in on a location is to find out what majority of your family members would be doing most of the time in your chosen area.

Schools: Do you have children who still go to schools? If so, find a home near the schools of your choice so your children will not have to endure a long commute and spare them from bumper to bumper traffic. The school experience should be a happy one – not a long and tiring bus ride. If you do not have kids at the moment but plan to have some, choose a property near the schools you want to put them in. More often than not, well planned properties near good schools increase in value faster than other properties that offer this accessibility.

Work: Do you plan to drive 3 hours a day to go to work or would you prefer to walk to your office? If you have children, do you see yourself coming home to have lunch with them? Or coming home early and bypassing traffic to play with them? If so, then get a place near your work. Many schools are also located in the big cities so both you and your kids save travel time and get to spend more quality time together. Homes near places of commerce enjoy the highest rental and re-sale rates. Buying a cosmopolitan property from a good developer in a new city offers the promise of the fastest property appreciation.

Commercial & entertainment areas: How long and how far would you go to buy basic necessities like groceries, clothes and etc? Do you prefer to be in an area near malls or would prefer to be far away from them? Major malls are all located in the city but micro groceries are available in any suburb. You can get a city condominium or town home to be near the malls or live in a suburb and enjoy a private garden. Commercial areas are very busy, even on weekdays. If you prefer peace and quiet over the mall, the suburb might be a better choice for you.

Leisure & lifestyle: Does the idea of living by a golf course thrill you? Do see yourself spending most of your time near the beach, by the lake, or up in the mountains? If so, buy a leisure and lifestyle development in the countryside. But if you are the type who is just happy with a playground for your kids, a tennis court, a basketball court, and areas to bike around, many well modern cities and well planned suburbs have parks, country clubs and small village centers but only city properties enjoy the accessibility of big malls, stadiums, movie theaters and etc.

Cost of living: The city is more expensive to live in. Properties in the city cost a lot more. A studio unit in down town Makati can cost more than a house in the suburb. Likewise, a parking slot in a condominium can be as expensive as a car already, and in some cases, renting a slot can cost you up to $70 in the big city. Living in faraway suburbs means you can buy a bigger home and save that parking slot cost.  Of course, some areas charge you toll fees and the burden of a longer drive in bumper to bumper traffic.

Traffic: Before you buy a home, try to go to your area of choice early in the morning and simulate leaving this place for work around the time you would leave to be at the office on time. Similarly, try to drive to this area after work and see how you like it.

Type of Home

There are three basic types of homes in the Philippines and each differ through ownership and structure. The common homes available in the market today are: Houses & lots, Condominium and Townhomes.

Houses & Lots - are detached single family home structures built on a vacant lot.

Advantages

• One owns the house and the lot
• Offers the best living lifestyle
• Offers the best expansion possibilities
• Offers the greatest flexibility to modify
• Provides the highest levels of privacy
• No common properties inside your lot
• Greatest flexibility for use
• Lowest association dues

Disadvantages

• Requires the highest maintenance effort and cost
• Usually farther from commercial districts
• Rents lower than a condominium of similar class & price
• If you want a private pool & other amenities, you have to build it
• Usually farther from comfortable public transportation
• Usually advisable to employ helpers to maintain the property

Townhomes – Usually a smaller more compact home having 2 – 4 floors and physically attached on both sides to other units while sharing the same wall.

Advantages

• Own the lot the townhome is built along with the structure
• Lower cost than a standard home
• Faster to rent out than a traditional house
• Own a small private garden
• Good amenities –  pool, gym, basketball court, etc.
• Exterior look is controlled by an association for uniformity
• Higher association dues in exclusive developments

Disadvantages

• Limited expansion possibilities
• Rare to find a good townhouse in a gated community
• Shared common amenities if in a gated community
• Usually farther from comfortable public transportation

Condominium - Individual dwelling spaces in a skyscraper  that is usually located within the confines of the city. Many of these properties cost a lot of money due to their prime commercial location.

Advantages

• Ownership of unit
• Pro rated ownership of prime commercial land
• Lowest maintenance effort at reasonable cost
• High Security
• Highest leasing rates
• A variety of amenities provided for the entertainment of owners
• Usually located in the best and primest locations
• Appreciates with surrounding commercial developments
• Many have generator back ups for black outs
• In-house maintenance personnel
• Exterior look is controlled by condo association for uniformity
• Easily accessible to more comfortable public transportation

Disadvantages

• Limited expansion possibilities
• Shared common amenities
• Very rare to find condos with gardens
• Highest association dues