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MONEY MATTERS
Here's Everything You Need To Know About Buying A Condo
When the opportunity to own a condominium unit knocks at your door, make sure you work at getting everything you need to know
by Real Living Team Aug 15, 2017
Original Article: Bubbles Santos-Salvador
Photography: Jilson Tiu and Pexels.com (
No down payment, zero percent interest, no interest for up to five years, for as low as P10,000 a month—these catchy phrases that you often see on flyers and billboards selling condominium units are meant to catch your attention and whether you like it or not, they do. Especially if you are plunking down any of those amounts for a monthly house or condo rental, then you are likely to take a second look at these advertisements. After all, you want to see if buying your very own condo unit is actually doable.
THE BUYING PROCESS: AN OVERVIEW
The process involved in purchasing a unit is similar across developers.
• The client is endorsed to a sales agent.
• The sales agent contacts the client to find out if the client’s specific needs (location, type of unit, floor area, etc.).
• Sales agent schedules an appointment with the client to present details of the project as well as the payment terms.
• A site visit is scheduled to show the actual unit (for RFOs) or the area where the unit will be (for pre-selling units).
The client fills up the reservation form and pays the reservation fee. All other requirements, such as valid identification and proof of billing, will then be complied with by the client, and submitted within an agreed time.
• Upon submission of requirements, developer prepares the Contract to Sell, and sends it to the client within a predetermined time from the completion of requirements.
Aside from your signature on the reservation agreement, the preferred payment scheme, and the payment for the reservation fee, here are some documents that you may be required to submit:
• Fully accomplished buyer’s information sheet
• At least two valid government-issued identification cards. If the buyer is married, he/she and spouse should sign and submit identification.
• Photocopy of marriage certificate, if married
• Proof of billing on declared address
• Certificate of Employment (COE), if applicable
• Special Power of Attorney, if applicable
FIND THE FUNDS
There are various ways to save up for your dream condo, from savings accounts to stocks and bonds. Philippine National Bank (PNB) Assistant Vice-President Modette Cariño recommends home financing. Several banks have tie-ups with different developers in order to ease the burden of finding funding for your condo.
If you agree to purchase a condo during the pre-selling stage, you pay a downpayment “and the bank comes in to finance the remaining 80 percent,” Cariño says.
Grace Lastimosa, First Vice President of Consumer Lending Group of BDO, says the bank has an All-In Financing offer. This includes the additional 5 percent loan to cover loan-related expenses, such as transfer cost, registration fees, insurance premiums, and other incidental expenses.
Depending on whether you are granted fixed or variable interest rates, you will need to consider this when you pay up. Assuming that you have a fixed term of three years, after your third year your balance is re-priced based on your outstanding balance.
Cariño says it’s important to note that if you have money to spare and want to pay off a part of your balance, try and pay it on your loan anniversary date—before the re-pricing happens. Otherwise, you suffer the penalty of pre-termination—which is still about 3 percent.
The requirements for a bank loan application may vary per banking institution, but these are what you should have:
• Photocopy of two valid government issued IDs
• Appraisal fee (non-refundable)
• Proof of income (latest ITR and COE)
• Photocopy of passport, COE, and proof of inward remittance (for Overseas Filipino Workers)
• Securities and Exchange Commission registration and other business documents (if self-employed)
PAY FOR IT
Expect to write your first check when you confirm the reservation for the condo unit of your choice. Reservation fees depend on the developer’s standard rates, but these can range from P15,000 to P25,000. Aside from check payments, reservation fees may also be paid in cash and via credit card in some cases.
As a general rule, the reservation fee is always deductible from the final computation of the condo unit price.
Cash payment is almost always an option, with corresponding discounts, with varying rates, given by developers. The discounts may seem attractive, especially when you see the savings in pesos so it's important to consider the payment terms.
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