When You Decide to Buy Instead of Building Your Home

By: PHINMA, Inc.

There is nothing like building your own home — in exactly the way you and your family want it, the size, shape and color you have dreamt it. However, if you decide to buy an existing house, townhouse, or condominium unit, make sure to have all the information you need to decide on the purchase.

Your first priority: Borrow the title of the property to determine ownership. Make sure that the seller is the registered owner of the property. If the person you are dealing with is not the registered owner (such as the broker), make sure that he or she is properly authorized to sell the property.

Your bank can assist by preparing a comprehensive appraisal and review of the property to determine ownership, previous and present liens on the property, attachments if any, and other details that will affect the value of the property and its acceptability as a form of collateral.

In buying an existing housing unit, consider the following, besides the points given earlier:
1. If buying a house

    a. Check the ownership title.
      * Find out if the house is mortgaged. If it is, make sure that payment terms will incorporate a take-out of any loan with which the house had been built.
      * Study the restrictions imposed by the subdivision (such as on the heights of buildings) because this may affect your plans and the property’s market value.
    b. Anticipate any additional costs.
      * Check on repair work needed on the property, because this would affect its value and your expense budget.
      * Know the dues you have to pay the homeowners’ association in the subdivision.
    c. Find out the appraised value of the house.
      * The bank appraisal provides for depreciation of the house. Therefore, the newer the property is, the better valuation you will get from your bank.
      * Quality of building materials will also be a factor that will be considered in the appraisal and review.
      * Look at the state of the structure. Are there any cracks in the walls? Leaks in the ceilings? Are there signs of termite infestation?
      * Is the house in a good neighborhood? Location is a prime factor in determining a house’s resale value.
2. If buying a townhouse or condominium unit
    a. Look for a reliable project. When buying a townhouse or a condominium unit, always consider the developer of the property.
      * Look at previous projects of the developer and see the extent to which these have appreciated over the years.
      * Unless the developer is highly reputable and has a solid track record, avoid buying during the pre-development stage. Some people have made considerable profits by buying during this stage (at a discount) and selling shortly after completion of the project, but some others have lost their investments because the developers fail to complete their projects.
    b. Check out the facilities.
      * Check out such basic utilities and services as water supply, power generators, and pest control, because these will affect the future value of the property.
      * Check out common areas and facilities, such as the swimming pool, gym, lobby area, laundry and drying area, generator, etc.) and how these are maintained.
      * Consider other factors that may affect the future value of the property, such as the surrounding buildings, access to schools and marketplaces, and access to public transportation.
    c. Study the administration rules.
      * Study the rules, regulations and restrictions (such as a ban on pets) of the condominium or townhouse association.
      * Know the monthly association fees and other assessments, because these will affect your expense budget.
    d. Check what is included in your title.
      * Check your certificate of title to determine what are included in it. In some cases, parking slots have a separate title.