7 Mistakes Filipinos Make When Buying A Condo Unit For The First Time4 min read
With more developers slugging it out in the condominium arms race, there certainly is a condo unit specifically built for every type of personality. However, a lot of people purchase units for the wrong reasons and end up spending more than they should.
Take note of these seven mistakes Filipino condo shoppers commit and never regret your decision again.
1. Thinking of condo units as an automatic investment.
If you look at the facts, buying a condominium unit may seem like a good investment, given the double-digit price increase per year at 12.9%, per Global Property Guide.
However, financial experts say that buying a condo unit and automatically thinking of it as an “investment” is a common misbelief.
“If it’s not making you money that you can physically hold—then it’s not an investment; it’s probably just an idle asset, or worse, a liability,” says Fitz Villafuerte on his blog. This means you should be willing to sell your unit or have it rented out to call it such.
2. Not getting the right size for your growing family.
As much as developers want to cast a wide net to target different demographics, the limitations of condominiums make it hard for some people, especially growing families, to become truly at home in their prospective units.
“The thing is, buying a condo will only work if you intend to keep the household population to about two or three people. Since condo space is finite, unit population should remain constant,” writes JP de Leon of the Manila Survival Guide.
3. Believing that expenses end once you’ve fully paid your property.
Financial adviser Burn Gutierrez says owning real estate means ongoing costs, which means that it doesn’t stop even if you’ve paid your property in full; the same also goes for condominium owners, since they have tons of fees they must tend.
“In case you are not aware, there are so many other costs to consider when purchasing or investing in a property other than your monthly amortization,” Gutierrez says. “Although these costs may vary on a per case basis, still you have to be aware and prepare.”
4. Expecting too much from preselling units.
The price of preselling units may sound attractive, but it is no secret that some developers fall short on their promise of the amenities, features, and even completion and turning over of the property.
“You can avoid these risks if you do your due diligence before deciding to invest on preselling units,” says real estate broker Kathy Lacuna. “Check out the developer. Does the developer possess a proven track record of building and actually turning over pre-sold units as promised?”
Consult the Housing and Land Use Regulatory Board and do your research on developers who are known to deliver projects on time.
5. Leaving everything up to the real estate agent.
It may seem ironic coming from a real estate agent, but senior sales manager Michael Kingsu says you should never let the agent take full control of your condo shopping, especially that it’s you who will eventually pay for your mistakes.
“While [agents] can guide you around and tell you everything you need to know about the property, the decision is still solely up to you,” he says. “Don’t rely on the assurance from the real estate agent alone.”
Do your research. If you’re looking for a condo for sale in Quezon City, for instance, look up online sources and ask around.
6. Getting too excited about moving in.
While some developments may meet their deadlines, others set impossible timelines and in turn, end up earning the ire of future condo owners who may have set tight deadlines to move in.
Richard Macalintal, a registered financial planner services consultant in Singapore, recalls on his blog his experience as a first-time condo buyer where the developer failed to deliver the completion before the turnover date.
“Do not expect much on the delivery date. A real estate agent revealed to me that some developers don’t meet the deadline for the estimated turnover rate for various reasons,” he says. “According to the law, customers can only complain if the real estate developers fail to deliver six months after the turnover period.”
7. Pinning your hopes on a property before getting a mortgage approval.
According to Property Asia, this is a common mistake among Filipino buyers, especially among first-time condo buyers who are too giddy about owning their first homes. Since getting approval for a condo loan may take a week or two, you may want to apply way before you even scout for locations.
“Before purchasing a home, you must first secure a home loan and get your mortgage approved. Sadly, some first-time buyers fail to qualify for a mortgage due to poor credit history,” they say. “If you’re applying for a mortgage, don’t secure credit for a new car or a bedroom furniture simultaneously. New financial obligations can lower your credit score.”