Pre-Selling Condo Versus RFO: A Tale Of The Tape3 min read
Let’s face it: Metro Manila is a congested heap of concrete, metal, and asphalt. With the country’s capital in such state, developers are looking for ways to make Metro Manila still inhabitable to those who are looking for a safe and convenient housing solution in the city: condominium living. With condo buildings being built left and right, you may see units being sold even if the actual structure hasn’t been erected yet. With property development continuously growing, is it a good idea to buy a pre-selling condo unit or is ready-for-occupancy unit still the best way to go?
The difference between pre-selling unit and RFO unit
Buying a condo can be a very intimidating task, especially if you are unfamiliar with the terms used by sellers and developers when pitching the unit to you. To make yourself more familiar with pre-selling units and RFO units, here are their definitions.
In the field of real estate, pre-selling units are condominium units that are sold before they can even be transferred to the buyer. In other words, they are sold during the following instances: before construction, before completion, or even during the planning stage of the building. When you buy a pre-selling unit, you are going to purchase a unit that doesn’t exist yet; during this phase, you are literally buying an imaginary unit and you still have to wait for the construction, completion, and eventual turnover for you to be able to enjoy the unit.
Meanwhile, ready-for-occupancy (RFO) units are exactly what they say: the condo units are ready for turnover once you start with your payment scheme and finish the paperwork for the unit. For buyers who are more confident in getting a unit that already exists, this is the best option for you. In most cases, RFO units are leftovers from a certain condominium’s pre-selling inventory.
Advantages of pre-selling units
Pre-selling units are specifically catered for a select type of buyers. If you are thinking of buying a pre-selling unit, you should definitely look at the advantages:
- Low introductory price. Usually, pre-selling units are sold at around 30 to 50 percent of the regular price of the unit. This is the main reason why condo buyers prefer to make the purchase during the pre-selling period.
- Lower down payment. In most cases, the minimum down payment for condominium units as well as other types of properties are at 20 percent of the total sale price. With pre-selling units, the initial payment can go as low as 10 percent of the total sale price to attract more buyers.
- Freedom to choose the amenities. Pre-selling units always come with something good or even better than their competitors: better amenities, state-of-the-art design and architecture, and so much more. It is much easier to scout for pre-selling units when looking for your potential unit.
Advantages of RFO units
While pre-selling units are packed with advantages that make them a good catch, RFO units are also good for potential buyers who are on the lookout for the following perks:
- Units ready for inspection. Some people are skeptical about huge investments, and you cannot blame them if they want an actual inspection of the unit before they proceed. With RFO units, you can see physically see first if the unit is right for you and you can make a decision afterward.
- Avoidance of overpromising. When you look at brochures and flyers of condo units, some of them tend to fall short of their features once you’ve seen the actual unit. RFO units avoid this; what you see is what you get. No frills, no cheap tricks—just the real units for your inspection.
- Ready for occupancy. As the name says, you can move to RFO units the moment you are able to complete the paperwork and settle the down payment for the unit. Once you’ve made the necessary arrangements, you can haul in your things and start living the condo life.
When buying a condo, you have to take into consideration whether you should get pre-selling units or RFO units. Remember, see which gives you the best advantage not just in terms of price but also in other features. Once you’ve settled it, go to your real estate agent and close the deal!