What to Know Before You Buy a Pre-Selling House and Lot
Buying a home is one of the biggest financial milestones in every Filipino’s life.
A house is a costly yet worthwhile investment, but it doesn’t need to be so expensive. There are tons of options that will save you money, while still allowing you to get the house of your dreams. One option is a pre-selling house and lot, which is a house sold before its completion, during its construction, or while in its initial planning stage.
There are several things to consider when thinking about purchasing a pre-selling property. This helpful guide will walk you through what to expect and if it’s right for you.
Costs
Pre-selling properties offer a low introductory price, which can be almost 30% cheaper than the completed property.
Developers have been known to offer 10% to 15% discounts and flexible payment schemes. Some payment plans offer down payments as low as 10% payable over three years, while the lump sum can be paid through bank financing, government home loans, or the developer’s in-house financing options. If you’re buying for investment purposes, this may be beneficial to you.
Since you’ll be buying low, if you plan to sell your house in the future, you might be able to earn back your investment since the property’s market value will increase by the time its finished.
The cost of a house will differ depending on the location. The price of a pre-selling property in Metro Manila will obviously be quite exorbitant, but you can find an affordable yet beautiful pre-selling house and lot in Cavite or in any city farther from the center.
Options
Besides costs, the biggest benefit of purchasing a pre-selling property are the customization options available to you.
Since the unit is not completed yet, some developers may allow you to customize the unit to your liking. You’ll also benefit from having new and unused amenities and facilities. Unlike ready for occupancy properties, you’ll be able to select your first preference for the property rather than only having to choose from what is available and offered to you by developers.
Move-in period
A pre-selling house cannot be moved into right away. Depending on the type of property you’re purchasing or the developer’s stipulations, the time frame to move-in could be anywhere from six months to one year, even more in some cases. Time frames also depend on what stage development of the property is in when inquiring about it.
A property in its early planning stage will obviously take longer to turn over. This may be a potential drawback for you, if you’re planning to use the house immediately. Therefore, it’s essential to make plans early on.
Depending on how soon you want to move in, you can always look for properties with a shorter turnover time. Usually, these are developments that are approaching completion. The amount of money you’ll save from planning beforehand with definitely be worth the effort.
Lastly, here are some practical things to keep in mind before making your final decision:
- Choose a reputable developer with a verified history of developing quality projects
- Do a background check on your sales agent or broker
- Opt for a location that is accessible to other developments and major expressways and highways
- Always ask about promos, discounts, and flexible payment terms available
- Factor in additional expenses that purchasing the property will cost you, in addition to the total cost of the house
As with anything that requires you to spend money, it will be best to do your research. It’s better to be knowledgeable than to make an uninformed decision.
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Ken Boyd
Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies
(email) ken@stltest.net
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