Tips before buying properties
If you buy a property from individual owners
- Ensure that the Certificate of Title is genuine. You can check this by securing a certified true copy of the title from the Register of Deeds. Request a photocopy of the title from the seller and submit this to the Register of Deeds with your application for processing of the certified true copy.
- Inspect the title if it is clean. A clean title is free from any encumbrances such as mortgage from a bank or lending companies. Whatever transactions or legal matters that transpire on the land, as a rule, these should be annotated in the title. Check for these annotations. If the page is empty, it is clean.
- Ensure that the land your are buying is what is truly described in the title. This can be validated at the Register of Deeds. It is advisable to hire a professional surveyor to ensure that the actual property you are buying will match the technical description in the title. Generally, this will not cost much and as the saying goes, an ounce of prevention is worth a pound of cure.
- Make sure that yearly real estate taxes are paid and updated. The government imposes at least quarterly payment of taxes and when a property is sold, the government requires payment of the entire year, so negotiation as to what period buyers pay and what period sellers pay their tax dues should come into play in the sales transaction. It is very important that real estate taxes are paid because of stiff penalties imposed by government on delayed payments and eventually the government can impose a lien on the property which can extinguish the owners right of the property until taxes are paid including penalties.
- Make sure that the sellers are true owners of the property. Valid IDs should match the name in the title. Always inspect the original title, not a photocopy. Check with some authority figures within the locality like the Barangay captain as they also have valuable information about the property and can attest their true owners.
- If the property you are buying is not a residential subdivision such as raw land, or beach lot, check with the DENR (Department of Energy and Natural Resources) with regards to the regulated use of the land. Lands have classifications such as farm land, industrial, commercial, residential and therefore, these should be used according to their classification , though diversion may be applied but requires government approval and usually undergoes a tedious process.
B If you buy from a developer:
- Check for the availability of the mother title. Usually developers offer pre-selling of properties. This means that the houses or condominiums will have to be constructed based on contract over a period of time. The individual title may not be available as this takes time like three years to have the title individualized.
- Trust a reputable developer who has a track record of completed developments. It’s ideal if you can personally check these completed developments to have an idea what it would look like in their pre-selling projects that you might be interested to invest.
- Check every provision of the Contract to Sell that you are going to sign including the annexes. A licensed real estate broker should be able to explain to you in common language all the legal terms expressed in all documents that you are going to sign. You may hire at your option a lawyer for this purpose but this is not customary in large project developments as the documents are standardized. All the signed documents will be notarized and you should have a copy of one original notarized document.
- Choose or negotiate for the least cash out, least monthly installments, and if possible no interest for properties that are yet to be built or on-going in construction. Retention can be negotiated to be paid upon delivery of the unit.
- If you plan to make some modifications on the inside of the unit whether a house and lot or a condo, make sure that this is allowed by the developer and up to what extent if allowed. There are developers who would not allow any changes in their plans but there are those who entertain changes and can be negotiated or discussed before the construction begins.
- Whether you buy from individual owners or from a developer, it’s best to choose a Licensed Real Estate Broker or Agent you can trust with proven records of good and honest service and has extensive knowledge of the local area. Check for loyalty on previous work experiences. Only chooselicensed professionals as the colorum or unlicensed are now strictly monitored by government authorities and prohibited to practice real estate profession in the Philippines. Even if licensed, have preference over independed brokers/agents compared to in-house agents. The in-house agents of developers are strictly not allowed to sell the projects of their competitors and therefore can be expected to be biased on their own projects.