Even if shopping for a new home is an emotional experience, treat it as essentially a business transaction that must properly managed and documented.
From my lessons from the field, the three most devastating things that can go wrong in purchasing a house are:
• Paying too much
• Losing a dream home to another buyer
• Buying the wrong home
When you have a systematic plan before you shop, you’ll be sure to avoid these costly errors. Here are some tips on making the most of your home purchase:
Get the information you need
What price do you offer a seller? Is the seller’s asking price too high? Is it a deal? Without knowledge of the market, your offer could be too much. Or worse, you could miss out on a great buying opportunity for wanting to haggle the price down. Inquire from different information sources to confirm this. See listing blogs, websites, the classified ads, or ask your local Realtors’ Board for ground information. Don’t hesitate to do a drive-by of homes in your preferred neighborhood with “for sale” signs, and making initial price inquiries.
Buy YOUR home
What do you need and want in a home? Sounds simple, but clearly identifying your needs and bringing an objective view to home shopping leaves you in a much better position. How much space do you really need? Too small and you may feel like you live in constant clutter. Too big and maintenance may become too daunting. Outline all of your priorities, and work on finding not just a great home, but a great home for you.
Check the title
Before you sign any document, be sure the property you are considering is free of all encumbrances. As a part of his or her services, a Realtor® can supply you with a certified true copy of the title to ensure there are no liens, debts, undisclosed owners, leases or easements against the title.
I always advise home buyers, especially first-time home searchers: ask all the questions about the title even from day one of the viewing. Don’t rely on just the photocopy of the owner’s duplicate certificate of title. Not all the annotations and liens are stamped on it, so best is to get the certified true copy of the original Registry of Deeds (RD) title.
One of my clients recounted her unfortunate experience of canceling a sale because her previous broker failed to disclose the condition of ownership of the title early on. She was excited to purchase her dream home, ready with her cash, and thought her months of searching for a house were over. When she asked for the contracts, her broker said she just learned that the owners were in Australia and couldn’t fly back to sign in person. When the buyer suggested that they just draw up and send back a notarized Special Power of Attorney, the broker got back to her the following day and said that she just found out that there was a loan on the property. Out of her frustration, she checked out the title herself at the Registry of Deeds, and learned further that the property was part of a consolidated collateral of a bigger loan that was in default for some time.
Consider getting a professional inspector
Getting a professional inspector is frankly rarely practiced by Manila home buyers. But as an extra insurance against renovation and move-in surprises, get a home inspector to thoroughly do a once-over of your candidate house before closing that deal. Their expertise can mean the difference between uncovering major flaws before or after your new home is turned over to you. In the Philippines, a home inspection will not (and shouldn’t) change the agreed-upon selling price between buyer and seller. In an ideal though rare situation, both parties will allow the deeds of sale to be made subject to this report’s findings. What’s the equivalent of a home inspection in Manila? It may be a visit done by an architect, a contractor, or even a licensed appraiser who can objectively assess the house’s current state. This will cost a minimal fee, but it will save you a lot of headaches.
Get pre-approved
It only takes a few days to get financing pre-approval. When you are shopping for a home, this gives you more power. A seller is more likely to consider an offer from a serious buyer when he has a pre-approved bank loan or credit line.
I’ve worked with HSBC, PSBank, and BPI as a mortgage broker and as a home loan applicant. These three banks can do really quick loan pre-approvals. Some banks claim a turn-around time of five working days to get notice of your loan approval status, assuming all required documents and information were given by the borrower.
Remember additional costs
Besides the funds for the purchase of a home, you’ll need funds for items such as loan fees, insurance, legal fees, surveys, inspections, etc.
Take a deep breath
Before you sign, ensure that all documentation clearly reflects your understanding and conditions of the transaction. Has anything been forgotten? Don’t rush. You could lose money, financing, or even the sale if you attempt to push things through too hastily.
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