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Buying a Home in the Philippines


 Congratulations!  You have either decided to purchase a home or condominium, or maybe just seriously thinking about buying one.  You'll be joining the ranks of hundreds of families who realize that home ownership offers a number of benefits including building equity, saving for the future, and creating a stable environment for your family.  When you own your own home or condo, your hard-earned dollars contribute to your mortgage. The equity you earn is yours.  Over time, your home will also increase in value.


By Doug Marsh, Real Estate and Investment Counselor

Whether you are buying your first home or you’re fifth, the process of buying a home can be an emotional and time-consuming venture.  Feeling that, in the end, you made the right decision and got a good deal can make all the difference.  As with most major decisions, the amount of work and research you undertake before you start shopping can have a dramatic effect on how well you do in the end.  The following 20 tips are for all Buyers to consider before, during and after your new home hunting experience.  (Not in any special order of importance).

#1 – Do you really need that backyard Tennis Court or Swimming Pool:  Everyone can picture their ideal home.  If you haven’t thoroughly prepared yourself prior to viewing houses, chances are that you will find what you may think is your ideal home, and will wind up paying too much for it.  It is essential to treat the buying process in a slightly detached manner.  Those who fall in love with houses usually pay too much.  That’s why it’s recommended that you develop two lists, one of NEEDS and one of WANTS.  When looking at houses, make sure that they cover all of your NEEDS – things like adequate space, well maintained, a good neighborhood, perhaps a garage – and then have fun with items on your WANTS LIST.  Treating the process in a regimented manner will help you to make a rational, informed decision.

#2 – Get Pre-Approved:  Visit your local Bank that you will be using for financing a home prior to shopping to get pre-approved.  Be sure to get a mortgage commitment in writing.  Being pre-approved gives you a solid price range, and lets your Realtor® and potential sellers know that you are serious and not just a browser.

#3 – Get the right people behind you:  Buying a home is a complicated process, with many people possibly getting involved.  Having the right people on your side can make a big difference.  An experienced, dedicated, and knowledgeable Realtor® can put a team of advocates, including Lenders, Lawyers, Property Appraisers and Movers, on your side immediately.

#4 – Communicate:  The more you share with your Realtor®, the better he or she will be able to represent you.  Letting your Realtor® know exactly what you’re looking for, in terms of needs/wants, price range, and location, this can eliminate unnecessary trips to unsuitable homes and can help ensure that you wind up in the right home.

#5 – Location - Location and Location:  It’s still true.  The desirability and resale value of your home depends on location more than any other factor.  People want a desirable community that includes character, quality of schools, access to work, major transportation arteries, recreational facilities, etc.  On your viewing trips, take a careful look and ask the following questions:  How does this home compare to others in the neighborhood?  Are yards fenced?  Are there many children playing in the streets?  Are the front and back yards and the exteriors of the homes properly maintained?   The less expensive houses in a better area tend to appreciate faster than the most expensive houses in a less desirable area.  Additional factors that affect the property value of a home include traffic, sounds, smells, Zoning laws, Home Owners Association By-laws and many others.  Be objective.  Be sure you are completely satisfied with the neighborhood.  If you choose a neighborhood with problems, you likely won’t get as much as you hoped with it when it comes time to sell.

#6 – Use Your Realtors® Knowledge:  Your Realtor® should be trained in all aspects of real estate, including understanding supply and demand, economics, and the neighborhoods of the city in which they practice.  A Professional Realtor® can do much of the work for you, by reviewing your needs, reviewing available properties, and making an informed match.  A comprehensive knowledge of the available homes in your neighborhood is one of your Realtors® strongest assets.  With the aid of computers and the MLS Systems, a professional Realtor® is usually notified within hours when a home becomes available.

#7 – Pay Attention to Red Flags:  When looking at and evaluating a home, be sure you know the difference between acceptable and unacceptable problems.  Cosmetic items like peeling paint, worn or cracked floor tiles, or unattractive wallpaper can be easily remedied, and can be used as negotiation items, as they will be extra costs to you in updating the home.  Major problems, however, are clearly Red Flags.  Look for items such as major foundation cracks, water damage, outdated electrical systems, and inadequate plumbing.  These items could be very expensive to repair to make the home a worthwhile investment for you.

#8 – Think of Hiring a Licensed Real Estate Appraiser:  A Licensed Real Estate Appraiser will not only be able to give you an accurate Home Appraisal but will point out any major or potential problems/defects that will affect the price of the home.  It is an inexpensive way to gain peace of mind, and guard your pocket book.  A proper appraisal will cover all areas of the house and property, it will also compare the house to other similar ones in the area that are either on the market or have recently been sold. A professional appraiser can give you an objective and unbiased view of the property and the surrounding neighborhood, with an Official Written Report, indicating the present condition and items that will need repair.

#9 – Be Cautious with Fixer-Uppers:  Sometimes, a fixer-upper can be purchased below market value, and once sufficient repairs are made, can be sold at a significant profit.  However, not all fixer-uppers will bring in the profits you might expect.  Consumers often overestimate their level of dedication to doing extensive renovation work, and underestimate the costs associated with such work.  A wall that needs to be replaced can often lead to the discovery of faulty plumbing, electrical, or other major undertakings.  Your Realtor® and Property Appraiser are your best allies when it comes to cost-benefit analyses.

#10 – Consider your Future Needs:  A move can be a major undertaking.  Take a good look at your current lifestyle and consider the future.  Will you need extra space for a home office, a child, or perhaps a child moving back home?  Perhaps it may be easier and less expensive if you purchase a home that can meet these needs now, rather than moving up to a larger home a few years down the road.

#11 – Proceed Quickly:  When you’re ready to buy, act.  Good properties sell.  This is especially true given the current state of the real estate markets.  However, when you work with a Realtor®, you have access to the latest technology.  As part of the MLS and some Agent Handshake networks, a Realtor® has access to properties within hours of when they are listed.  Technology works to your advantage.  Many Realtors® now have personalized websites which allow you to sign on as a client, and receive notification of new listings via email.  You save time and effort, and you can view only those homes that come closest to meeting your needs.

#12 – Clarify Relationships:  In any real estate transaction, be very clear about who is working for whom, and what the relationship represents.  Unless otherwise stated, a Selling Realtor® represents the Seller in transactions for the sale of a home.  The Selling Realtor®, as part of his or her duty, must ensure that the Seller’s (and not your) position is represented throughout the entire process.  This is why you should have a Realtor® to act in your behalf and for your protection.  Get a Realtor® on your side, they will ensure your satisfaction and protection at all times.

#13 – Ask for a written CMA:  A Comparative Market Analysis (CMA) is an analysis of comparable homes in a given neighborhood, subdivision or area.  Currently, there are only a very few Realtors® in the Philippines that can provide this service now, but it is catching on and should be more widely available within a year or two.  A CMA basically shows you the sale prices of comparable homes in a neighborhood, along with asking prices of other homes in the surrounding area currently on the market.  Ask if your Realtor® can provide you one.  With this valuable document, you’ll have solid, reliable information about how fairly a home is priced compared to its real fair market value.

#14 – Try to find out a little about the Seller:  Understanding a seller’s reasons for moving could work to your advantage during negotiations.  For instance, a seller who has been transferred to another city may be more motivated to sell than someone who is still shopping for a new home.  A vacant house, or a house that has been on the market for several months and has been reduced in price, could also provide the opportunity for lucrative negotiations.

#15 – Keep it Impersonal:  Conversely, information could be used to your detriment. Information about your mortgage, size of down payment, move-in deadline, or circumstances for buying could be used to the seller’s benefit in negotiations.  While you want your Realtor® to know these details, maintain your poker face and keep your cards hidden with the sellers and their Realtor®.

#16 – Measure Twice, Sign Once:  While you definitely want to move quickly once you’ve made the decision to purchase, you don’t want to cave in to pressure for a quick close.  Someone who is trying to pressure you into buying a home is likely doing so for a reason.  Make sure the reasons for you to buy a home are your reasons, not theirs.

#17 – Exercise your Negotiating Skills:
Even if you prefer not to haggle, it’s worth it, especially when it’s going to be your home and one of your biggest investments.  Most people expect to haggle over the price.  There is always room for negotiation, and you’re experienced and knowledgeable Realtor® should be a professional negotiator.

#18 – Avoid Bidding Wars:  In some cases, the Seller’s Realtor® may use scare tactics to rush the sale or increase the price.  Falling for this trap could cost you money.  If there is another buyer, or some other reason this pressure is being applied, whoever wins also loses because they tend to overpay.  Let reason be your guide, not passion.

#19 – Get it in writing:  Legally, Sellers in the Philippines do not have to disclose all known material defects of a property as is required in the U.S.  However, your Realtor® can ask the Selling Realtor® about any known defects or problems.  Hopefully, the Selling Realtor® would be ethical enough to ask the Seller this and provide a responce.  Also be sure to consider the ramifications of these defects.  Will they be costly down the road?  Are they “serious” defects?

#20 – Be Aware of Hidden Costs:  While some Realtors® often tempt first-time buyers with rent/mortgage comparisons, there is more to a home than simply the mortgage.  You will be responsible for other items including, transfer taxes, title registration fees, property taxes and of course the increased monthly utility bills, etc.  Ask your Realtor®, he or she will give you a good idea of the costs associated with buying a home that are beyond its final negotiated price.

These are just some of many things to consider when shopping for and buying a Home.  The most important tip of all is to find and employ a Realtor® that will advise and assist you in all these matters every step of the way.


“Trust only a Licensed and Professional Realtor®”