January and February has been an ultra stressful month for me. Before moving to Singapore, I have been living in a 3-br condo in the heart of Manila for 4 years, just a stone’s throw away from the neighbourhood I was raised and born. I’ve been renting this unit for 2 years so I can vouch that it’s in a good shape so I decided to go back and reconsider the owner’s offer to purchase it in a rent-to-own manner.
As a digital native, the first thing I did is to go and Google the resources I need before plunging into this big decision. I find it so difficult to find complete resources and if there are any, it’s a half-a** written content from hard sell realtors and developers website pushing and shamelessly angle-ing articles into getting a unit from them or financial advisors that flies as realtors which will push you into getting a loan, diversify, adding more headache more than you already have.
I did a lot of research but there’s no comprehensive guide. So I thought of sharing the steps I went through and some tips I garnered along the way and you should know about Purchasing a Second-Hand Condo in the Philippines.
Here are the steps I took which you can treat as a checklist:
- Conduct your own due diligence. This is the most important and no brainer thing here.
- Request to see the original title or titulo in tagalog.
- Request for the seller’s Government issued IDs. Make sure to check who are the assigned names in the title. Both name should appear on Contract of sale and Deed of sale as well as during signing and getting the documents notarized. In my case, they are spouse.
- Inquire about their financing method of acquisition. Ask as many questions to the owner like how they acquire, which loaning scheme (typical: PAGIBIG, in-house loan by the building developers, Bank loan) and when is the last payment made.
- Building’s life years. Remember any building is only 50 years. after confirming, you need to clarify what will happen after 50 years After that, the city can either reclaim it from developers for any government project or the it can stay. and your ownership resume or at times, the developer can opt for renovation or re-sell/revamp, on those cases, you will be given a discount to re-purchase the unit.
- Check if there are any miscellaneous balance like association dues, bills or any issues with the owner or current tenant by visiting the admin office.
- Request for the latest annual realty tax receipt payment.
- Secure a Certified True Copy of the Title. Go to city hall or the nearest Land Registry Authority and look for the Registry of deeds office. Approach the security guard or any assisting officer and inform them on your purpose. They will hand you a queue number, fill up the form and wait 3-hours. for and costs Php 311.15 by the time of this writing. By doing this, you can ask the officer to check and see if it’s clear of any claims – bank, financial, as well as if it’s loaned to any other individuals. It should be cited there since it’s the record history of the asset.
Note: Once you finished the payment. The title remains to the name of the owner. You will hand the original but your name will be at the bottom. - While at LRA or municipal hall, go to the Assessors office and you can get a Statement of Account and value assessment so you know how much to pay on a yearly basis. You don’t have to pay any amount for the SOA and assessment.
Tip #1: Pay December (a year before the annual year) so you can enjoy a 30% discount.
Tip #2: The SOA will give you a rough idea of how much the value of the property appreciates over time. You can then draw out your rental accordingly. - Contracts. You will need a Contract of Sale and Deed of Sale. Review, the terms, draft it out with the seller. Best to get it notarized at the city hall with both signatory party present.
Tip #1: it’s cheaper to do at the municipal hall since there’s a lot of attorney offices who can notarized, the price is relatively lower so don’t be afraid to haggle. Another saving tip is to get the contracts printed and in 4 copies. This will save you A LOT. Why 4? One copy goes to the attorney that notarized, one for you, one for the seller, and one extra in case the building needs it or government copy.
Tip #2: Settle who will pay the attorney’s fee for contract of sale, deed of sale, annual realty tax during payment period, transfer tax, acquiring auxiliary documents, capital gains tax (this is the biggest and usually 6% of the property amount), scope of responsibilities and encumbrances during sale period, Transfer tax, etc. - Before signing that contract, and this time around, along with the Seller, visit the Admin office of the building. Ask questions on how the transfer will be like, the requirements and such and formally inform them about the transaction in place.
- Check the unit and do an audit of the entire place well. Settle with the owner if there are things you wish to be replaced and fixed. Every nook and cranny. Request for an inventory list because If you’re buying a second hand unit, it’s most likely a furnished one aside from appliances, there are fixed assets like fixtures, lights, sink and lavatories, the work. It’s best to have this inventory list so when you’re ready to move in or if you wish to continue to rent out the unit, it’s easier to have a list in hand of what’s in there.
After Due Diligence is done and you’re satisfied, - Signing the contract. Make sure every pages is signed and you have a copy of their IDs. Have the document notarized and photocopy all of the papers you have.
- Have it notarized. Keep original and Photocopies.
Signing the contract. Make sure every pages is signed and you have a copy of their IDs. Have the document notarize and photocopy all of the papers you have.
After Due Diligence is done and you’re satisfied,
Signing the contract. Make sure every pages is signed and you have a copy of their IDs. Have the document notarize and photocopy all of the papers you have.
After this, just stick to the monthly payment and any payment obligations or terms stated in the contract.
What are the steps you will need to go through once the payment is completed?
Final tip, as a general rule of the thumb, your monthly payment should be 30% of your income. So weigh it first if it’s within your capability, think twice, read and prepare thrice. I hope this list can help you.
Purchasing a Second-Hand Condo in the Philippines could be difficult but when all is said and done, at last, welcome to the homeowners club!
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