Real Estate Terms Homebuyers Should Know - ThinkTank Thursday

One of the most crucial steps in closing a real estate transaction is finalizing the contract between the buyer and owner. As a buyer, you have to protect yourself by ensuring you understand the contract's terms and conditions to make an informed decision regarding the property. Take note of these real estate terms before choosing a condo in Makati or Bonifacio Global City and signing any document:

1. Buyer cost sheet: This sheet is not part of the contract; however, it is important to pay close attention to the amounts indicated on this sheet as it covers items and other fees you would be paying aside from the property's actual market value. Some items that you might see include: inspection fees, appraisal fee, transfer fees, down payment, closing costs, property taxes, homeowner's insurance, and homeowner's association dues. This is necessary to accurately check if you have enough funds to buy the property.
2. Disclosure/disclaimer: Unfortunately, no laws in the Philippines require homeowners to disclose everything they know about the property. Often, it is up to the buyer to ask the real estate broker or the homeowner about the history or possible problems of the property that can affect its value and desirability. It would also be advisable to find out the reason the homeowner is selling the property.
   Some questions you need to ask include:  Is the building prone to fires? Does the location pose a flood hazard? Is it on an earthquake fault zone? How is security and safety in the area?
3. Due Diligence: Verify the seller's title, representations, and other facts that can affect your decision on whether to buy a property. This is the best way to protect yourself from fraudulent homeowners.
4. Contingency: You should also take note of the contingency clause in the contract. This often includes the condition/s that must be met before it is considered legally binding, allowing buyers to cancel the contract if they are unhappy with the provided information in the documents. Contingencies are negotiable, so you can write your preferences (i.e. conducting a home inspection) before you purchase a property.
5. Earnest Money Deposit: Some homeowners require an earnest money deposit to make sure that the buyer is really serious about purchasing the property. Once the sale is closed, this amount will be applied to the down payment. However, if the buyer leaves without any fault from the seller, he may have to forfeit this deposit.

Purchasing a property can be very challenging in terms of handling the negotiation process as well as preparation of the paperwork required -- especially if you are a first-time home buyer in a foreign country like the Philippines. This is where the services of a real estate professional come really handy. Residential brokers can help you find properties that suit your budget and assist you in all aspects of the sale to ensure a smooth and legitimate transaction. Contact KMC MAG Group to know more about our tenant representation services in the Philippines.