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Important Informations About Real Estate in Cebu

HMDF Loan Policies (Pag-ibig)
15 ways to prevent your home from repossession
Steps in Pag-ibig Loan Application
Pag-IBIG lowers housing loan rates effective July 2016
Metro Pacific awarded to construct 3rd bridge
Philippine Real Estate Laws Ownership, Practice, Taxes
Cebu Projects and Construction directory
Condominium and House and Lot ownership
How To Detect Fake Titles
Understanding Real Estate Terminologies
Is Buying Foreclosed Properties A Good Deal?
Forms of Contracts Under Philippine Laws
Development of Cebu's SRP
National Code of Ethics in Realty Service Practice
Real Estate : How To Stay Positive in Today's Market
10 Tips in Buying Real Estate
27 Ways to Secure Valid IDs in the Philippines
Buying a Condominium in the Philippines
Cebu: Promising Area for Global Investments
Investors pour P4.7B in Lapu-lapu City, Mactan Cebu
Business' plan for Mactan
Cebu Trans-axial project now with Eco Enterprise Council
Cebu North coastal road may cost P2.3B
Cebu now top choice for BPO expansion
Becoming a Real Estate Salesman in the Philippines
Developing a Residential Condo in the Philippines
The Concept of Philippine Condominium Ownership
Invest in the Philippines
P 30B earmarked for low-cost housing loans
Effects of RA 9679 on OFW Pag-IBIG members
HDMF REQUIREMENTS
P1B Mingla reclamation project endorsed to PRA, Neda
Friendship Bridge to link Cebu, Bohol
MCIA Passenger Terminal Building
Mactan airport terminal 2 to open in 2018
DOH advises to close Inayawan landfill

Buying a Condominium in the Philippines

Buying a Condominium in the Philippines 

Looking for a condominium to purchase will take some time and effort. With the many condo projects existing, being built or at the pre-selling stages, the potential buyer has to be informed of his many options. The potential buyer has many sources of preliminary information for his condo selection process, such as billboards, newspaper and magazine ads and write ups, flyers and brochures, the internet, family, friends, associates, brokers and agents. The most important thing for the pontential buyer is to make up his mind with regard to the location and his budget. But due to budget limitations, many buyers are forced to look elsewhere other than their first choice of preferred location. This is where the help of brokers and agents are needed.

Care should be taken when buying a condominium in the pre-development stages. For some projects, it is really difficult to judge the outcome since some projects are being pre-sold for years before the building is to be completed. Check all the necessary documents and check the site to be sure where your unit will more or less be. By going to the site, you can see the surroundings, which you may have overlooked or assumed otherwise. In many cases, the brochure will show the area is near the mall, commercial centers, etc. The brochure may not have indicated the kind of traffic in the area, the narrow roads, the atmosphere (industrial, residential, mix, rural) the kind of community, or squatters nearby etc.
BUYING CHECKLIST
Documents -- Check if the developer has obtained all the necessary documents from the concerned agencies. Although License to Sell is one of the major requirements, it is not a guarantee that the project will be finished. Check the other requirements such as the Contract to Sell which one may find not to ones liking in the contract. the CCT, latest tax declaration and tax receipt for the condo unit. Other documents such as Master Deed and Declaration of Restrictions and House Rules are only showed to buyers who have already reserved for a unit

Track Record of the Developer -- Check what the past developments were, if the project was done with the customer in mind, if the developer or chief officer has scandalous legal cases before.
Density of the Building/Project The unit may be affordable but problems may arise later on as there may be too many residents in the building or project that it may just look like a tenement five years from the present.

Parking Slot and Utilities -- A number of parking slots are too expensive. In majority of cases, the parking slot is not included in the total selling or contract price of the unit. some units are not allocated a slot or limited only up to one or two slots depending on the unit purchased. Some projects don't have enough water or their phone land line will take a few years to be operational.
Payment Terms The payment terms may look easy but just ask what the consequences are if one is not able to pay up on time. There are developers who are very strict when it comes to paying on time.

Miscelleneous / Transfer Fees -- The miscellaneous (electric meter, notarial fees, insurance, etc.) and transfer fees are not included in the total contract price. These fees are paid only when the buyer has fully paid for the unit or will obtain a bank loan.

Association Dues -- The dues are quite high for some projects. The buyer will have to start to pay the dues upon the turn over of the unit to him or even before that, whether he will live in the unit or not. The start of the payment is written in the Contract to Sell. In some cases, there is a one-time membership fee to be paid plus two months advance for the dues.

After the initial information and explanations, the potential buyer has to go to the site itself to get the feel of the atmosphere. Example, buying a penthouse unit in a twenty-storey building in one area may have a good view for the next five years after the completion of the building. But may be in eight years time, a taller building will be built opposite or beside it, blocking the view, which defeats one of the prime considerations why one chose the topmost floor - the view, the prestige and the privacy of living on the highest floor.

ADVANTAGES

As an end-user buyer, buying a condominium is a great way to buy a place in a very urbanized area. There are many advantages in buying and living in a condominium compared to buying a house and lot. The following advantages are:

Location. Many condominium unit are built in an area that is convenient, and practical. Many projects are accessible to public or mass transportation, near commercial areas, schools and offices. Travel time is minimized and the buyers will have more time to do other things. At other times, the location enables the buyer to have a breathtaking view of the sea, golf course, the city or mountains from afar. Unlike living in a house and lot subdivision, the view is many times limited, unless it is a secondary or vacation house with good view of the sea or mountains, although there are exceptions.

Amenities. The many amenities in many mid range residential condo projects is almost complete that the buyers don't have to go to other places to swim, work out, relax and entertain their guests. The people maintaining the building also will handle the maintenance of the gardens, cleaning of the common areas and parking lots, removal of trash, 24-hour reception and security, and screening of people wishing to visit the occupant. Many condo units when finished are ready to live in, with a few minor touches to do. A building administrator for a mid cost condominium related that there are buyers who have their own houses and apartment units, but they prefer to live in their mid cost condo units, because of the conveniences and security for the area. One occupant related that he could just instruct the guard to call the taxi for him anytime of the day or night. And the maintenance is much cheaper than maintaining a house. Unlike living in a house, one does not have to bother opening and closing the front gate for the arrival or departure of the car, either by oneself of the household help.

Price. The price of condos is debatable. Usually it is very high for most people. Even for the ordinary OFWs, the condominium projects need to be accredited by the PAG-IBIG for them to be interested in the units. The OFWs need to avail themselves of a bigger loan with longer payment terms and lower interest from the government. But given the convenience of the location and the amenities, the price is generally justifiable.

Cost of Maintenance. The monthly association dues although high in some, condo units, are still generally less than maintaining a house and lot. There is no need to shoulder the cost of building and maintaining a gate and a perimeter wall on one's own. When the condo unit occupant wants to have some repairs and maintenance of his unit, he does not have to look for a repairman. All he has to do is call the in charge of the maintenance and the repairman will be there in a few minutes. Imagine the cost of renovating the whole house after 5 years to compare it with renovation of only the interior of a condo unit as the exterior is already covered with the monthly association dues

DISADVANTAGES

It is impossible to find a perfect residential condominium or house; there will be always pros and cons in buying, and living in one. Generally, you get what yoy pay for, that is, the more expensive the unit, the better the location, the features, amenities, unit size, parking slots, etc. But the majority of condo buyers will not be able to afford the high-end or luxury units, so a number of them will encounter some problems. The disadvantages and usual problems are the following:

Size. With the exception of large luxury residential condominiums, the size of the unit itself is a problem for most buyers, since it is usually quite small. The bare unit as envisioned or model unit as seen by many buyers looks large enough to live int, that is before they start to place more furniture and things in the room and the dining area. The bathroom is also sometimes incredibly small where in some units, the shower head is just above the toilet. There are townhouse condo units that are worth many millions of pesos, but to save space built the stairs for the units so steep that's prone to accident. Those who are used to living in a large house and lot will have to adjust their expectations and excitement in living in a condo. For one, many of their accummulated things over the years will not fit into their condo units. They have to throw, give away, sell or just leave many of their things in their parents' house. Usually the room is good only for a bed and a small closet; there is no closet for ones books, books, sporting equipment, etc. The small kitchen area lacks space for the numerous kitchenware and appliances and dining wares. The drying area for the clothes, if there is any is not sufficient for bed sheets, bed covers, or the numerous clothes of the occupants. Sometimes developers would include some areas in the quotation such as the hallway in front of the unit, drying area at the roof and the parking area as part of the floor area being marketed. So, prospective condo buyers should ask if the floor area is really the unit itself of if other areas are included. Given the financial realities, most buyers would adjust their expectations and lifestyles based on the size of their unit. Most of them will settle for a smaller and more practical furniture, limit the number of guests to their place, etc. On the other hand, other unit owners maxmize the space of their units by having many things, people and pets their unit can handle. It is common to have a middle class buyer with his wife and two kids plus the maid and pets trying to live in a two-bedroom 55 square meter housing or condo unit. With that number of occupants in the unit, the place will almost always get cramped especially if the children get bigger. This is especially common for low cost or affordable condos where some families cramped in an 18 to 25 square meter unit. if one of the family members get sick with a contagious disease, the rest will easily get it. Most of the time, there is also lack of privacy, especially if the couple engage in some heated arguments. If one is looking for some space and privacy, one has to buy at least a 130 square meter unit. Some of the amenities for projects for small compounds also have small amenities. The size of the swimming pool is not that big, the size of the function room is small, the gym is tiny, etc. Even if the condominium has many amenities, it is not possible for the occupant or his family to make use of every single amenity in the building regularly. The occupant usually can only use one or two of the amenities regularly.

Restrictions. In terms of exterior design, the buyer cannot just renovate or repaint as he pleases, since there has to be some uniformity for all the units which is specified in the house rules of deed of restrictions. For example, one cannot just repaint the front door brown if the colors of the front doors in the condominium are white. Some condominiums would only allow certain color shades for the curtains and venetian blinds of the unit occupants. This is to ensure that the unit looks clean from the outside. The administrator and security guards will most often give up on reiterating the house rules to some hardheaded residents, so they begin to tolerate minor infractions of the residents. But if the developer and association have a reputation and imeage to protect, even minor infractions are not tolerated. Most, if not all of the condominium associations would strictly not allow anything that will affect the structural design and integrity of the building. These include the breaking down of conrete walls to create more space, moving the bath tub to another location, changing the size of the windows, moving or removing of sprinklers and smore detectors, etc. Some condos will not allow buyers in the upper floors to change the wooden floor parquet to floor tiles to granite or any other heavy flooring due to the weight it will add to the computed bearing load of the floor. Even if there are open spaces and many amenities in large condominium projects, gone are the days when children can pick up fruits from trees of their own or their neighbor's backyards. There will be no more climbing and playing around trees anymore in condominium projects. Adults who love outdoor gardening can no longer engage in their past time since majority of condos do not have enough space for real private gardening. Pets will have to be limited to ones that fit in small cages, aquariums or containers.

Parking. Without doubt, this is the main problem for most condo buyers. Different cities have different parking requirements for condo development. In Mandaluyong city, it is one parking slot for every 75 square meters of floor space. In Quezon City, it is one parking slot for every unit in the building. Many, if not most condominium projects do not have enough parking spaces for all the unit buyers. This is due to the high cost of building parking spaces in a very limited are. The cost of building a multi level parking, whether it is in the basement or not is costly for the developers. so, a number of developers just apply the minimum standard of one parking per 100 square meters. That translates to roughly about one parking for every four 25-square meter studio units. For small areas where a residential condominium tower is going to be built, most developers would just allocate parking spaces on the assumption that most studio and even one-bedroom unit buyers will not need a parking space since the projects are accessible to most public transport. As a result, there are times when parking slots are fully sold and additional parking slots cannot be made anymore. Even some high-end projects sell their parking slots on a first-come first-serve basis. But there are times when the project is located in a big compound; the developers would just wait and see if there is a demand for parking slots; if there is no demand, they will not build anymore that what is needed. Sometimes some developers build a parking building in one building site if the need arises. The lack of parking slots gives the buyer no sense of long-term security since he will not know where to park his future car/s. For many studio unit buyers, a parking slot is not allocated. If it is not possible to purchase one slot, the buyer will just have to rent one. For the majority of the projects, the price of the parking slot is separate from the total contract price. The average price of parking slot in Cebu for example is about P450,000 per slot. The parking slots are sold either with their own separate Condominium Certificate of Title (CCT) or a Certificate of Management. The latter if used by the developer so that real estate tax payments can be reduced, especially before the lots are sold. But since the Certificate of Management is not honored by banks to be mortgaged, most parking slots in various projects are assigned with a CCT. Just like condo units, the prices or parking spaces also vary in terms of location. A parking space at basement level four would generally be cheaper than a parking space located at the ground floor. Likewise, an open parking space is cheaper than a covered one. Buyers of condo units in the pre selling stages should be way of the size of their parking spaces. Although model units are nice to look at, the parking slot may just be too narrow or too short for their cars. Even a 12.5 square meter minimum size requirement could be too short or a bit narrow for large vehicles to maneuver in and out. With the problems in parking, many buyers rush to get the best parking slots when a new condominium is at the pre-selling stages leaving others with no so good parking slot or type of parking slot, unless the parking slots have already been determined by the developer for each particular unit. The lack of parking slots is also a problem for the guests. In many condominium projects, the parking slots allocated are not enough given the many occupants in the project. If the slots are already filled, guests will have to park elsewhere usually along the private road outside the building if they are lucky enough to find a space. Sometimes the parking of the guests outside the condo building causes some heavy traffic jams.

Association Dues. On top of the utility expenses, the occupant must also pay for the monthly dues. The dues are for security, upkeep repairs and maintenance of the building, the amenities, landscaping, etc. The total monthly payment of condominium dues of a single unit at mid cost condominium for one year is usually more than a yearly association dues of a house and lot in most decent subdivisions. The dues are computed by the multiplyng the number of square meters of the unit by the rate of dues per square meter. In Cebu City for example the rate of condo dues vary from P40.00 to P50.00 per square meter. The rate is determined by the developer first, then by the condominium association after the turn over. The dues are on the maintenance, security , taxes and other necessary expenses.

By Edward L Tan. Author of "Residential Condominium, Development and Living"
 
 


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