by Raphael Santos
Buying real estate property is not easy. The time, effort and money involved is no joke. Checking properties online, talking to brokers or agents, dealing with traffic when viewing properties, due diligence on the property you liked and documents involved before and after buying.
After successfully buying a property, you will be tied up to it and if things didn’t go well on the property you bought, it will also take a lot of time, effort and money involved to sell.
In my experience, Knowing these 6 things can help lessen the headaches and the heartaches of buying a property.
Where should you buy a property? It depends on your reason for buying. Is it to shorten the travel time to work or to benefit from the appreciation in the future?
There are a lot of properties for sale. Unless you are just looking around, finding properties online and viewing personally is exhausting. Determining your target location helps narrow down your choices and lessens the hassle of choosing.
2. Time Table
When do you need the property? If you see the right property for you, will you buy already or do you still need to save up some money?
It’s nice to check properties to get a feel of what you want but If you’re seriously buying already, it’s useless to look around and not be prepared to act when the opportunity to buy comes. If you come across with the right property for you, and you still need 1 year to save up or to sell some assets, you won’t be sure that the property is still available when you are ready. If not, then you will start again on searching for properties, talking to brokers/agents, scheduling to view the properties and dealing with traffic when viewing.
3. Terms of Payment
How do you plan to buy? Do you plan to pay full cash or do you plan to take a loan from the bank? Can you pay the full down payment or do you need to get the terms on the down payment if there is?
If you are paying full cash on a property then there is a little or no problem on buying. Sometimes buyers that has enough cash to pay in full even have big discounts from developers or more negotiating power than those who don’t.
I’ve encountered a lot of property owners that foreclosed their properties because of not asking themselves the questions above. Some was able to pay the terms on the down payment but had a problem getting a loan from a bank after. So they settled with the developer’s high interest loan which they had a hard time dealing with the monthly payments and failed to pay eventually. Some didn’t reach the getting a loan part and already failed on the down payment and wasted their hard earned money.
Lesson from this is to make sure that you’ll be able to cover the payments involved on your purchase and specially making sure that a bank will grant you the loan before making a reservation or down payment on a property.
How much do you plan to put up on purchasing a property? Is your budget reasonable for the property you want to buy in the area where you want to buy? If you will get a loan or the terms on buying, can you cover the monthly payments involved?
Your budget has to be realistic. Even though some properties are negotiable, it will be a needle in the haystack to buy 10M worth of properties at a 2M budget. You have to know how far your budget can go.
Some look for a really big house in a really nice area at a really low budget. It won’t happen. You will just waste your time looking.
5. Due Diligence on Documents
It’s easy when you are buying directly from a reputable developer because few documents are needed, less due diligence necessary and they will do the process for you.
Buying from a secondary market is different, you will have to do all the work yourself and if you are not familiar with the documents needed, it might cost you millions of pesos and tons of heartache similar to a heartbreak from your first love. Haha!
Luckily we are in the age where information is abundant which you can easily read online just like you are doing now. Here are the basic documents you need to get when buying a property.
6. Getting a Professional Help
If you don’t have the time to do the things yourself, it is good to get a professional help when buying properties but you still have to consider the following things to protect yourself:
These are the 6 things I check with my clients that are looking to buy to help them clear things up, lessen the hassle, make them more relax and excited on purchasing properties. I hope it can help you too.