Buying a condo or a house and lot can be a daunting process. And with the booming real estate market in the Philippines, you’ll find yourself competing on an attractive property with another buyer who has an open budget.
So how can you compete as a buyer in a hot competitive market like the Philippines? Here are our tips:
1. Know the real estate market enough for you to make confident decisions.
Joey Roi Bondoc, research manager at Colliers International Philippines, disclosed to the Philippine Daily Inquirer that there are certain growth drivers and trends that could present opportunities to a real estate investor. He said, “We expect sustained economic growth in the next 12 months and this growth should sustain the growth of the property market.”
So what kind of growth should we expect this year? Check out this infographic of the country’s market conditions:
Now why should you be acquainted with these? Diving into something that you don’t know about can cause some self-doubt, even if you’re working with an accommodating broker. At best, it will be your name under the sales contract; hence, it’s up to you to determine whether you’re getting the best offer for a property you like, and whether it makes sense to offer a competitive offer or let it go.
2. Patience is key.
There will always be issues when it comes to buying and selling real estate in the Philippines. Agents will also assure you at the onset that you will have a smooth transaction should you decide to tap his or her services. But in reality, there is no such thing as a perfectly smooth transaction.
Naturally, there will be tips online that will tell you how to deal with the issues going on in the home-buying process, but the real takeaway is this: always be reasonable, roll in with the punches, and work with your broker or agent.
3. Make smart and competitive offers that do not undermine your broker’s professional value.
Knowing how much can you afford puts you in good footing with your broker or agent. If you aim for a project that’s worth more than your entire budget and you subsequently ask your broker or agent for a discount, you are not just devaluing your prospective property’s market value but your broker’s profession as well.
Do note that some aggressive brokers and agents would go to great lengths to reduce the contract price on the property you love, like take a commission pay cut for example, in the hopes of closing a sale. Most brokers will not work with a client who pushes them in a corner.
Lowering your expectations (like finding properties that are priced below the budget), will allow you to make competitive offers to your broker and agent, and therefore turn the offer in your favor.
4. Trust the right broker or agent.
A Philippine real estate veteran would say that a big chunk of the home-buying success depends largely on your trust with your broker. The problem is choosing the right person to trust.
A good real estate broker or agent will, first of all, put your interests above the rest. He or she also sees the value of waiting and seizing the right property or deal. A good real estate broker or agent delivers long-term value to his or her clients, and provides support well after the sale has been closed.
It is important for you to perform due diligence as well. You will be entrusting your broker to work on a million-peso transaction with your hard-earned money, so it makes senses to determine whether he is legit or not. Don’t hesitate to ask for the broker’s license number with the Professional Regulation Commission (PRC). If he works for a real estate brokerage firm, ask for proof of affiliation.
5. Prepare your finances.
The number one reason why the sale falls through is because of home financing. Sure, you have money set aside to make an earnest deposit. But it is also equally important that you yourself make sure that there will be no glitches on your home financing.
Unless you’re paying in cash, getting pre-approved (and not pre-qualified) on your home financing in advance will help fast-track the sale. Pre-approved means that your home financing will be approved once an offer has been placed. Pre-qualification only means that your lender declares that you qualify for a loan, but doesn’t mean that it will back you up once an offer has been put up. As such, have all your paperwork in order, and be ready to document the funds you’ll use for your down payment.
6. Be prepared to move fast.
By definition, a buyer’s market means that goods and services are plentiful, and that buyers literally have options to choose without experiencing a price increase. Because you are in a buyers’ market, delaying on what could be a great property deal won’t do you much good.
Waiting around for the next property deal may sound strategic, but it will not be for high-return properties such as those located near central business districts or at locations that are part of a city development plan. Not only will someone else put up a better, competitive offer, you’ll also risk interest rates on financing going up as well.
7. Help your broker.
As much as the broker is obliged to assist you in every way once you put on an offer, you are not entitled enough to make your broker wait for your response. Remember, he is probably assisting other clients who are easier to work with, and will definitely assist those who are actively participating in the home-buying process.
Being informed, patient and aggressive is critical more than ever if you want to invest in a home in the Philippines. And with a robust market, you are in an awesome position to reap the rewards of your future investment in this growing market.