You’ve probably come across a pamphlet advertising pre-selling of condo units for what seems like a great bargain. Low prices sure attract a lot of interested buyers, but don’t bite in just yet.
When it comes to condominium pre-sales, it’s important to remember that there will always be a couple of fees you will need to pay before you can purchase the property. These are called upfront costs, and they serve as an obstacle for every Filipino homebuyer.
Purchasing a home is an investment that pays off. To help you prepare financially for this undertaking, get acquainted with the four upfront costs you’ll come across before you can close a deal.
For condos, you’ll need to pay these upfront costs:
1. Reservation fee
It’s common for local real estate developers to require interested buyers to pay a reservation fee, whether it’s for units that are available for pre-sale or are ready for occupancy. The fee, which can amount to over P25,000, is highly dependent on the value of the property you’re interested in.
As its name implies, paying the reservation fee removes the property from the market, effectively reserving it for you for a period of time (also called “validity period.”) Be sure to pay the follow-up payments before the validity period expires, or else the developer will forfeit your reservation.
In case you set your sights on a different unit from the same developer, you can transfer the reservation fee, which also forms a part of the down payment. If you decide to cancel, however, be aware that the reservation fee is absolutely non-refundable.
2. Spot cash down payment
One of the most common payment schemes in the Philippines, spot cash down payments usually range between 10 to 20% of the total contract price. You’ll be required to make the payment after placing your reservation fee within the validity period.
Should something arise and you’re forced to cancel on the sale, it entirely depends on the contract or any written agreement whether your down payment is refundable. In some cases, you may get a 50% refund, a full refund, or no refund at all. The circumstances that led to your cancellation also affects whether you can get a refund or otherwise.
3. Monthly amortization
Once you’ve placed your reservation fee and the initial down payment, your remaining balance will be paid in the form of monthly payments. Monthly amortization is paid within a specific period of time, that’s why it is imperative you read your contract carefully and double-check the fine print to avoid any issues.
To make it easier on the wallet, be sure to set aside around three month’s worth of monthly payments before you sign the deal. This way, you won’t be struggling to make ends meet just to pay your amortization fees for the following month.
4. Other fees
You’ll have to fulfill a couple other payments, especially if you secured a loan for your real estate investment. One example are registration fees, which is required by banks whenever you apply for a loan.
Are you interested in purchasing your own condo in Bonifacio Global City? You might find this article interesting. Check out: BGC’s 2016 Most Expensive Neighborhoods.
