PH Real Estate - 10 Things a Buyer Should Do Before Signing a Purchase Contract

Buying a property can be easy and quick if you know what you are doing, and is a gigantic task if you have no idea on how to go about it. The simple buying can become complicated when you are not guided properly. Your signature on the contract signals the commencement of a legal journey. Affixing your name on the documents, presages that you assumed all preparatory requirements.

Here are the tips you must know:

#1 – Ensure that the property suits your needs and preferences

Be sure that the property is what you want. Once you signed the contract there is no turning back. Most contracts do not provide for refund or return of payment if you decide to move out after a year. All the money you paid, the improvements you did on the property are forfeited. If you paid the full amount, may be you can get back a portion of it but definitely not all.

#2 – Check usage limitations of the property

Aside from the local zoning, check other constraints on the use of the property you wanted to buy. There are instances when you cannot use your house as your business office. These are variables you need to consider. It might affect your decision to buy the property. 

#3 - Check with your local Assessment Office and land registration office

One of the common mistakes that buyers commit is not validating the property with the local assessment office or land registration office to ascertain ownership of the property and determining the absence of encumbrances. Most of the time, the eagerness of owning a property is the culprit. Make sure the property is not mortgaged. The title must be clean.

#4 – Hire Experts

Having the backing of experts would result in a worry-free purchase. You may be thinking of the costs to hire these people but you need to consider the losses you may incur without expert advice. It may cost you millions over what you pay the experts. You can leave the headache to the experts. Let them give you the best buy you can ever imagine. You can get a lawyer, an appraiser and an engineer. 

#5 - Inspect the property 

Personally inspect the property to evaluate the state and condition. It would be best if you see the property with an appraiser or someone who knows real estate properties. It can happen that the property is sold higher than its salvage value.  

You also need to have it inspected by a building expert to check on the resiliency of the structure to disasters such as earthquakes and typhoons. The soil must be inspected too, to determine if it is suitable for buildings.  There are plenty of things you need to ensure about the property.

#6 – Consider the price and your finances

Can you afford the cost? If you cannot, are you eligible for a loan? These factors are critical if you are to consummate a purchase.  It is better to pay in full, if you have the capability. It will save you interests and other charges, if you are late in your payments. Have an expert calculate the price based on current evaluation. Do not rely on the sales speech of the agent or you lose money unnecessarily.

#7 – Factor in future repairs of the house

When buying a lot with a building, you must calculate the costs of repairs of the structure after a couple of years. Seasoned buyers are experts on the costs of improving and repairing a building but first time buyers do not have any inkling and may end up bankrupt in the end. You need an advice from an expert to guide you along this line. 

#8 – Review the Contract Stipulations

There are several contingencies that have to be incorporated in the Contract :

• The cost of the property
• Terms of Payment and Method of payment
• when is the property ready to be occupied by you or turned over to the buyer
• Terms in case of late payment. If there are late payment charges this must be specified in the contract and it must be reasonable.  
• Payment of taxes before closing the sale. The seller must shoulder the taxes until the sale is closed.
• Damage to property or loss to date of closing should be the responsibility of the seller. Whose responsibility is it when the property is damaged before it has been fully paid? This must be clear in the contract. 
• Earnest money must be returned to the buyer or applied to the purchase price of the property when the sale is done. 
• There must also be provision for utilities: water, electricity and sewer services. These must be provided to date of closing of the sale. The seller should cover for these utilities until the sale is closed.
• The termination clause of the contract. It might have gone beyond what are the allowable grounds for termination.

#9 – Go for a final assessment of the property

You have done your first inspection but it is suggested that you do a final scrutiny of the property before you sign the contract. Between the first inspections to the signing of the contract there might be things you overlooked. This is the best time to do a final round. Do not forgo this stage in the purchase. It is a critical. 

#10 – Be sure all the concerns have been addressed and cleared

Be sure everything is considered in the Contract. A concern may seem trivial at a glance but it can be a source of a huge problem later on. It is better to be clear in all aspects of the sale before consummation. This is to ensure that you have covered all the aspects that needed to be factored into the Contract or Agreement.

Hopefully, you are able to learn something from these simple but practical tips. Use these information and you are guaranteed to purchase a good home, while having an enjoyable buying experience. 

Tags:    property sale agreement, safety tips before signing purchase contract