PH Real Estate - 7 Cardinal Rules before Buying a House; A Must Read for Prospective Buyers

Looking for a house is a task that should be taken seriously. No matter how enthusiastic you are, you have to create first your own cardinal rules to guide you in the process. These rules will ensure that you don’t commit ‘mortal sins’ in finding a new home.
What are these cardinal rules that you must take into account? Read on.

7 Cardinal Rules before Buying a House:

1. Pertinent documents of the real estate property should be shown upfront.

Until you have personally seen the house and land title, and the receipt of the property taxes paid by the owner - you should not negotiate further. The realtor or agent has to produce proof that the property is not a lien or collateral for any of the owner’s outstanding bank loans. The real property taxes must have been paid on time, without any delinquencies. Read the all the related documents carefully and verify that the authorized signatories are genuine. Don’t take their word for it. Visit the concerned agency itself and verify if the property is, indeed, listed under the owner’s name.

If you’re not confident about your skills in verifying the documents, you can always employ a trusted lawyer to do it for you. You wouldn’t want to go through all the process of purchasing the house, only to learn later on that the property is heavily mortgaged, would you? For that reason, this is the first step that you should accomplish.

2. Strike a good bargain.
To be able to do this you must know the actual price of the house. You can do this by hiring your own appraiser to assess the true value of the property.  Afterwards, you can haggle over the price of the house with the agent or the owner of the property.

There’s always room for bargaining, if you know how to play your cards right. Set your appropriated budget secretly. Start bargaining with a lower price than your budget. Gradually increase until you have reached your appropriated price. That’s when you put your foot down and say, “Take or leave it.”

Of course, you can always adjust your financial budget, if you so desire. This will depend on your financial capability.

An example is this:

• If the appraisal value of the property (house and lot) is 2.4 million, you can set your buying price at 2.3 million or 2.4 million.
• You can start your bid at 2 million. Gradually increase the price in increments of 100,000 until you reach 2.4 million. Take your time bargaining to get the best price.

Rest assured that you will get a lower price than what’s reflected on the broker’s property list.

3. Inspect the house yourself.
You must inspect the house yourself to truly be abreast of the house’s condition. You can also hire a trusted inspector to go with you. In addition, you may want to invite an electrician to inspect the electrical system to ensure that it’s safe.

An architect or engineer can assess if the house is structurally sound, and a plumber can check the drainage, the taps and the water system for leaks and damages.

4. Check that the amenities are satisfactory.
You may have selected the house because of the amenities that were included in the sale, so you have the responsibility to inspect them. Ascertain that they are working and in good condition. Examples of these are: a music room, a pet house, a playground, a fountain, or a swimming pool. If any of them are in need of repair, you should negotiate a corresponding discount from the seller or the owner.

5. Any payment given must be duly acknowledged.
Payments that you have given must be duly acknowledged by the owner, or his authorized representative. The receipts must also be signed properly. The receipt must be official, with a BIR number. Don’t accept temporary receipts; they won’t count in court. Kiss your money goodbye, if you don’t take heed of this cardinal rule. Only an official receipt can prove that you have paid the seller.

And don’t pay unless everything is in order. If the seller says he will put everything in order the next day, then, you should pay the following day, as well. Let the owner or seller fulfill his words first before you part with your money. There are devious sellers/agents/owners, who won’t fulfill their promises after they get their hands on the money.

If the broker or the agent has made those promises, the owner may not even blink an eye in breaking them. After you have given the payment, even if the owner doesn’t honor the agent’s promises, you cannot do anything. You’re helpless when this happens to you because your leverage (payment) is gone.

This is because most owners will include in the contract a clause that states they are not responsible in honoring the promises made by the real estate agent. To prevent this from happening, any promises made by both owner and agent must be included in the contract. The contract must be properly signed by the agent, the owner, and you, as the buyer.

6. Choose a safe and secure neighborhood.
Who are the people in your future neighborhood? You must have done your reconnoitering activity days before deciding whether to buy the property or not. Choosing a friendly, peaceful, safe and secure neighborhood is a cardinal rule that you should follow.

Gated properties are best because security guards and CCTV cameras generally secure the area. In your own house, you should install a security system too. There are various types of lights that have motion sensors. Most of them can detect movement a few feet away. When motion is detected, these lights are turned on automatically, illuminating the space. The bright lights and the burglar alarm would warn you that an intruder has entered your area.

7. Major establishments and basic services must be readily accessible.
The last but not the least, ascertain that major establishments, such as schools, convenient stores, hospitals, police stations, and malls are easily accessible through public utility vehicles, or through private vehicles. You may want to look into the location of washing and water stations too. Remember to locate your places of worship, as well.

Being near parks and sports and recreation centers can have rewards too. So, choose a house near these places, especially if you have children.  

These are the 7 cardinal rules that you must observe before finally buying the house of your choice. There’s no harm in following these rules. They will help you in acquiring your new house without encountering any problems.

Tags:    Guide on Buying a house for Prospective Buyers