Buying your first real estate property can be an overwhelming experience. When people learn that you are property hunting, all sorts of advice will come your way. Take the bad with the good, as people always say but how will you know which tips are right for your own property buying journey and which are not? Some tips would only make sense after committing a dreaded mistake while transacting with the seller.
Take every piece of advice with a grain of salt, if you must. Nevertheless, here are some of the most practical points and insights to keep in mind. Every first-time buyer must know that a reasonably steep learning curve is involved and finding the best real estate deals is not always easy.
Even before banks and other financial institutions figure into the big picture, you owe it to yourself to determine whether you can actually pay for the property or not. If you have enough savings to cover the down payment and the first three to six monthly amortizations, good for you. Your finances are in good shape. However, if you are struggling to come up with the down payment, delay the purchase. Resist the urge of buying any property just because of deep discounts and other promises made on promo materials.
Look at your current living expenses to know whether you can afford to buy a property that you have to pay for at least five years. Do you have a stable source of income? Do you expect your salary to grow in the next five years or so? If your answer is yes to both questions, then real estate purchase could be the most sensible thing to do now.
After evaluating your commitment levels and counting the associated costs of property ownership, now is the perfect time to assess the risks involved. You are responsible for knowing everything about the property you consider buying your first real estate property for real. Before you commit, however, it would be wise to weigh in on its life value which pertains to you as the owner and the people who will use this property in 10, 25, or 50 years.
If you don’t do this now, it may eventually turn into a liability instead of an asset. You may want it now, but may not so after you get married or your parents need to live with you or vice versa. Life events may change your financial capacity and your commitment to pay for the property as well.
With this said, you have to be 100% sure before you take risks and commit a sizable portion of your current savings. If there will be unexpected property maintenance when you move in or have it rented out, you are ready. While the property may appreciate over time, your financial responsibilities will change.
If you do not have a list of non-negotiables or features you cannot live without, create one now. This will be your reference whenever you need to evaluate a property. The items on the list are subjective but are based on your needs nonetheless. Always think about the overall utility of each non-negotiable on your list.
Compromises are inevitable because you may not always find a real estate property that has all the features you need unless you are building the property from scratch. If not, consider the trade-offs.
If there are trade-offs, you would inevitably introduce upgrades sooner than you think. Be easy on these, however. Do not turn your property into a money pit. If you are going to use the property for yourself, build and improve it intermittently, which means save enough money first for any improvements that you like to do.
Property investigators, including assessors, architects, or engineers focus on the technicalities such as structural integrity, design efficiency, etc. If possible, be present during the inspection. The information that these professionals will reveal to you will guide your decision-making. You’d know whether the property is worth buying or not. Inspecting the property is also part of due diligence.
Other than the actual property investigation, you should conduct your own evaluation. Again, this investigation is lenient to your needs and preferences. Are you particular with privacy? If you will assess the neighborhood like how far the next house from your home is, for instance, then you can easily weigh if the property is for you or not.
Aside from privacy and view, visiting during different times of the day allows you to observe the neighborhood. If the property you are eyeing is along a major thoroughfare or near amenities, chances are noise levels are high throughout the day or in mid-afternoon. This is especially true if you live near the airport or a few meters away from a flying school.
You need to consult with a real estate agent especially when you still lack knowledge despite reading real estate books and forums and attending a free real estate seminar.
A real estate agent can guide you every step of the way. Also, if you want, you may cover the basics first and when you get stuck, ask an agent to lend you a hand from that point onward. With this, you at least know how the process of buying a property in the Philippines goes.
What is good with having a real estate agent is he or she can effectively minimize the risks. The agent may also help in performing due diligence from scheduling site viewing to securing a copy of title certificates, for instance. Whichever areas you may need help in, do know they exist to prevent buyer’s remorse in the end.