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Home Buying Guide

Buying Guidelines in Philippine Real Estate
 

HOME BUYING GUIDELINES


Investing on your first home could be one of the biggest decisions you’ll ever make.So before you start spending your hard-earned cash, get the lowdown on how to spot the right property or save on building costs, plus other useful tips.

 

THINGS TO CONSIDER WHEN INVESTING ON YOUR HOME


Buying a house is not a simple matter of finding one that "looks good". Believe it or not, there's more to it than just that. Aside from your personal preferences, here is a list of things to consider to make sure that your investment is worth your while:

Here are some things you should know about owning a home:

The Type of Home Best Suits your Needs.

The Type of Home Best Suits your Needs.

  • Do you prefer a high-rise condo, or a secluded abode near the woods? Are you looking for that quaint Victorian with the picket fence? Do you want a bungalow, so your elderly mother can move in with you? Or do you need a two-story family home with a two-car garage and multiple bedrooms to accommodate the different schedules and lifestyles of all your family members? If possible, choose a home that reflects your needs and personality.
  • What are your plans for the future? Are you the confirmed bachelor or the family man? How big a family are you planning to have? Although your needs may actually change along the way, the point is that you must evaluate your over-all space needs now and for the future. If you think that you might need more space someday, look for a property that will allow just that.
  • Evaluate your overall space needs. How big a family do you have or intend to have? Adequate living areas, bedrooms, toilets and baths should be thought of in advance.
Your Lifestyle

Your Lifestyle.

  • The size of house you need will have a lot to do with the kind of life you lead. Do you like keeping to yourself or are you the type who likes doing a lot of entertaining? Then maybe you'll need a big kitchen or a large dining hall. Do you have young children? How about pets? You may then want a big garden or lots of space to allow them to move about. How big a garage do you require?
Consider location.

Location, Location, Location

  • Do you require or want one near the city or do you prefer the suburbs? Is the property easily accessible or does it necessitate having one's own vehicle? Is it near a commercial area or an industrial zone? How is the peace and order situation in the vicinity? These are but some of the things you must consider in opting for one location over another and will have a bearing on the property's appraisal value particularly should you choose to sell it in the future.
  • Consider the availability of basic utilities. After all, you wouldn't want to be stuck with a seemingly terrific property without adequate water or electricity.
Budget

Your Finances or Budget.

  • Evaluate your financial situation and analyze your budget as to how much you can set aside for monthly amortization without compromising your other household expenses.
  • Determine how much you can put up as initial down payment.
Pet-Friendly Dwellings

How about pets?

  • It’s heartbreaking to learn that you have to give up your dog or cat, because the homeowner association rules don’t allow pets in your new building. Some condominium buildings have restrictions on pets, or place limits on the size and number of pets you can have, so make sure you find out before you sign the contract. If you’re looking for a single-family home, check to see if the backyard is fenced to safely allow your dog to go outside. Will it be easy to walk your dog through your neighborhood streets on sidewalks and away from busy roadways?
Resale Value

Resale Value

  • Make sure you a buy a home that fits in with the preferences of other homebuyers in your area, such as number of car-garage or the number of bathrooms and bedrooms
  • Check to see if the homes in the area where you want to buy include a lot of foreclosures, which could negatively impact the home values in the area for a long time
 

PROPERTY OWNERSHIP


RIGHT TO OWN

Those entitled to own property as fully-fledged Philippine citizens:

  • Philippine citizens who are residents of the Philippines
  • Philippine citizens who are residents of another country or working overseas who maintain their Philippine citizenship
  • Philippine dual citizens
    • Natural-born Philippine dual citizens (Those born with a Philippine and foreign citizenship as a result of the concurrent application of the laws of the Philippines and a foreign country which consider one a citizen of each country, e.g., those born to a Filipino and foreign parent).
    • Natural-born Philippine citizens who subsequently acquire foreign citizenship involuntarily (i.e., without undergoing foreign naturalization, e.g., marrying a foreign national whose country automatically considers the Philippine spouse its own citizen) and who have not renounced their Philippine citizenship by any act or omission.
    • Natural-born Philippine citizens who voluntarily opted to acquire foreign citizenship but eventually chose to reacquire their natural-born Philippine citizenship status under the Philippine Citizenship Reacquisition Act of 2003 (Republic Act No. 9225), regardless of whether or not they have renounced their previous foreign citizenship.
    • There are no area limits on the ownership by Philippine citizens of non-agricultural private land. Private agricultural land acquisition must not exceed a combined total of 5 hectares (50,000 square meters).
  • Philippine corporations whose capital stock is 60% Filipino-owned
    There are no area limits on the ownership by Philippine corporations of non-agricultural private land. Philippine corporations may lease, but not own, public agricultural land not exceeding 1,000 hectares for two 25-year periods and own private agricultural land not exceeding a combined total of 5 hectares (50,000 square meters).

Those entitled to own property under limited conditions:

  • Natural-born Philippine citizens who voluntarily opted to acquire foreign citizenship through naturalization, thereby renouncing their Philippine citizenship, and who do not choose to reacquire Philippine citizenship.
    Unlike Philippine citizens, former Philippine citizens who are natural-born Filipinos* are only entitled to own either 5,000 square meters of urban land or 3 hectares (30,000 square meters) of rural land in the Philippines for business or other purposes. The land that may be acquired shall not be more than two parcels situated in different municipalities or cities anywhere in the Philippines and shall not exceed the stated area limitations. Anyone who has Already acquired urban land is disqualified from further acquiring rural land and vice versa. In the case of a married couple, the total land area that they are allowed to purchase cannot exceed the above-stated limitations.
  • Foreign citizens and corporations.
    Foreign citizens and corporations may acquire and own condominium units where the common area is owned by a condominium corporation, 60% of which is Filipino-owned. They cannot directly acquire and own land in the Philippines except through intestate hereditary succession, i.e., inheritance by operation of Philippine laws on intestate succession and not by testate (through a will or testament) succession. They may, however, indirectly own land by subscribing to a Philippine corporation the capital stock of which is 60% Filipino-owned. They may also lease private land for a maximum of two 25-year periods.
    Foreign citizens and corporations investing in the Philippines may lease private land for a 50-year period extendible for another 25 years.

MODES OF ACQUIRING LAND

  • Private Grant.
    Voluntary transfer or conveyance of private property by a private owner, such as sale or donation.
  • Public Grant.
    Acquisition of alienable lands of the public domain by homestead patent, free patent, sales patent, or other government awards.
  • Involuntary Grant.
    Acquisition of private party against the consent of the former owner, such as foreclosure sale, execution sale, or tax sale.
  • Inheritance.
    Acquisition of private property through hereditary succession.
  • Reclamation.
    Filling of submerged land, subject to existing laws and government regulations.
  • Accretion.
    Acquisition of more lands adjoining the banks of rivers due to the gradual deposit of soil as a result of the river current.
  • Prescription.
    Acquisition of title by actual, open, continuous, and uninterrupted possession in the concept of owner for the period required by law.

LIMITATIONS ON RIGHT OF PROPERTY OWNERSHIP

  • CONSTITUTIONAL.
    such as police power, eminent domain or expropriation of private property for public use, taxation and escheat when revision of private property to state ownership in case of death of property owner without an heir;
  • LEGAL
    zoning ordinances, regulations on subdivision projects, building code, and other special laws and regulations; and
  • CONSENSUAL/VOLUNTARY
    easements and servitudes, usufructs, lease agreements, restrictions in subdivision and condominium deeds or restriction.
 

DOCUMENTS TO ASK FOR BEFORE INVESTING


Here are some documents a homebuyer must remember to ask before investing on any property in the Philippines, specially if you are buying a single property from an individual:

Certified True Copy of Transfer Certificate of title
  • Make sure the "Transfer Certificate of Title" is authentic.
    The easiest way to check if the title to the property you are buying is authentic is by getting "Certified True Copy" of the title from the Register of Deeds. This office is usually located at the city or municipal hall where the property is located. Ask the seller of the property for a photocopy of the title -you will need the title number and the name of the owner to get a certified true copy of the title from the Register of Deeds.
  • Verify that title is clean - meaning the property is not mortgaged (no liens & encumbrances on the property.
    You can see that at the back of the title with the heading "Encumbrances". This page must be empty if you are told that the title is "clean". But sometimes the space for the technical description of the property on the front page of the title is not enough and the description of the property is continued on the "Encumbrances" page, this is of course all right.
  • Make sure that the land described on the title is really the land that you are buying.
    You can validate this at the Register of Deeds or by hiring a private land surveyor or a geodetic engineer. Land titles don't have any street name and number to pin point a property, it is a must to confirm that the actual property you are buying matches the technical description on the Transfer Certificate of Title.
Certified True Copy of Tax Declaration
  • Make sure that the sellers are the real owners.
    If you are buying from an individual property owner, ask for identification papers like passport or driver's license, it is also a good idea to talk to the neighbors or the Barangay Captain to confirm the identity of the sellers (you might as well ask some history of the property).
  • Confirm that the yearly real estate taxes are paid.
    Ask for certified true copies of the Tax Declaration and original Tax Receipts to confirm that real estate tax payments are up to date.
Checklist

If the above checklist is in order, it is generally safe to proceed with the purchase of real estate in the Philippines.