Buying
A Buyer’s Guide to Pre-Selling Properties and Ready for Occupancy Units
There is no question that the Philippines’ biggest metropolis is what is now considered to be a concrete jungle. With barely any lush greenery left in its cities, it has effectively become a congested heap of concrete metal and asphalt over the years. In this regard, it would be no question that the top developers of the country would see this as a prime opportunity for progress and make Metro Manila conducive for living once more.
After all, the city is known for its limitless opportunities for career growth and job openings, so it would only be understandable to see an influx of prospective residents looking to find an appropriate abode in the bustling city. Finding a place to live in Metro Manila is not so much of a challenge seeing as almost every nook and cranny in every major city is teeming with condo developments. Searching for an affordable one, however, is an entirely different ball game and it leaves you with very few choices. You might sooner find an affordable condo in Cebu than you will in Manila, but I digress.
In your endeavors of finding a condo, you might come across several properties that are still being built and might be surprised to see units being sold despite the ongoing construction of said structure. Developers would call this as the pre-selling stage and in some cases, buying a unit this early would significantly lower the asking price. This presents a unique homebuyer dilemma wherein you are constrained to choose between an affordable condo unit that you cannot move into yet, or one that is ready for occupancy but is exorbitantly priced. With property developments continuously growing over the years, it begs the question: Which one would be more financially sound and feasible?
Difference between pre-selling unit and Ready for occupancy (RFO unit)
Choosing and purchasing a condo can be made even more difficult and intimidating by the slew of jargon you are inevitably going encounter when developers and sellers pitch a unit to you. To make the task less of a daunting endeavor, it is best to make yourself more familiar with both pre-selling or RFO units. Simply put, pre-selling units are those units that are sold even before they can be transferred to the buyer.
Pre-selling scenarios would include buying it before construction, completion or the planning stage of the building. Simply put, you are buying a non-existent unit at the time and would have to wait for its completion before its eventual turnover. On the other hand, RFO units are exactly what they are: Condo units ready for occupancy and turnover after you have commenced your paperwork and payment scheme for the unit. In most cases, RFO units are the remnants after certain condominiums are done with its pre-selling stage.
Weighing your options
ADVANTAGES OF PRE-SELLING UNITS
Typically, pre-selling units have a low introductory price which is usually around thirty to fifty percent regular price of the unit. For this reason, many prospective buyers would opt to buy their units at this stage. Consequently, down payment is significantly lower than it would be in its occupancy stage.
More often than not, the minimum down payment for a condominium unit as well as other types of properties is at twenty percent of the total price. To attract and entice buyers to make a purchase, the initial down payment can be as low as ten percent of the total sale. Lastly, buyers who choose to buy at the pre-selling stage have the freedom to choose their amenities.
ADVANTAGES OF RFO UNITS
While pre-selling units may be significantly cheaper than RFO ones, the former cannot be inspected thoroughly. As opposed to pre-selling units, RFO units are ready for immediate inspection and considering that this is a significant investment, many people would opt to check the unit before they proceed to the next stage.
Apart from that, there is no risk of overpromising as you get what you see in the actual unit—no cheap tricks, frills or anything similar. Lastly, you are free to move in once you have made all the necessary arrangements made. So, if you are looking to move in right away, this might be the best tack for you.