Where do you plan to use your hard-earned money from working overseas? Surely, you would want to have sufficient savings for the rainy days, set aside money for your kids’ tuition fee, pay off existing debts, and buy a place you could call your home.
Yes, your home.
Apparently, buying a house, regardless of its type, requires money – big amount of money. Because of this, you might hear some people say you consider buying foreclosed property since it is cheaper and easier on the wallet.
Don’t get too excited. Here are several things you need to remember before you say to a foreclosed property:
Tip No. 1: Location, location, location.
This is one, if not the most important consideration when buying a property in general. Ideally, your future home must be near establishments like school, hospital, malls, or grocery stores. You also need to check whether or not the property is located in the fault line or in flood-prone area.
Don’t forget to check the surroundings because you surely don’t want to live near slaughterhouses, squatters, or garbage dump. Ask about the crime rate incidence because safety of your family is something you need to consider as well.
Tip No. 2: Check the current condition of the property.
You are looking for a place that you could potentially call your home. This is why it is imperative that you inspect the house before you pay. After all, foreclosed properties are often sold in “as is, where is” basis, which means expect that the house is not in tiptop condition.
Wear and tear is normal, especially when the house has been existing for years. If you see that the property needs extensive repairs because you saw cracks on the walls, termite infestation, or rotting wood among many others, then you might want to reconsider your choice. In fact, questionable structural integrity could be a red flag.
Paint job or changing the door knobs is fine, but if you need to shell a big amount for the repairs due to structural flaw, then the property may not be worth it.
Tip No. 3: Know the costs involved.
Buying a foreclosed property doesn’t end with paying the selling price. In fact, there are many other costs you need to pay for such as:
- Capital Gains Tax, although this is usually shouldered by the seller
- Documentary Stamp Tax
- Transfer Tax
- Real Property Tax
- Association dues if the property is a condominium or a part of homeowner’s association
- Repairs to be done on the property
In other words, you need to factor in these costs plus any other additional costs to check whether or not you are getting a good deal. This should be considered because you might be surprised to find out that buying a brand-new property is cheaper.
Tip No. 4: Establish your budget.
How much are you willing to pay for your dream home?
The price of your choice of property is dependent on its location. This means if you are eyeing for a house in Quezon City, then you need to prepare a big amount. If you are willing to spend up to P3 million only, then you need to look outside Quezon City where properties are more affordable.
What if you don’t have enough cash on hand? Then you might consider financing. Banks and private lenders offer financing options to help you buy your home at affordable interest rate.
Take note that even though financing is available, you still need to cash out a certain percentage of the selling price. Having a cash on hand is also important especially when you buy foreclosed properties during auctions.
Tip No. 5: Work with banks or accredited broker.
Scammers or people with bad intentions often look for people who could easily fall into their trap. Oftentimes, they take advantage of OFWs because you are easier to convince.
Well, don’t be a victim. When it comes to buying foreclosed properties, it is best to work with banks or accredited real estate brokers. They will help you every step of the way and guide you to ensure that the sale is as smooth-sailing as possible.
You wouldn’t want to end up with a problematic property, do you?
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