“From which developer should I acquire my very first house or condominium unit?”
For first-home buyers, this is one of the most often asked questions.
While there are only a handful of large developers, there are plenty of small to mid-size firms. Most of them are government-accredited and allowed to sell. Nonetheless, there are also many companies that are illegally operating within the real estate industry. As a consequence, the task of choosing the right developer is very important, albeit difficult, if not daunting.
To facilitate your research, here are some things to consider:
• Company background. Developers have varied expertise and experiences. Many reputable firms were established decades ago and continue to operate today despite having encountered several economic downturns. On the other hand, many more developers were organized only when the industry started to boom in the last decade. As a result, some inexperienced developers did not fare well and gave their buyers numerous problems such as below-standard or uncompleted projects.
Many large developers are publicly-listed companies. These companies are required by the government to submit quarterly performance reports so the public will be apprised accordingly. Because of this, information such as their founders’ story, officers’ background and years of experiences, company financial statements, overall project commitments and latest results are easily available for scrutiny by the public.
• Reputation and customer feedback. To better appreciate the capacities of these developers, numerous published and online reports are available and may be accessed easily. They include rankings according to their gross and net sales revenues, market segment reach, total units pre-sold, sold and or delivered, number of projects launched and completed, among others. With the availability of social media, customer feedback on sales experiences, timeliness of project deliveries, and post-turnover feedback can be searched online as part of your developers’ evaluation.
• Project designs and quality. Many first-time buyers have difficulty understanding or visualizing house or condominium unit layouts. As such, it will be of great help if these potential buyers can personally visit the developers’ showroom to better understand the design, size, materials and features of the house or unit the buyers have in mind. A personal appreciation of the project deliverables, its workmanship and quality of finishes can also be ascertained during the site visit and tour of the project.
• Price and payment schemes. The selling price of developers varies according to their reputation, target markets and niche, location, amenities, unit specifications, etc. Consequently, a good understanding of these considerations is necessary to know if the price differences are worth paying extra for.
Buying a house or condo unit should not be a burden. Thus, buyers should recognize their financial capacities and assess which of the proposed payment schemes are compatible with the buyers’ affordability level and resources.
• Legal documentation. There are numerous sales-related contract documents that need to be filled up and complied with by prospective buyers. They include the Reservation Agreement, Contract to Sell, Deed of Absolute Sale, Project Deed of Restrictions, etc. In these documents are found the rights and obligations of both parties, as well as project details like the unit number, size, project and unit specifications, allowed use, turnover date, total project cost, payment terms and developer warranties. These provisions will govern the transactional relationship between the buyers and their developers.
• Post-sales closing services. The signing of the sales contracts is but only the start of a relationship between prospective buyers and developers. Over the next few years, the parties will interact with each other with regards collections and payments, buyers’ queries and developer’s replies or clarifications, and many more. Customer-centric care, continued communications and updates, timely responses or feedback whether personally, through their agents or an online facility will establish how their relationship will progress over time.
• Bank accreditation. As first-time buyers, many do not have enough savings to fully pay the large balance. All major developers however have pre-arranged with many banks to have their projects accredited for buyers and end-users financing. It means that buyers can apply for bank loans so that the developers can be fully paid by the bank and possession of the house or unit can transfer to these buyers. In consideration for the mortgage of the house or to the bank, the buyers can easily avail of long-term but manageable monthly installments with the bank at an agreed interest rate and payment term.
Good luck and happy hunting everyone!
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Henry L. Yap is an Architect, Environmental Planner, Real Estate Practitioner and former Professorial Lecturer.