According to Maslow’s Hierarchy of Needs, shelter is one of the most basic biological and physical needs of humans that need to be satisfied in the bottom most part of the hierarchy before individuals can attend to needs higher up.
A safe shelter is not even a want but a basic need.
This is where realtors or real estate agents like me enter. We can be an instrument in helping you achieve this need or your dream home or better living conditions. Being a real estate professional in Canada and Philippines, I regularly come across a multitude of doers and dreamers wanting their dream home realized. When you are emotionally, psychologically and financially ready to buy or lease your first home, you are most likely to get in touch with a broker to show you some properties. Buying or leasing your next home is one of the most important decisions you will make in your lifetime, and probably the most expensive investment one — you put your life savings for a downpayment or pay the customary two months’ advance, two months’ deposit standard rental requirements.
Here are questions you need to ask your broker:
• What is my total cost of purchase? In my years of practicing real estate, I have seen many buyers who only have the equivalent of the listed price of the property as their budget. This should not be the case. When you are buying a P10-million property, for example, you have to set aside the customary buyer’s fees which include documentary stamps tax that’s equivalent to 1.5 percent of the selling price or the Bureau of Internal Revenue’s zonal value, the assessed value by the provincial/city assessor — whichever is higher among the three.
There is the transfer tax with a rate that depends on location of property (ranging from 0.5 percent to 0.75 percent of selling price, fair market value, zonal value, whichever is higher). Registration fee, which is 0.25 percent of the selling price, or zonal value or fair market value, whichever is higher.
There are also incidental and miscellaneous expenses incurred during the registration process and notarial services. There is the yearly property tax for owning the real estate. If you live in a subdivision, there is the homeowners’ association dues to pay for. If you choose to live in a condominium, there are monthly building and management dues, and if the building needs repairs, they might ask for a special levy from homeowners to pay for external building among others.
• How much are utilities in the area? Ask how much they pay for utilities. The amount might seem small compared to the bigger price you are paying to own the property but utilities are a recurring monthly expense. You should factor in all the homeowners’ cost to determine if you can afford your own home or if renting makes more sense.
• Do you know anyone who can provide financing? Your realtor should have a competent team of professionals to make a sale happen. I have connections to banks, private lenders, lawyers who can help buying a house simpler. Before I take on buyers on tours, I first ask them how they intend to purchase the property. If they have no definite source of financing, it is a waste of both our time to go see different houses especially with the horrendous Manila traffic.
“Tripping” without having our finances taken cared of first is like window shopping — you might see a thing that you like but if your finances are not in order, you will not be able to purchase it. It’s like bringing your credit card to the mall knowing you cannot swipe it because you have no money to pay for it when the bill arrives.
• What are the up-and-coming neighborhoods that I can get more bang for my buck? It’s beneficial for you to work with someone who is well versed in the different neighborhoods and in the overall market conditions. Therefore, feel free to ask your realtor new areas that he/she can suggest for you. With the high prices in Bonifacio Global City, Makati and the Mall of Asia area, people are looking more to the north where a new line for the MRT is being proposed.
Ask your realtor for areas that can give you bigger space with the limited budget you have. I had clients before whom I suggested to invest in Mckinley Hill as I knew the proximity to BGC will be a good advantage since international schools were coming up in BGC, and that Mckinley Hill had smaller cuts while Forbes Park or Dasmarinas Village had bigger cuts and higher prices at that time. I think current prices prove my forecast right.
• Can you provide me with comparable sales regarding this property? Ask your realtor to give you market analysis of the building and the area you are looking at. Beware though that it is not as transparent in the Philippines but the BIR has a list of new zonal values that affect every property in the country. In Canada, there is a multiple listing system where all sales history and price comparable are listed.
• Can you give me this listing’s pricing history? Some listings will incur price reductions throughout its listing history. In some cases, the first listed price is way above market average. Sometimes when the property is under the redemption stage in the foreclosure, the price can go down depending on whether the seller is very desperate or not. It’s the buyer’s prerogative to pursue or wait.
• Why are the owners selling? In Canada where I also practice, it is frowned upon to ask this question since a realtor — both the seller’s realtor and the buyer’s agent — owes our client fiduciary duties which include not sharing to the buyer’s broker or buyers the reason behind the sale. In the Philippines though, this question is always being asked and it seems like we always get away with it. I have gotten answers like the couple is splitting up therefore the property has to be sold, or the patriarch is sick and family needs the money to pay for medical bills. This leaves me and the buyer in a better position to negotiate on the listing price.
• Exactly what is included in the sale? Will the property come furnished? Some sellers will take that expensive Murano chandelier hanging or all those expensive leather couches, while others will leave them especially if the sellers are downsizing to a smaller place. Make sure you see all of what you are getting.
• What is the minimum price the seller will accept? Some will feel awkward to ask this but knowing if the seller’s bottom line is actually negotiable can save you thousands.
• Who has been your most challenging client,and how did you handle it? This gives you an idea of how your realtor deals with the many inevitable challenges that will come up during the buying process.
• If you yourself were looking to buy a place, where would you move and why? I always ask this question to colleagues I am working with. The answers can be enlightening and will give you better insight into places where you should be looking since real estate brokers have everyday exposure to the market. Realtors are also required to attend continuing professional development programs to equip us with new laws, new market conditions, and exposure to new developments being presented to the brokers.
• Does the house have any stigma attached to it? Part of our job is to disclose to you when there is talk of a certain stigma to the house. We see some properties not being bought because of ghost stories or houses where “meron namatayan.” Some people do not care but if you are one of those who believe in feng shui, there is no harm in asking your realtor about the history of the house. There was this house in Pasig that does not sell because of a killing that happened in the house. Just do not ask your realtor regarding each and every house for possible ghosts or killings — the only thing that can be killed by doing that is the camaraderie with your realtor when done excessively.
• Can you help me narrow down choices? Time is money and I know that my clients do not have a lot of time to go viewing since they have careers and family to juggle. If clients cannot make it to viewings and I have a particular strong feeling about a good property that matches the criteria of the client, I would go and take lots of photos and videos even before they see it in person.
And most often than not, photos posted will be beautiful but it is a different matter when you see the property with your own two eyes — wallpaper can be peeling, leak signs on the ceiling, and so on. I give my honest opinion on the property that I highly suggest they see it for themselves and make an offer, or we move on to the next one. Do not be afraid to ask for assistance from your real estate broker to help you narrow down your choices and zoom in on the top properties you should be looking at and pursuing.