What OFWs Must Know Before Buying a Condominium

OFW buying condominium guide

If you are an OFW who has spent several years working in a foreign country away from your home, you want to invest your hard-earned money in something that both you and your family can enjoy. You certainly deserve to have a place to call home or a source of passive income.

However, some OFWs find it difficult to buy a home in the country due to the numerous regulations, considerations, and legal issues that must be addressed. Buying a home, whether it’s a condo or a house and lot for sale, is a lengthy and difficult procedure, especially when you’re working abroad.

When buying a home, there are many factors to consider, from choosing a location to finding the ideal property and qualifying for financing. Buying a home has never been more difficult, especially with recent travel restrictions and health regulations.

It will be much easier for you to invest and own a property if you prepare all you need and know all the processes to take.

If you’re an OFW looking to invest in a property such as a condominium, here’s a checklist of what you should do first.

It’s all About Research

Make sure to conduct thorough research on the condo homes you are considering purchasing. You must also ensure that the property itself is worth investing in, in addition to the reputation and track record of the real estate developers.

Examine the situation. Examine the surrounding area, specifically the type of community in which the condo property is located. Consider the amenities and services available in the area. Are there modern amenities as well as lifestyle and business establishments nearby? How close is the condo to the nearest school or hospital?

In real estate, location, location, location is crucial. It has a significant impact on the price of a home over time.

Aside from getting the condo property details from the developer and broker, find out what the unit owners and buyers in the area have to say about the development.

Examine Your Financial Situation

After you’ve decided on a condo to buy, the following step is to prepare the reservation fee, pay the down payment, and calculate the monthly amortization. At this point, you must make an honest appraisal of yourself. Consider whether you can afford to invest in the property in question, as not all OFW positions are permanent.

You should also be able to build up a backup finance plan in case you suddenly find yourself unable to satisfy your financial responsibilities.

Know What You can Do if You Can’t Make a Payment on Time

While it is best to pay your amortizations on time, there may be occasions when you simply cannot, particularly in an emergency. This can occur if you lose your work or if you have a family emergency that depletes your savings.

You should be able to figure out what you can do in these situations because late payments frequently result in additional fees.

Check to see if there are any payment grace periods or if you can restructure your payments to avoid foreclosure.

A Step-by-Step Guide to Purchasing a Condo

OFW family with a purchased property
OFW family with a purchased property | Photo from Nathan Dumlao in Unsplash

Step One: Consult a Reputable Real Estate Developer.

As an OFW, you may not have the time to look for condo properties on your own. But you can avoid condo issues if you purchase from a reputable real estate developer. Make sure to check if the developer can deliver what they promise, if the properties are of high quality, and are built on time.

Step Two: Appoint a Reliable Attorney-in-Fact

Some OFWs return home to personally take care of purchasing their property. But in case you’re unable to do so, you will need to appoint a legal representative or an attorney-in-fact.

Usually, your property consultant will provide you with a Special Power of Attorney or SPA document, which you will have to sign and have notarized to grant your representative the power to sign legal documents for you.

Because of the trust required for this proxy role, many OFWs appoint their spouse, child, sibling, or any relative as their attorney-in-fact.

Step Three: Complete the Necessary Requirements

Once you have decided on the condo property to invest in, you will have to fill out some documents. OFWs have to provide multiple copies of the said requirements to buy the property.

Step Four: Have English Translations of Your Documents of Proof Signed by Your Employer or HR

In case English is not the official language of the country you are in, you will need to provide English-translated copies of your documents of proof like employment contracts in the process of purchasing your condo property.

Step Five: Apply for a Loan

Your attorney-in-fact can apply for a loan through the bank or PAG-IBIG. Meanwhile, if your payment is all set and you don’t need a loan, you can send your payment through remittance.

Step Six: Open a Checking Account Under Your Local Savings Account

Expect that you’ll be paying for your condo property through post-dated checks. Instead of opening a new bank account, you can simply open a checking account under your existing bank details.

Transaction Costs of Buying a Property in the Philippines

OFW working to invest a condo
OFW working to invest a condo | Photo from Courtney Cook in Unsplash

Keep in mind that any property investment is going to cost you aside from the property value. Other fees are being charged by the condo developer, on top of the monthly payments for the property.

Notary Fee is what you pay to get important documents notarized. It is usually 1 to 2 percent of the property value and is negotiable between the buyer and seller.

Local Transfer Tax is a government-imposed tax on the transfer of property ownership from the seller to the buyer. A buyer is expected to pay 0.50 percent of the property value for those located in the province while 0.75 percent for those in Manila.

Documentary Stamps Tax (DST) is an excise tax that is set for all the legal requirements like documents and papers that serve as evidence for the transaction. It is usually 1.5 percent of either the fair market value or selling price, whichever is higher.

Capital Gains Tax is the tax paid for gains in the capital invested. It is usually 6 percent of whichever is higher from the selling price, zonal value, and fair market value.

Monthly Expenses for a Property

Real Property Tax or real estate tax as other people call it, is something that every property owner has to pay. It is a tax that the local government collects based on the value of your property.

This is used to fund necessities such as water and sewer maintenance or improvements, fire and law enforcement services, and other general services that concern your property.

Maintenance Fees are monthly dues needed for the property upkeep. These fees can vary based on the conditions and amenities that your property has to offer.

Always remember that when you’re buying a property in the country, you must always be involved in the process. It would also be best for you to keep all conversations documented via email for your safety and peace of mind.

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