Questions: Buying a townhouse..

[swordsman]

Finally tired of renting, so we're planning to buy a small two-storey, two-bedroom townhouse. We plan to put this thru in a housing loan thru a bank. If the loanable amount is sufficient and within our budget, we'll push thru with the loan(and hopefully be approved) and are expected to give an 'earnest money' while the loan is being processed.

A bit of complication is that we currently are dealing with a middleman since the owner already migrated abroad.

So how would this suppose to go down? Please advise of the step by step process that we should expect to go thru from filling-up of loan application, appraisal, loan approval, payment of capital gains, transfers of title, etc? Any hints, notes, do's and don'ts, timelines would be very helpful as well.

Specific questions i have in mind are:

- At what point should we give the earnest money? Is this refundable?

- Earnest money should be named to the owner, right? How is this done when owner is abroad?

- Since the owner is abroad, how would we proceed with the sale?

Thanks in advance!

[1D4LV]

Finally tired of renting, so we're planning to buy a small two-storey, two-bedroom townhouse. We plan to put this thru in a housing loan thru a bank. If the loanable amount is sufficient and within our budget, we'll push thru with the loan(and hopefully be approved) and are expected to give an 'earnest money' while the loan is being processed.

A bit of complication is that we currently are dealing with a middleman since the owner already migrated abroad.

So how would this suppose to go down? Please advise of the step by step process that we should expect to go thru from filling-up of loan application, appraisal, loan approval, payment of capital gains, transfers of title, etc? Any hints, notes, do's and don'ts, timelines would be very helpful as well.

Specific questions i have in mind are:

- At what point should we give the earnest money? Is this refundable?

- Earnest money should be named to the owner, right? How is this done when owner is abroad?

- Since the owner is abroad, how would we proceed with the sale?

Thanks in advance!

earnest money = reservation. it can be deducted from the balance or the initial payment depending on your agreement with the broker/seller.

yes. the earnest money is named to the owner. because the owner is abroad, he should have a representative here with SPA to whom you can talk with. the same (SPA) should apply with the sale.

[Chip]

Ernest money is usually non refundable. If you back out of the sale, you lose it. if you continue with the purchase, its deducted from the total price.

Like what happy gilmore said, be sure that the person you are dealing with has SPA- special power of attorney, otherwise your deal can fall through and you may end up losing.

Hopefully other tsikoteers can answer your queries in more depth. Goodluck with the purchase

paging vanwilder

a little off topic: totoo bang condominium units usually revert back to the developer after XX number of years? I read here before na thats how ayala operates. If so, how about townhouses?

[swordsman]

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Like what happy gilmore said, be sure that the person you are dealing with has SPA- special power of attorney, otherwise your deal can fall through and you may end up losing.

Thanks guys! Is the SPA something that me and the bank should be provided with by the representative of the seller/owner?

Isn't the SPA one of the checklist of the bank when the loan is applied for a property wherein the owner is not around?

[boybi]

First, get a photocopy of the Title of the land and the tax declaration of the town house and have it checked with the Registry of Deeds to make sure that it is in the name of the supposed owner and it is not mortgaged or being contested upon.

Second, ask for an SPA from the middleman.

[swordsman]

yup, were currently requesting copy of the title. sama na rin namin tax declaration.

SPA, we have yet to ask...pero will take note.

[swordsman]

First, get a photocopy of the Title of the land and the tax declaration of the town house and have it checked with the Registry of Deeds to make sure that it is in the name of the supposed owner and it is not mortgaged or being contested upon.

so those info about disputes or court cases on the property(if ever there is one) can also be obtained from the Registry of Deeds?

[leolop]

so those info about disputes or court cases on the property(if ever there is one) can also be obtained from the Registry of Deeds?

when you do get a copy of the title, you should go to the registry of deeds where it is registered and verify the title. they will give you a certified trued copy then you will see if there are notices (legally called annotations) that are inscribed on the title. possible annotations could be a mortgage, adverse claim, notice of pending litigation (lis pendens), etc. a clean title will have no annotations except possibly the deed of restrictions placed by the original developer.

you should take caution because you are dealing with someone who is not the owner. it's easy to make an SPA. if possible, ask for some more identification documents from the owner himself such as passport and other IDs and try to get to talk to him/her personally. just be more diligent, and don't presume anything. the flip side to this is that it may be fraud and you're dealing with someone who was only entrusted with the copy of the title.

if you are purchasing on installment basis from the seller, then the maceda law (ra 6552). but if you are paying for it with a loan from a bank then that will not apply and you will be covered by general banking act.

on other points, condominiums are set up as corporations and each unit owner owns an aggregate share of the corporation. all corporations have a life span of 50 years, but may be extended. automatic reversion to the developer sounds contrary to public policy.

capital gains tax is based on either the zonal valuation, tax declaration or selling price, whichever is highest. it is 6% of gross because it presumes a capital gain. the flip side to this is if it were based on actual gain, the gain would be taxed 32-35% as income tax. just imagine if you held property for a decade and the price had tripled then that 6% may not be so bad sounding after all.

it's true that cap gains tax is supposed to be on the part of the seller, but most sellers try to pass this onto the buyer. if buyer agrees then no problem.

[tsupermario]

a little off topic: totoo bang condominium units usually revert back to the developer after XX number of years? I read here before na thats how ayala operates. If so, how about townhouses?

RA 6552 - covers condos and townhouses.
HTH

[Chip]

RA 6552 - covers condos and townhouses.
HTH

thanks for the link, if i understand what i read correctly, it deals more with late payments and assigning someone else to continue the payments. i cant find any mention of property reverting back to developer. or is that what you mean na illegal yan?

[tsupermario]

sir under the act, if the contract (of sale) is canceled the property is reverted back to the seller.

[Lemon]

a little off topic: totoo bang condominium units usually revert back to the developer after XX number of years? I read here before na thats how ayala operates. If so, how about townhouses?

I have know idea, that condos after 50 years will revert back to the developer until an agent from DMCI mentioned this. Hindi binabanggit ng mga agent kung Perpetual Ownership ang mga condos kung hindi mo tatanungin. Before buying one, check mo muna and dapat Perpetual Ownership yun condo. Thats why I ended up getting my unit with DMCI.

[creepy]

I have know idea, that condos after 50 years will revert back to the developer until an agent from DMCI mentioned this. Hindi binabanggit ng mga agent kung Perpetual Ownership ang mga condos kung hindi mo tatanungin. Before buying one, check mo muna and dapat Perpetual Ownership yun condo. Thats why I ended up getting my unit with DMCI.

It depends on whether the land on which the condo sits is leasehold or freehold. Most condos in the Phils are freehold.

[Macky]

- At what point should we give the earnest money? Is this refundable?

Standard earnest money is good for 45 days reservation unless specified otherwise on your contract. It is non-refundable but can be deducted once the sale pushes through. The only provision of refund is if the seller is at fault for the sale not pushing through.

- Earnest money should be named to the owner, right? How is this done when owner is abroad?

Check can still be deposited if the owner still has a local bank account.

- Since the owner is abroad, how would we proceed with the sale?

The same thing happened to us when we were selling our property in Arkansas but already moved to St. Louis. A local Arkansas realtor took care of everything as we signed a contract authorizing him to sell our property (Contract to Sell). I think SPA is more appropriate in your case if you are dealing with a middle man instead of a realtor.

Finally tired of renting, so we're planning to buy a small two-storey, two-bedroom townhouse. We plan to put this thru in a housing loan thru a bank. If the loanable amount is sufficient and within our budget, we'll push thru with the loan(and hopefully be approved) and are expected to give an 'earnest money' while the loan is being processed.

We've outgrown our 2BR/1BA/1 car garage townhouse and we're currently selling for the same price we bought it 4 years ago. We've built some extensions (dirty kitchen and the 1 car garage) since 2003. The subdivision is gated with 24hrs. security and is located in Las Pinas City.

We are also selling our 2BR/1BA 63sq.m condo unit * 901 Tower B Regalla Towers EDSA corner P. Tuazon St. Cubao, Q.C.

Please send me an email * mdx981*yahoo.com if you are interested.

[MAYLES]

Sir,
We had recently constructed a 6-unit 3-storey townhouse unit near camp crame area, kindly txt 092298211519 09209211519 for more details.

Thanks

[boyscout]

also remember that the buyer usually shoulders the capital gains tax which is quite huge. have it computed first so at least you will be ready.

[n2knee]

also remember that the buyer usually shoulders the capital gains tax which is quite huge. have it computed first so at least you will be ready.

REALLY??? WOW! iba pala dian. si pedro binayaran ang utang ni juan. ang daya naman. in my opinion, the seller should pay the capital gains tax (as it is in the USA), since the seller is the one who made the profit (let's not get into the capital gains exemption. that's another topic).

there are also exceptions in which you can get the full amount of your deposit. one of which is if your loan application fails to secure approval (assuming you put a loan contingency in your bid); or any of the contingencies you put in your contract/bid that the seller fails to satisfy.

[CVT]

REALLY??? WOW! iba pala dian. si pedro binayaran ang utang ni juan. ang daya naman. in my opinion, the seller should pay the capital gains tax (as it is in the USA), since the seller is the one who made the profit (let's not get into the capital gains exemption. that's another topic).

there are also exceptions in which you can get the full amount of your deposit. one of which is if your loan application fails to secure approval (assuming you put a loan contingency in your bid); or any of the contingencies you put in your contract/bid that the seller fails to satisfy.

Dito po sa Pilipinas, kalakalan, na ang seller ang nagbabayad ng 6% capital gains tax; at ang buyer ang nagbabayad ng 1% transfer tax. Based ito pareho sa selling price ng property.

Kung may ahente, ang seller din ang nagbabayad. Typical rate is 5% of the selling price.

Kung mayroon mang mababago sa arrangement na ito, nasa pag-uusap na nila ito. Pero, ito ang practice dito sa atin.

Kunin muna ang photocopy ng titulo at imbestigahan kung ito nga ay 'clean title' at mag-usap ng maayos tungkol sa pagbabayad ng mga taxes bago magbigay ng earnest money.

2301:dog1:

[swordsman]

no problem Chip...

about sa capital gains & transfer taxes, yes we already factored it out sa final selling price. the seller gave discount to compensate for those taxes.

Sir,
We had recently constructed a 6-unit 3-storey townhouse unit near camp crame area, kindly txt 092298211519 09209211519 for more details.
Thanks

do you do renovations, sir?