A preselling condo in the Philippines refers to a condominium unit that is offered for sale by a property developer before it is completed and ready for occupancy. This means that the condo project is still in the preconstruction phase or under construction, and the developer is selling units to buyers before the building is finished.
Here are some key points to understand about preselling condos in the Philippines:
- Off-Plan Sales: Buyers purchase the condo units based on the plans, designs, and specifications provided by the developer. They buy “off-plan,” which means they are buying a property that exists on paper and is yet to be built.
- Advantages for Buyers:
- Lower Prices: Preselling condos often come with lower prices compared to fully completed and ready-to-move-in units. Developers usually offer discounts and promotional prices to attract early buyers.
- Payment Flexibility: Buyers are usually offered flexible payment terms, allowing them to pay the purchase price in installment payments over the construction period.
- Potential Appreciation: If the real estate market is experiencing growth, the value of the preselling condo may appreciate by the time it is completed, offering buyers a chance for potential capital gains.
- Risks and Considerations:
- Construction Delays: There’s a risk of construction delays, which might postpone the completion and occupancy date of the condo unit.
- Changes in Plans: Sometimes, there might be changes in the final design, layout, or features of the condo, which could differ from what was initially presented to buyers.
- Market Volatility: Economic and market fluctuations can affect the property’s value, and the anticipated appreciation may not materialize.
- Legal Protections: The Philippine government, through the Housing and Land Use Regulatory Board (HLURB – DHSUD), provides regulations and guidelines to protect buyers of preselling properties. Developers are required to adhere to these regulations to ensure transparency and fairness in preselling transactions.
- Reservation and Contract: Buyers typically start by reserving a unit by paying a reservation fee. Subsequently, a formal contract, such as a Contract to Sell, is signed between the buyer and the developer, outlining the terms and conditions of the sale, payment schedule, and other pertinent details.
It’s crucial for buyers to conduct due diligence, research the developer’s reputation, and review all the terms and conditions before entering into a preselling condo purchase agreement. Consulting with legal and real estate professionals can also provide valuable guidance during the process.