First, what does “pre-selling” even mean? In real estate, pre-selling is the act of selling properties before its completion. The project may be in the construction phase, or still in the planning stages.
What are the advantages of buying pre-selling condos?
Many buyers consider pre-selling condos because of lower introductory prices, which can be 30% cheaper than an RFO (ready for occupancy) unit. Also, developers offer flexible and stretched payment schemes either thru bank or in-house financing. There is also a potential for market value to increase over time, which attracts investors who are in the business of buying and selling properties.
Some real estate agents, however, misuse the term “pre-selling” to pertain to selling properties prior to the issuance of the necessary licenses. There are also instances when there are misrepresentations – the condo unit, upon turn over, is not at par with the one presented before by the agent.
In this light, here is a list of things to check before investing in a pre-selling condo from a developer:
- License to sell
The License to Sell (LS) is a document issued by the HLURB, the government body that authorizes a developer to sell condo units to the public. These documents are only granted upon submission of requirements like a performance bond to prove that the developer is financially capable of completing the project, and a building permit to guarantee its firm commitment to proceed with the project.
The LS number, date of issuance and completion date should be indicated in the project’s marketing materials.
- Project Deliverables
Buyer’s often see disclaimers on marketing materials stating that the project is subject to change without prior notice from the developer. This gray area has led to abusive sales agents overcommitting and misrepresenting just to force a sale. It’s a good thing that the HLURB has released the revised Implementing Rules and Regulations for advertisements to protect buyers from fraud and other malpractices in the real estate industry. This board resolution states that all representations in an advertisement shall form part of sales warranties and any failure to timely and completely fulfill these representations is considered as a breach of contract.
So when buying a pre-selling condo, keep a copy of the brochure or saleskit which indicates the committed features and amenities. Also, be aware that most model units have upgraded furnishings. Ask for a unit specification sheet or fact sheet that specifies the actual turnover finish.
- Track Record of Developer
Unlike horizontal developments where construction is done per cluster, high-rise developments require full-swing activities once construction has commenced. There are reported instances of notorious developers who are not only delayed in construction, but who also can’t commit on the delivery date of their project.
There are also cases when these developers remove features and amenities without informing buyers to save on cost.
Hence, it is critical to buy condos only from developers with a proven track record. Such a developer is Rockwell Primaries, a subsidiary of Rockwell Land Corporation who has nearly two decades of experience in creating world-class communities.
Rockwell Primaries recently launched the Vantage at Kapitolyo, a high-rise mixed use development in Pasig City. They are also set to turn-over a mid-rise project in New Manila called 53 Benitez this 2016.