Articles Property Buyer Guide Pros and Cons of Buying or Pre-selling/ Newly Built Properties

Pros and Cons of Buying or Pre-selling/ Newly Built Properties

Property buying or selling is always a tricky market to navigate. In this article, we discuss a specific type of property you can purchase.

There are several benefits to owning a home. If the notion of owning a house is intriguing to you, it's critical to grasp what you'll gain (and lose) once the property title is in your possession. To assist you in making your decision, we've developed a detailed list of advantages and disadvantages of purchasing a home.

Pre-selling homes are becoming increasingly popular in the Philippines, and it's no surprise that their below-market value attracts a large number of investors. Pre-selling units are those that are sold on the market before they are made available to the general public. This might indicate that the property does not yet exist or is still being built. Either a showroom with model apartments or brochures with floor plans are provided to you. Pre-selling is also known as off-the-plan properties in real estate. Pre-selling is common for condominiums and homes. This appears to be as good as purchasing a concept, but there are dangers as well as rewards. Before diving in, consider the following advantages and disadvantages of investing in pre-sale properties:

Woman handing money to another woman holding a clipboard with a building layout and keys.


a. Priced Below Market

The lack of a physical unit accounts for the low starting price. When compared to the price of a completed unit, developers cut the real price by 30 to 50%. When a buyer signs a contract and pays in-house, they may offer savings on down payments as low as 0%, or go even farther by removing reservation fees. Aside from discounts, they also provide various payment options such as in-house financing if the customer is unable to obtain a bank loan. They give incentives to ensure that their property has a high occupancy rate by the turnover date, despite charging premium fees for pre-selling apartments. The developers gain more money if there is less vacancy.

b. Make Your Own Selections

Pre-selling homes allow purchasers to pick the finest unit option for their taste, but ready-for-occupancy (RFO) buildings do not normally give buyers a choice of apartments because the other units are no longer unoccupied. They may choose the size, location, level, outdoor view, distance to facilities, and decreased foot traffic from the beginning of construction. Additionally, pre-selling allows purchasers to tailor the floor plans and unit layout to their tastes. Buyers who are active in the construction process can evaluate the progress and request alterations ahead of time.

Man and woman shaking a realtor woman's hand inside a bare looking room.

c. Consistent Cash Flow

Buyers who prefer to invest in pre-sold homes as a rental option might select apartments that are most suited for prospective renters. They generate a continuous stream of income via monthly rent. Buyers can sell pre-selling properties for a greater price since they are sold below market value. This is especially true when the property has risen in value over time.

d. Ideal Investment

Real estate is an excellent investment, and purchasing a home before it sells allows you to make a profit. We spoke about how much cheaper it is to buy pre-sell because the price goes up after the project is finished. Real estate will increase in value over time if it is paired with market value. You may be able to earn more than you paid for. Investing in a pre-sell property, whether for rental or for sale on the secondary market, is a sure guarantee for future profit.

Woman with gloves and puffy coat standing beside a house for sale sign while writing something on her clipboard.


a. Unexpected Changes

In the worst-case situation, the developer is unable to complete the project owing to a lack of resources, and you will not be entitled to a refund. Buyers are better off selecting a respected developer that can meet their deadlines with minimal to no delays in handover. Meanwhile, other projects are mishandled, resulting in sluggish development and unwelcome delays that might take years to fix. Because purchasers often sign a contract, adjustments such as unit sizes and floor layouts that differ from expectations are made without notification. For a buyer paying for the property, this may appear to be a waste of money. Because they can't track their unit's growth, investors who live overseas are at a significantly higher risk.

b. Activity That Could Be Illegal

Pre-selling property developers are required to obtain a license from the Housing and Land Use Regulatory Board (HLURB), a national government agency that regulates the real estate industry in the Philippines, under Presidential Decree 957, also known as the "Subdivision and Condominium Buyer's Protective Decree." Before pre-selling any property, developers, owners, and dealers must obtain a license from the Housing and Land Use Regulatory Board (HLURB), a national government agency that regulates the This is to verify that they adhere to regulatory regulations and avoid pre-sale fraud. Before being delivered to a buyer for signature, all papers issued by a developer or seller must be notarized by a lawyer.

c. Real estate service that is corrupted

More than 85 examples of pre-selling frauds were reported to HLURB in 2009, prompting them to adopt harsher regulations on pre-selling properties. It's awful to think that swindling is normal in this country, and that potentially dishonest real estate salespeople are equally popular. There are persons who pose as agents and brokers, receive deposits and money from purchasers, and then vanish without a trace. This is especially dangerous when OFWs purchase goods from overseas without the assistance of a representation. The trick is to do thorough research and not be scared to request credentials. Never pay for something you aren't convinced about.

Woman holding a sale pending and sold sign by a house.

What the public should do if they want to acquire a pre-sale property

While purchasing a pre-sale property is appealing, it is also a hazardous enterprise that should only be undertaken by people who have done their homework. Here are a few pointers to consider:

1. Learn more about the project's creator. If you're unfamiliar with it, look into information about it online, such as previous projects, suspected participation in frauds, and how it's depicted on social media. Most importantly, inquire about this developer's standing with the Housing and Land Use Regulatory Board.

2. Only deal with licensed agents; don't deal with persons who aren't allowed to serve as agents, even if you know them personally, such as friends or family members.

3. Consult an experienced real estate lawyer once you've received a contract on a pre-selling property offer to assist you interpret the legal language and ensure it's not onerous and detrimental on your side.

To prevent being taken advantage of or rushing into something you don't completely understand, seek legal guidance from a lawyer before signing anything. To handle all of the costs associated with acquiring a home, save money or examine your payment choices. Allow a reputable and qualified real estate broker to take you through the whole process of purchasing a home before it goes on the market.