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Price, Location and Time:  A Basic Guide to First Time Real Estate Buyers

It  was a normal day when I got a call from a young professional. He is very eager to invest in a property. So as any Real Estate Broker,  I asked for some pre-qualifying questions.

First Scenario

 It turns out, the buyer wanted a Single Detached House and Lot near EDSA Quezon City so I was thinking maybe I can source out somewhere along Quezon Avenue, Mother Ignacia, New Manila or maybe even Cubao Area.  Then the house should be at-least 3 bedrooms and 2 bathrooms  and a car garage. As a Real Estate Broker with years of expertise, my mind is shouting  “PIECE OF CAKE”. Then we moved on to the financial aspect.  That is where he dropped the atomic bomb when he said that he can afford monthly payments of Php 8,000 per month.  He has not saved any for the downpayment and he wanted to move in asap.  If you can dissect my brain you will see that I’m having doubts about the sincerity of this buyer.  The questions that came into my mind are: Is he really serious about this? Am I just wasting my time? It turns out that the fellow really is a serious buyer. But if you take a look at the information that he provided, then the 3 factors would come into play.

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The location is fine considering that the buyer is opting to purchase in a prime city location. The time factor is ok because the buyer wanted to move-in as soon as possible and there are available properties that are ready for purchase or mortgage. The only factor that is way off is the price. Considering that the buyer’s budget is at Php 8000 per month, assuming that this is under mortgage we can see that mortgage that he can afford is roughly around Php 1,100,000. 

At first glance that seems like a good number, he can afford to pay mortgage for Php 1,100,000. Now here is the tricky part. The townhouse prices alone in the specified areas are roughly ranging from Php 7,000,000 and up. A single detached house however would fetch a good price of around Php 15,000,000 or more.  Now you can see the problem.
Second Scenario

I met this buyer online through an email inquiry. She’s working abroad and was able to save a hefty amount ready for downpayment. Her preference is more on the sub-urban areas up north. So the best choice would be around Bulacan area. As usual, most buyers preferred a Single Detached/Attached property which is something that I already have in mind. We went through the usual process of pre-qualification then on to the online presentation since she’s working in Dubai. Everything went well, the price quote was ok. The project and the location itself is perfect for her requirements. I only needed her commitment so we can move forward considering that there are only 3 units left. And there she was, having a cold feet and a thought of hesitation. After an hour of back and forth communication, she told me that she needs to think about it and she will just notify me once she is ready.

The budget is ready, the project is ready, the location is perfect and the availability is there.  I waited and waited and a good six months went by.  There she was, very eager to ask for the updated price, and she ready to commit and reserve the house. Alas! The whole 200 house/unit project is already sold out. I checked and re-checked so as to help her but to no avail, there were no open units left. She was stunned and I could almost hear her thinking “sayang” just by the tone of her voice. 

The money is ready and available, she liked the house, she liked the location and everything about the project. Time wise, there are 3 open units left at that time but she didn’t took the risk. So you can see from the scenario that you may have the money and may have found the perfect location and you may have already decided to commit but the question comes in to play. Are there any available units left? If it’s too good to be true, then it probably is and you’re not the only one who’s interested in the opportunity.

Third Scenario

So we go back to that very same project with just three available units left. It turns out that two of my close friends are looking for a property. The first one is married to an OFW. They initially wanted a property in Quezon City with a good budget in mind. We went on a tour to check out some properties within the city. With her budget, she can get a good townhouse, but she wanted something bigger. As a helpful broker as I am, I showed her the pros and cons of choosing a different location. I told her that for the same amount of money, I can get her a single attached, 3 bedroom house in the sub-urban area.

So there we have it, after weighing the options. She has the budget, there are still available units, she decided to go with a sub-urban location. It’s a done deal, and now it’s down to just 2 units. 

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A second friend, also working in Dubai is seeking a property. I showed her the same project with only 2 units left. The location is fine by her. The only challenge would be on the financial side. I advised her that this is the best deal that you can get considering that there are only 2 options left and her choice is the one with the bigger lot. It took her a bit of a courage to take the challenge and reserve the unit. It motivated her to push harder to be able to earn enough money for the monthly payments. And there we have it, it was down to 1 unit.

Now I guess everyone was asking, who bought the last unit. It was actually purchased by another buyer through a different agent, one day after the lady from the second scenario called. In just a matter of hours.  She lost that opportunity.

As a real estate buyer, we need to understand the factors of Money, Time and Location. These 3 factors need to be lined up in order for you to get a property that fits your requirements. You need to be able to choose which 2 are non-negotiable and which one is adjustable.  Knowing these factors will make it easier for you and your agent in finding the right property. Plus, you won’t get that certain odd look from your agent by having OUT OF THIS WORLD / UNREALISTIC requirements and expectations.

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The Author
Typhoon Butchoy is in his merry way out of the country and I sipped a total of 3 coffee cups and ate 2 slices of cake, 3 hotdogs, 2 fried eggs and a bowlful of Chicken Tinola as I was writing this article.

Email me at: Broker@JoelDennisMuyco.com

 


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