Closing the Sale

Ready to close in on the sale? Here are key guidelines when buying property in the Philippines.

1. Initial Agreement and Deposit

A formal agreement between you and the property’s seller is crucial. Ensure you keep written records of all verbal agreements, counter-offers, and addendums. These should be converted into signed written agreements.

2. Stick to the Closing Timeline

After agreeing on the offer, you will receive a timeline for each stage of the closing process. Meeting deadlines ensures smooth negotiations. Your agent will keep you updated to ensure you are prepared for each step.

3. Assign a Closing Agent

A title company or attorney will act as the closing agent. They will hold the deposit in escrow and research the recorded history of the property to ensure the title is clear of encumbrances. Additionally, the closing agent may suggest to consult an attorney or tax advisor on the best method to hold title, as it has different legal, estate, and tax implications.

4. Conduct Property Inspections If Needed

Once the offer is accepted, have a licensed property inspector examine the property. Additional inspectors can be hired for specific areas like roof, HVAC, or structure. For commercial properties, an environmental audit may be required. Depending on the findings, you may proceed to closing or re-negotiate the contract terms.

5. Appraisal and Financing

Keep in close contact with your lender, who will notify you of any additional documents needed. The property will be appraised by a licensed appraiser to confirm its value for the lending institution. Ensure your loan will be processed smoothly by double-checking with your lender.

6. Association Approval

If association approval is required, obtain the rules and regulations from the seller immediately after agreement. Submit application documents and fees on time. Schedule interviews for approval if necessary. The closing agent will require the approval letter for recording with the deed.

7. Get Property Insurance

If obtaining a loan, you must purchase insurance on the property as per your lender’s requirements. Shop around for insurance to save money, and consider the following tips:

• Consider a higher deductible to reduce premium costs.
• Ask about discounts for safety features, age, or long-term customer status.
• Insure only the house, not the land.