Why Choose a Pre-Selling Subdivision?
Buying a house-and-lot in a pre-selling subdivision offers numerous advantages. In this blog, we'll explore why investing in a pre-selling subdivision is a wise choice.
What is a "Pre-Selling" Subdivision?
A pre-selling subdivision is a development project that has received a License to Sell (LTS) from the Housing and Land Use Regulatory Board (HLURB) but is still under construction. Never purchase property in a subdivision without an LTS, as it protects you from potential risks.
In a pre-selling subdivision, land development is ongoing, and houses may still be under construction or yet to start. Sometimes, the land, roads, and drainage are well-developed, but housing completion could take 2-3 years.
Understanding Completion Dates
Subdivisions typically have different phases: land development and housing development. Land development usually takes about a year, though this may be extended upon the developer’s request. Housing development also generally spans a year, based on the Contract to Sell or LTS issuance date. Buyers should be informed of any delays. For detailed regulations, refer to the 2016 Revised Implementing Rules and Regulations under Presidential Decree No. 957.
Ready for Occupancy (RFO) Subdivisions
In RFO subdivisions, land development and amenities are complete, but house construction begins only after a portion of the down payment is received. Units are constructed after payment, with an equity term of at least 12 months. RFO units are ready for immediate move-in once all payments are settled, including reservation fees, down payments, and transfer fees. Some buyers might pay 10% of the equity upfront and move in while paying the rest in installments.
Equity Terms
Equity terms vary with the development phase. Some subdivisions offer up to 48 months to pay the equity, allowing for affordable monthly payments. If you prefer an earlier move-in, such as within 12 months, the house may be ready for occupancy sooner. RFO units usually have a shorter equity term, ranging from 3 to 12 months. Always confirm payment terms with the developer or agent.
Why Ensure the Developer Has an LTS
The LTS indicates that the developer is trustworthy and capable. The developer must submit a subdivision plan to the HLURB, which assesses it according to standards and regulations. An LTS is required for legal selling; without it, selling is unauthorized. Developers must also post a performance bond to guarantee project completion and compliance with laws.
Why Avoid Subdivisions Without an LTS
Buying in a subdivision without an LTS is risky, with high chances of incomplete or abandoned projects. Contracts for unregistered projects are binding if they meet legal requirements, but always request a notarized contract.
Advantages of Pre-Selling Subdivisions
Lower Introductory PricesPre-selling prices are significantly lower compared to Ready for Occupancy (RFO) units, often by 30% to 40%. Developers may offer discounts of 5% to 10% for early buyers or full payments.
Choice of Location and Home TypeEarly buyers can select prime locations and preferred house types, such as corner lots or single-detached homes.
Flexible Payment TermsMany pre-selling subdivisions offer up to 48 months for down payments without interest, making homeownership more accessible.
Monitor Construction ProgressSome developers allow buyers to oversee construction, though safety concerns might restrict access to the site until completion.
Disadvantages of Pre-Selling Subdivisions
Risk of Incomplete ProjectsWhile rare, incomplete or abandoned projects can occur. It’s crucial to choose reputable developers with a track record of completed projects.
Differences Between Model and Delivered UnitsThe model unit may appear better maintained than the actual unit delivered. Visit completed projects to gauge construction quality.
Potential DiscrepanciesIf no model unit is available, ensure to visit similar completed projects. The actual delivered unit might differ from promotional materials.
Realistic TimelinesConstruction delays are possible. While developers aim to avoid delays, some are inevitable. Understand that unreasonable delays could be grounds for contract cancellation.
EXPLORE PRE-SELLING TOWNHOUSES IN MACTAN ISLAND
Check out pre-selling subdivisions in Mactan Island, Cebu, like Amberley Subdivision, known for its well-planned layout and wide roads. Own a townhouse starting at just P9,200 per month.
Amberley Subdivision is a well-planned subdivision with wide subdivision roads. Highly recommended. Own your townhouse for as low as P9,200 per month.
If you have questions about buying a house in a good subdivision, contact us. We're here to assist you every step of the way.
This guide is for educational purposes only. Consult a lawyer for advice on your specific situation. If you have any questions or need personalized assistance, contact us at 0920 207 5035 or email cebuhousefinder@yahoo.com. We're here to guide you every step of the way, ensuring a smooth and confident buying experience.
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