If you’re only starting your search for a condo, you may have encountered some words that don’t make sense to you.
Sure, you know that you have to pay a down payment for your condo, and in your search for the right project, you’ve also learned that you have to pay a reservation fee to have a stake in the condo you want.
But there are still a lot of words and phrases that jump out of you that can get you feeling overwhelmed and frustrated, so we’re listing down the standard terms and phrases that you should know while looking for your dream condo.
We’ll also mention terms you’re likely to come across if, in your due diligence, you meet members of your condo’s Homeowners’ Association.
Jargon you should know before buying a condo
Amenities: Features in a condo for the use of homeowners and tenants in good standing with the HOA.
Amilyar: Also known as annual real property taxes (RPT), this is a yearly tax that property owners must pay to the city where their property is located.
Annual meetings: General assemblies where the developer and/or the condo’s Board of Trustees (usually formed by the Homeowners Association) report management and financial matters to homeowners. In some condos, elections for HOA officers are also held during the annual meetings.
By-laws: Set of rules mandated by the Housing and Land Use Regulatory Board (HLURB) that govern the condo and its residents.
Capital Gains Tax: Defined by the Bureau of Internal Revenue as tax imposed on the gains presumed to have been realized by the seller from the sale of a property.
Certificate of Title: A municipal record that acts as the record of ownership.
Closing fees: Costs incurred by a buyer once a real estate transaction is closed. These are fees in addition to the property purchase price.
Common areas: Parts of the condo that are for the common use of all homeowners, such as amenities. Your condo dues pay for the repair and maintenance of these areas.
Condo dues: Also known as HOA fees, these are paid to the HOA and used to manage the condominium property and maintain its daily operations. Condo dues are not inclusive of the monthly payments to your condo unit. Parking slots availed at your condo are also subject to condo dues.
Contract of Sale: Also called Contract to Sell (CTS), this document lists the terms and conditions of the sale.
Deed of Absolute Sale: A contract between the seller and buyer, where the seller will agree to transfer the property to the buyer.
Department of Human Settlements and Urban Development: Local government agency that governs the condominium corporation.
Financing: A payment plan for condo buyers, which can be availed either through the bank or in-house (with the developer). Interest rates and payment terms will vary depending on your financing options.
Fixed interest rate: An interest rate that will remain unchanged for a certain period. Banks offer fixed interest rates ranging from 3 to 5 years. Some will offer fixed rates up to 10 years.
Foreclosure: The process by which the bank will repossess your property should you fall behind on your payments and fail to settle them within a certain period as prescribed by your financial institution.
Homeowners’ Association: The HOA is the condominium’s governing board and is composed of unit owners in good standing of the condominium corporation. In simple terms, they help keep the peace in the community and manage the projects and funds of the condo.
Insurance: Condo buyers are required to purchase property insurance when financing their condos through a housing loan, although this is usually already included in the final computation by the bank or in-house.
Interest: Amount paid by the buyer above the amount borrowed.
Maceda Law: Republic Act 6552 protects buyers of real estate property in installments.
Monthly amortization: Monthly payments made toward your condo, either to the bank or your developer.
PDC: Post-dated cheques. Some developers require this as a form of payment for the monthly payments that will go toward your down payment. Alternatively, they will also agree to an auto-debit arrangement. Speak with your developer to find out which options are available to you.
Preselling: Condos that are still under construction. Preselling condos are often sold at promotional prices, discounts, and freebies, although this varies per project and developer.
Property Advisor: A real estate expert that buyers and potential buyers can turn to for inquiries and advice regarding their ideal or purchased property.
Ready for occupancy: Also called RFO units, these are condos that are semi-furnished and ready for move-in. RFO units tend to be more expensive than preselling units due to the shortened waiting period for turnover and convenience.
Rent-to-own: In the context of RTO in the Philippines, this means paying the developer the down payment in installments at the same time as your bank amortization. In most cases, the unit will already be turned over to you even before you finish the down payment.
Reservation fee: Fees charged by the developer to secure your slot for a condo unit and/or parking slot. Costs will vary per project and developer, but this is often deducted from the total contract price (TCP) of your unit.
Total contract price: The total selling price of your condo.
Unit turnover: The event where a developer hands over the keys and property rights of the condo unit to the buyer.
Are you buying? Here’s why you need to know
Financial experts and licensed real estate professionals will always advise you to practice due diligence before you make a big decision like investing in a condo, and knowing the costs you can incur and the rules and regulations you ought to abide by can help impact your decision whether or not you really want to push through with your condo ownership journey.
You may encounter other terms that aren’t on this list, and if you don’t know what they mean — that’s okay. Ask your DMCI Homes Property Advisor to explain them to you; they’ll be more than happy to!
Still don’t have a DMCI Homes Property Advisor? Set up an appointment to talk to one of our property experts.