Steps in Buying a House

Step 1 Familiarize yourself with the different Classification of housing units in the market
Step 2 Set the criteria for your desired property
Step 3 Search properties based on your criteria
Step 4 Contact the broker on the property

1. Familiarize yourself with the different Classification of housing units in the market

One useful tip before buying a house is to get familiar with the different types of housing units available in the market.  In the Philippines, there are at least two ways of classifying housing units—according to the price and according to the type of building or structure.

Classification of Housing Units According to Price

The Housing and Urban Development Coordinating Council (HUDCC), in Memorandum Circular No. 05 Series of 2007, Re: Redefinition of Loan Ceilings/Packages, categorized housing units based on the current price ceilings.

  • Socialized Housing

    Price Range : P 400,000 and below (per HUDCC MC No. 1, Dec. 11, 2008)
    Lot Area : 30 sqm to 50 sqm
    Floor Area : 18 sqm to 30 sqm

    Socialized housing units are the lowest priced in the category. The units are typically attached to each other in a row. Socialized housing developments are usually without amenities, although some have club houses or gathering halls for the homeowners. The roads are typically narrow, and in many cases, without sidewalks.

  • Low Cost Level 1

    Price Range : Above P 300,000.00 to P 1,250,000.00 (BP 220 standard)
    Lot Area : 50 sqm to 100 sqm
    Floor Area : 35 sqm to 55 sqm

    Low Cost Level 1 houses are generally box type with bare interior with only one toilet and bath. It is up to the buyers to improve the home interiors. Low cost level 1 housing developments have a few amenities.

  • Low Cost Level 2

    Price Range : Above P 1,250,000.00 to P 2,000,000.00 (PD 957 standard)
    Lot Area : 100 sqm to 150 sqm
    Floor Area : 80 sqm to 120 sqm

    Low Cost Level 2 housing units are finished type with a minimum of 2 bedrooms. A swimming pool and/or clubhouse are standard amenities for Low Cost Level 2 housing developments.

  • Medium Cost

    Price Range : P 2,000,000.00 up to P 4,000,000.00
    Lot Area : minimum of 100 sqm
    Floor Area : minimum of 70 sqm

    Medium cost housing units are of better quality than low cost units. Medium cost housing communities have better and more amenities such as entrance gate, perimeter fence, guard house, club house and play courts and swimming pool.

  • Open Market

    Price Range : Above P 4,000,000.00

    Open market housing developments are also referred to as high-end. The houses are usually designed and constructed according to the buyers’ preferences. The amenities, of course, are better than those in the other categories.

Classification of Housing Units According to Type of Building or Structure
  • Single Units or Single Detached Homes
    These are free-standing structures separated from all other structures by walls or open spaces.  Single detached homes usually have areas around the house, usually with car ports or garages and intended for a single family or household. 
  • Semi-detached Units
    Semi-detached units are also often called duplex houses. Duplex houses are pairs of houses built side-by-side separated by and sharing a common wall. The layout of one unit is a mirror image of the other. Compared to detached dwellings, duplex units typically have smaller lots. A duplex is designed for two families or households, each of the twin units have complete living facilities.
  • Multi-Unit Residential Buildings (3 or more units)
    These buildings often consist of three or more housing units.  Multi-residential units may have only one to several storeys. The more common types of multi-residential units are:

    • Row houses, apartments and townhouses
      These consist of 3 or more housing units in a row. Each unit has its own private outside door. Some may have more than two storeys, especially townhouses. Each unit is separated from each other by walls extending from the ground to the roof. Row houses are typically in the socialized to low-cost housing categories. Apartments are better-appointed and cost more. Townhouses are the most expensive of the three and are generally in the medium cost to open market categories.
    • Condominiums
      These are usually high-rise buildings where housing units are individually-owned. The land, facilities and other areas however, are commonly-owned. Each floor of the building has several units. Condominiums are fast becoming popular among office workers owing to their location which are usually in commercial and business districts.

2. Set the criteria for your desired property

Deciding on what house to buy, especially your first house, is definitely among the most important decisions in a person’s life. Needless to say, it helps to have a guide or criteria for choosing a house to buy. A good start for setting such criteria is to define the reason or reasons for buying a house. If there are several reasons, determine which are the more important ones. Set your criteria according to your reasons. Below are some reasons for buying a house. See which ones apply to you.

  • To have personal space
  • For convenience
  • As an investment
  • For the family
  • For establishing one’s self in the community

Different reasons for buying a house entail having differing criteria for choosing a house to buy. A single young professional simply wishing to have personal space typically has less requirements than a married person with a family. Buying a house for the family should take into consideration the needs of every member of the family. What can be included in the criteria are: number of bedrooms, the living space, accessibility of schools, malls, parks, security, etc. Buying a house as an investment should also take into consideration the increasing (or decreasing) value of the property, its attractiveness to other people who may want to rent it, and the prospect of profit in general, among others.

Other aspects that should be considered in choosing a house to buy includes, the location, the budget, and other specifications.

Deciding on the location
The choice of the location is usually made based on the priorities of homebuyers. Some homebuyers prefer to be around the vicinity of the workplace. Some prefer to be close to friends and relatives. Still, others place a premium on being at the center of activities such as malls, entertainment centers, etc. What is important to remember is that everything has a price. The most ideal location may not be too affordable. It would be up to the buyer to balance between location and affordability.

Determine the budget
The budget may be sourced from regular income or income generated from existing business. While determining the budget for home purchase depends upon the dweller, it is prudent not to allocate all your income for home purchase. A good rule of thumb is to allocate only 30% of what you regularly earn in a month for amortization. To compute how much you can comfortable allocate for amortization, see the Self-Qualifier Tool.

Other Specifications
Sometimes, home buyers get so fixated with the housing unit or the location or the price of the house that they neglect to look at the other specifications or details. A scenario that homebuyers should avoid is finding out only after they have moved in that there is no parking space for the car, or that a factory will be built in the vicinity, or there are no drainage systems.

Other specifications or details that must be given attention include property amenities such as parking space, recreational centers and the like, architectural plan of developers, future development plan of the district, economic progress trends of the locality, etc.

When setting your criteria for buying a house, it helps to define your “negotiables” and “non-negotiables”. Non-negotiables are those things that you should have or conditions that absolutely be met.  An example of “non-negotiable” can be the availability of parking space.  Say, you have two brand new vehicles and you would not consider buying a housing unit that does not have available parking space.  While the budget can often be negotiable, some would place a ceiling or limit, such that going beyond the limit becomes “non-negotiable”.


3. Search properties based on your criteria

Once you have defined your criteria for choosing a house to buy, you may start a more serious search of properties to consider. Of course, you may always start looking for houses even without set of criteria in mind, just don’t make the purchase yet. Sometimes, your requirements and preferences only get clear to you after looking at several properties.

When searching for properties to buy, consider between buying individual property listings vs. development projects. Most of the time, units in development projects are cheaper especially in its pre-selling stage, as compared to resale properties, which are more expensive, because the community where it belongs is already developed.


4. Contact the broker on the property

A broker presents a number of advantages to homebuyers, namely:

  1. A Broker facilitates the whole transaction process
  2. He/she trips the buyer to the property sites
  3. He/she acts as negotiator
  4. He/she can give recommendations of other alternative properties
  5. He/she can search for more properties in behalf of the buyer
  6. He/she checks the sample computation and requirements and pay the Reservation Fee on your chosen property – check if you can afford to pay the down payment and the monthly amortization
  7. He/she advices on a payment scheme, facilitate the purchase and preparation of documents

Calculate how much you can borrow based
on your income, loan tenor and interest rate.

Click here to calculate
Find a BBB+B PROGRAM Broker
Forgot your password? Click here

Be a Registered BBB+B Broker
Are you a licensed Broker? Be a part of the BBB+B Program accredited brokers.
Registration is now easy.

BBB+B PropertyFinder
The online property database of the BBB+B Program

Search the database by selecting the property type of your choice on the list and by typing the location of the property you are looking for.

Back to Top