Buying Mistakes to Avoid Before You Commit
Most property buying mistakes in the Philippines aren’t made out of stupidity. They’re made out of excitement, pressure, or simply not knowing what to look for.
Here are the ten most common ones — and what to do instead.
Mistake 1: Not Verifying the Developer’s License to Sell
The License to Sell (LTS) is the government permit that allows a developer to legally sell units in a project. It is issued by the Department of Human Settlements and Urban Development (DHSUD).
Many buyers skip this check entirely and just trust the developer’s branding and sales pitch. But a project being marketed — sometimes even in a slick showroom — doesn’t mean it has a valid LTS.
Why it matters: Without an LTS, the developer is operating illegally. You have significantly less regulatory protection if the project runs into trouble.
What to do: Ask for the LTS number and verify it directly at dhsud.gov.ph, or contact DHSUD by phone or in person. This takes a few minutes and can save you years of headache.
Mistake 2: Focusing Only on the Monthly Amortization
“I can afford ₱15,000 a month” — so the buyer picks a unit that matches that amortization and considers the decision made.
But the monthly amortization is only one part of what you’ll actually pay. Before you move in, you need cash for:
- Down payment or equity based on the actual seller, developer or lender payment schedule
- Documentary Stamp Tax (~1.5%)
- Transfer Tax (~0.5–0.75%)
- Registration fees
- Notarial fees
- Move-in costs and basic furnishing
And after you move in, you’ll have monthly condo dues, annual real property tax, and possibly parking fees on top of the amortization.
What to do: Calculate the total cash required upfront before committing. Include the actual down-payment schedule, reservation amount already paid, taxes and transfer charges allocated to you, registration and notarial costs, lender fees where financed, condo or move-in charges, parking, furnishing and an emergency reserve. Do not rely on one national percentage because the amount changes by transaction structure and financing.
Mistake 3: Not Reading the Contract to Sell (CTS)
The Contract to Sell is the document that binds you and the developer. It contains the unit specifications, the payment schedule, the committed turnover date, your rights if there’s a delay, and the penalties for missed payments.
Many buyers sign it after a quick glance or trust the sales agent’s verbal summary.
Why it matters: The Contract to Sell is a primary source for the parties’ obligations, but it is not always the only evidence that matters. Under Section 19 of PD 957, advertisements and sales representations about a subdivision or condominium project can become enforceable warranties against the developer or owner. Still, a buyer is in a much stronger position when important unit specifications, turnover commitments and inclusions are stated clearly in the signed contract and official project documents.
What to do: Read the entire CTS before signing. If something is unclear, ask. If something material was represented in advertising, brochures or by the sales team, keep copies and ask that the final transaction documents state the commitment clearly. Legal review is especially useful where the contract contains unclear cancellation, delay, assignment, financing, penalty or turnover provisions; the need for review depends on complexity and risk, not an arbitrary purchase-price threshold.
Mistake 4: Not Checking the Title
For resale purchases, always verify that the seller actually has clean title to the property — meaning no mortgages, liens, or encumbrances that haven’t been disclosed.
You can verify a title at the Registry of Deeds where the property is registered. Request a Certified True Copy of the Condominium Certificate of Title (CCT) and check for annotations.
What to do: Never skip the title check. If you’re using a bank loan, the bank will conduct its own title verification — but do your own check as well. For resale purchases especially, consider hiring a lawyer to conduct due diligence.
Mistake 5: Trusting Verbal Promises Over Written Documents
This is one of the most consistent themes in property buyer complaints in the Philippines. A sales agent promises:
- “The turnover will definitely be on time.”
- “That area won’t flood.”
- “You’ll definitely be able to Airbnb this unit.”
None of these promises may be in the contract. None of them may be enforceable.
What to do: If something is important to your decision, it must be in writing. Ask for it in the CTS, the developer’s official brochure, or a written addendum. If the developer won’t put it in writing, treat it as if it was never said.
Mistake 6: Skipping the Flood Risk Check
The Philippines is one of the world’s most typhoon-prone countries. Flooding affects hundreds of thousands of properties every year. And yet many buyers never check the flood risk level of a specific property before purchasing.
What to do: Check official or university-backed hazard information such as Project NOAH, then verify the exact site rather than relying on a citywide label. Flood, storm-surge and landslide exposure can affect access, repair risk, insurance availability or pricing, tenant demand and resale decisions, but the effect varies by building, elevation, drainage, access roads and actual event history.
Mistake 7: Buying Based on the Lowest Price Alone
The cheapest unit isn’t always the best value. A ₱2M unit with ₱120/sqm monthly dues, high RPT, recurring special assessments, and chronic building maintenance issues may cost you far more over 10 years than a ₱2.8M unit in a better-managed building with lower dues.
What to do: Research the HOA’s track record and financial health. Ask current unit owners (not just the developer) about their actual experience with the building. Compare the total cost of ownership, not just the sticker price.
Mistake 8: Not Accounting for the Emergency Fund
Buying a property should not drain your entire savings. If something goes wrong — you lose your job, you have a medical emergency, the building requires a special assessment — you need a financial buffer.
Many buyers make the mistake of using every available peso for the down payment and closing costs, leaving themselves with no cash reserve.
What to do: Keep a separate cash reserve after the down payment and closing costs rather than exhausting your liquidity to complete the purchase. Size the reserve around your household expenses, loan obligations, income stability, insurance coverage and likely property costs; there is no single emergency-fund number that is appropriate for every buyer.
Mistake 9: Not Understanding the Maceda Law
The Maceda Law (Republic Act 6552) protects buyers of residential properties purchased on installment. Many buyers don’t know it exists — and some developers don’t proactively explain it.
The key provisions: if you’ve paid installments for at least 2 years and need to cancel, you’re entitled to a refund of 50% of total payments made, increasing by 5% per year of payments beyond 2 years (up to a maximum of 90%). For less than 2 years of payments, you have a grace period to pay but the refund provision is different.
What to do: Know your rights under the Maceda Law before signing anything. If you’re ever in a situation where you need to cancel or are being pressured about default, read the law at officialgazette.gov.ph or consult a lawyer.
Mistake 10: Buying Without Talking to Existing Unit Owners
Developer and sales materials explain the project from the seller’s perspective. Existing unit owners can add useful operating evidence about dues, maintenance, building rules and management response, but individual experiences are anecdotal. Use resident feedback as one input and verify important claims against contracts, official records and the building’s current documents.
Before committing to a building — especially for resale or RFO units — try to speak with someone who already lives there. Ask about:
- Actual monthly dues and any recent increases
- Building maintenance quality and management responsiveness
- Any past or pending special assessments
- Noise, parking, security, and general livability
Facebook groups, community forums, and word of mouth are your best tools here. The experience of actual residents is the most honest data point you can get.
Quick Checklist: Due Diligence Before You Buy
- ☐ Verified the developer’s License to Sell with DHSUD (dhsud.gov.ph)
- ☐ Read the Contract to Sell fully before signing
- ☐ Checked the CCT for annotations and encumbrances at the Registry of Deeds
- ☐ Calculated the total cash required upfront (not just the down payment)
- ☐ Checked flood risk on Project NOAH (noah.up.edu.ph)
- ☐ Confirmed monthly condo dues per sqm in writing
- ☐ Asked about pending or recent special assessments
- ☐ Verified parking arrangement and cost
- ☐ Understood cancellation rights under the Maceda Law (RA 6552)
- ☐ Maintained emergency fund separate from purchase funds
Frequently Asked Questions
How do I know if a property developer is legitimate? Check DHSUD’s records at dhsud.gov.ph for the developer’s License to Sell. You can also check if the developer has completed past projects and whether those projects were delivered on time. Past buyer complaints filed with DHSUD are a red flag.
What should I do if I suspect a property scam? Report it to DHSUD (dhsud.gov.ph) and the Philippine National Police Anti-Cybercrime Group if the fraud occurred online. For issues with a licensed developer, DHSUD handles buyer complaints and arbitration.
What is due diligence in property buying? Due diligence means independently verifying all important facts about a property before purchase — title status, developer licensing, flood risk, compliance with regulations, actual costs, and the physical condition of the unit (for RFO). It’s your responsibility as a buyer to do this — not the developer’s or agent’s.
Can I sue a developer for delays? You can file a complaint with DHSUD. They have jurisdiction over developer-buyer disputes. You may also have legal remedies under the Maceda Law and other applicable laws. A Philippine lawyer can advise on your specific situation.
Government Sources Referenced
- DHSUD — developer licensing, buyer complaints: dhsud.gov.ph
- Project NOAH — flood hazard maps: noah.up.edu.ph
- Republic Act 6552 (Maceda Law): officialgazette.gov.ph
- Land Registration Authority (LRA) — title verification: lra.gov.ph
- BIR — taxes on property transactions: bir.gov.ph
This article is for general guidance only. For specific legal or financial advice, consult a licensed Philippine lawyer or financial advisor.
