Pre-selling vs RFO House and Lot
Investing in a new home will inevitably cost a lot of money. But did you know there is one way to effectively reduce the costs of buying a house and lot? We’re talking about purchasing a pre-selling house and lot.
Buying a pre-selling vs a ready-for-occupancy (RFO) house and lot has a lot of advantages. Find out what they are below.
The Advantages of a pre-selling house and lot
- Affordability - A pre-selling house and lot is more affordable than its RFO counterpart. How much cheaper? Around 30-50%! Apart from just being lower in price, many real estate developers will provide interested buyers with different payment schemes, discounted down payment rates, and even in-house financing options.
- Flexible payment schemes - As we mentioned earlier, developers of pre-selling properties will typically provide homeowners with flexible payment schemes. An affordable pre-selling house and lot can usually be paid off in monthly installments with minimal or no interest fees.
- Your pick of the unit - Buying a home at the pre-selling stage allows you to choose the precise location of your home. You can choose a home that’s closer to the amenities such as the community playground, so your children have easy access to it, or a home that farther away from the entrance so you get more privacy.
- Higher ROI - If you’re buying the home as an investment vehicle, then buying a pre-selling house and lot makes more sense. You get to lock in the price of the lot while it’s still low and take your time paying for it while waiting for it to be completed. This means by the time it has been completed, the value of the land and the property have already appreciated.
The Disadvantage of a pre-selling house and lot
- Longer wait time - Because you’re investing in a property that hasn’t been built yet or is still in the process of being built, you’ll need to wait until it’s ready to be turned over to you. If you’re planning on selling or having the property rented out, this would mean waiting a bit longer before getting the chance to do so. If you plan on living in the property yourself, you’ll need to design your home and make arrangements for your furnishings while the home is still under construction. Depending on the developer and the terms you have signed, waiting can take anywhere from three to five years on average.
Advantages of an RFO house and lot
- Quick turnover - RFO homes, as the name implies, allow you to move in as soon as the paperwork, requirements, and down payment have been cleared. There’s no wait time involved.
- Visibility - With RFO units, what you see is what you get. You get to explore the very home you want to purchase and inspect each nook and cranny before signing the paperwork. There are no surprises or let downs involved because you get to explore and experience not just the unit but even the amenities and community for yourself.
The disadvantages of an RFO house and lot
- Higher prices - A RFO home is more expensive than a pre-selling home because the land value has already appreciated since the time the project began. The higher price is also because homeowners can conveniently move in right away.
- Less time to save - RFO homes aren’t just more expensive, they usually have fixed payment schemes as well. If you’re interested in a RFO home, be prepared to pay the full upfront down payment price which is typically 5% to 20% of the property’s total value.
- Limited choices - RFO units are the completed units that were left unsold after the pre-selling period. So, you’ll have to settle for what’s available after the pre-selling period.
Tips in buying house and lot in Cavite
If you’re looking to invest in a house and lot in Cavite, we highly recommend buying a pre-selling home. Not only is it more affordable, but Cavite’s real estate value is rapidly appreciating every year, so it’s a good idea to purchase a home while the prices are still low.
For those looking to invest in a pre-selling house and lot for sale in Cavite for a low price, talk to us at Micara Estates – Tanza today!