When buying real estate, don't get yourself sales talked

I have been listening to a few real estate agents and you need to be careful before you sign anything.

They will always show you a low monthly amortization but don't get fooled because here's why:

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1. The low monthly only covers the downpayment.

Let's take an example: you are being seduced in buying a 3 millions condo. They say your monthly amortization is only 17,000 pesos a month. Wow, what a deal! But here's the truth. The 17,000 pesos are used to fund the 20% downpayment. For 3 years, you'll pay the 17,000 to cover the 600,000 downpayment. After those 3 years, you'll need to find a way to fund the 2.4 millions left to pay. They'll only give you the keys of your condo when you'll show them the big amount.

Most likely, you'll need to go to a bank and get a loan to cover the 2.4M. If no bank is willing to lend you that amount, sorry to you...

The loan financing will cost you 26,000 pesos a month for 10 years so be ready to get a salary increase to pay for your condo.

2. The low monthly will be spread in a very long period.

Let's take the example of a in house financing where you can buy a house for 5,000 a month. Wow, 5,000 only, I can afford it. Are you sure?

What they don't tell you is that as soon as you sign, you'll commit yourself to pay for 20 years. 5,000 a month x 12 = 60,000 a year x 20 years = 1.2 millions.

But the house is only worth 500,000 pesos!

So, you committed to pay a 500,000 pesos house for 1.2 millions! Was it a "wise" investment?

Also, pay attention to the different fees they are going to charge you. Those fees are big and not very clear.

Just be really careful when a real estate agent tries to sell you something because they don't care about you. They only care about their commission...