CONSTRUCTION AND PURCHASE AGREEMENT

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CONSTRUCTION AND PURCHASE AGREEMENT

THIS AGREEMENT is made this ________________ day of ________________________, 20____, between EE Home Builder (BUILDER) whose  address is at San Jose Subdivision, Cauayan Isabela ; and Mr. Jc Mer Navarro, (PURCHASER) whose  address is at Sta Rosa, Isabela. The Builder agrees to sell and the Purchaser agrees to buy a lot with TCT title: ____________ located at San Jose Subdivision, Cauayan Isabela with a residence  (“Property”) to be constructed thereon by the Builder:

This Agreement is subject to the following terms and conditions:

1. Project

The Project is the a Two-Storey Residential Structure to be constructed by EE Home Builder  at San Jose Subdivision, Cauayan Isabela.The total contract price will be Two Million Eight Hundred Pesos (Php2,800,000.00) including the purchase of lot and the two-storey residence to be built by EE Home Builder.

2. Scope of Work

The BUILDER shall exclusively undertake, pursue and manage the completion of the  project and shall likewise provide all the necessary materials, labor, tools and equipment necessary for the construction of the said project, and shall perform all such works in accordance with the approved plans and specifications, inclusive of, but not necessarily limited to the items set before this, see Succeeding pages.

The BUILDER shall not carry out extra or varied works without the permission and approval of the OWNER and/or his authorized representative. In the same manner any additional construction, revision i.e., not covered by the construction plans and scope of work specified, shall be subject to separate billings by the BUILDER.

All additional constructions and amendments to or changes in the plans and specifications from the date hereof and the corresponding costs thereof shall be subjected of a written agreement between the parties; and the amendments or changes shall have the effect of reducing or increasing the contract price hereinbefore stipulated, the same shall be correspondingly adjusted.

3. Contract Period / Time of Completion

The work to be performed under this agreement shall commence from and after the receipt by the BUILDER of all approved construction permits and licenses required for the project, reservation fee, down payment and upon written approval by the OWNER.The work shall be completed by the BUILDER before the final release of housing loan. Provided, however, that any delay of reason of force majeure of fortuitous event, or by reason of additional constructions or amendments to or changes in the construction shall be excluded.

4. Purchase Price and Payment

The total purchase price is Two Million Eight Hundred Pesos (Php2,800,000.00) including the  82 sqm lot area and two-storey residential house to be constructed by the BUILDER.
The PURCHASER,  Mr. Jc Mer Navarro, agrees to pay a reservation fee of Fifty Thousand Pesos (Php50,000.00) upon signing of this agreement. Also,  the purchaser will pay a 25% of the total cost amounting to Five Hundred Sixty Pesos (Php560,0000.00) to be payable within six (6) months.  The reservation fee and the downpayment of 25% will be deducted to the total cost of the contract price.

The reservation fee and the 50% of the down payment amounting to two hundred eighty pesos (Php 280,000.00) is non refundable if the PURCHASER terminate this agreement.
The reservation fee and down payment will be used as mobility fund and to cover material and labor expenses for the project.  The remaining balance of 80% amounting to Two Million Two Hundred Forty Thousand Pesos (Php 2,240,000.00) will be loanable through Pag-Ibig Housing Fund.

5. Guarantee 

The PURCHASER and the BUILDER agree on the application of the following conditions for the faithful performance of the Contract/Agreement.The BUILDER hereby guarantees that the project shall be constructed strictly in accordance with the scope of works and condition of this contract and shall make good any defect in materials and / or workmanship to the fault of the BUILDER/CONTRACTOR within Six Months after the full completion of the project.6. Termination of ContractThe BUILDER has the right to terminate the contract or stop work if ordered by any court or other Public Authority, for a period of three months, through no act or fault of the BUILDER or anyone employed by him.The BUILDER shall submit written notice or if ordered by any court or other public authority to the OWNER to stop work or terminate this contract/agreement and claim payment for all work executed, profit and damages/loss on the basis of the work completed.The PURCHASER shall pay necessary payment to the BUILDER; one week after a notice of payment was given to the owner, the BUILDER has the right to stop the construction to any failure of payment by the OWNER.

7. Acknowledgement of Agreement

The PURCHASER  acknowledge that they have read and fully understand the provisions of this Agreement.

IN WITNESS, the BUILDER and PURCHASER have executed this Agreement.

 

_________________________

BUILDER

_________________________

PURCHASER

Documents Needed to Build a House

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In order to start construction your home, there are permits or documents needed.

The following are the documents needed to build a house:

  1. Architectural Plan. It contains architectural drawings, design specifications, calculation, time planning of the construction process and other documents. Also, it is a design and planning for a building. It can be provided by your contractor or house builder.
  2. Barangay Permit. It is a permit from the barangay that has jurisdiction over the area you chose.
  3. Building Permit. It is issued by the municipality in order to start for house or building construction. In order to get a building permit, you should submit architectural design in order if the design and structure is compliance with the National Building Code.
  4. Occupancy Permit. After house construction, you will need to secure Occupancy permit

Some Factors to Consider in Building your Dream House:

  • Budget. It is very important to determine how much money you need for your dream house. And if plan to borrow money from bank, know how much equity you can afford.
  • Location. You should know the location of the lot where your house will be built on. Factors in finding a lot includes neighborhood, safety of the location, amenities, water supply, accessibility of the place, etc.
  • Contractor, It is very vital to find a right contractor for your dream house. Factors consider for finding a right contractor includes financial capability of the contractor, previous client, quality of work, recommendation of friends or families, etc.

How to Know if Title is Authentic

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Buying a property involves a contracts and lot of money so it is very important to check from the seller the title if it is really authenticated before buying any properties or purchasing a land.

You should always check if the seller is really the legal owner or rights to the property because land title is being faked by scammers by the use of modern technology.  The fake land title is almost the same as the authenticate title.  Always be diligence in order to protect your money against scammers.  It is better safe than sorry.

Here are some tips to identify if the land title is really authentic:

  • Request a copy of Land Title. Legitimate seller can provide this document since it is only a photocopy and not the original one.
  • Go the Registry of Deeds and ask for a certified true copy of the title and they will ask you to fill up a form for your request. The processing fee is around three hundred pesos.
  • If the land title is authentic, the Registry of Deeds will be able to pull out the title for the property.  The certified true copy from the Registry of Deed should match the same information in the land title of the seller.

Tips to Avoid Renovation Regrets

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House renovation is the process of improving damaged, broken or outdated structure.  It is sometimes called house remodeling. During house renovation, the style of kitchen and ceiling can be modified as well as the wall color and house color of the house or even the size of the house.  One mistake during house improvement can have big implications. It sometimes causes spending too much money for renovation.

Here are some tips to avoid renovation regrets:

  1. Take time to think about the size of the room, living room, kitchen, and dining room as well as furniture placement. Think of how many people who will accommodate each room.
  2. Do some research about the quality of the product to be installed in your house.  Buying cheap materials can suffer your house. What you get is what you pay.
  3. Make sure that you have the well-set plan before starting your house renovation.  There are some home owner just start their renovation without the final plan for the designs and things to be done.
  4. Be smart in spending money to your house renovation. Setting unrealistic budget for your renovation is one of the common mistakes. Prioritize the things you should do for your money. You can seek advice from specialist from your renovation to set a realistic budget. These specialists includes architect, interior designer, home builders can help you to make a big picture plan for your renovation.
  5. Lighting effects. If you really want to have modern and cozy design, you have to think about the lighting in your home.  The lighting may change the color, feeling and ambiance of your home.

How to Compute Monthly Amortization for Housing Loan

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Have you ever wondered how bank and other financial institution compute your house monthly amortization?  There are different ways for financing your home, Pag-ibig, bank or in-house financing and these establishments use a factor rate. Monthly amortization composed of principal and interest rate payment regularly over a specified period of time.
You should educate yourself for the computation of your monthly amortization so that you will know how much money you will need to keep for you house monthly amortization.

Here are some data for your monthly amortization:

  • Total Contract Price (TCP) of the property intent to buy
  • Loanable amount
  • Down Payment  (DP) or equity required by developer. Developer usually required 20% down payment. Minimum equity is computed from the total contract price less the loanable amount
    Minimum Equity = Total Contract Price – Loanable Amount
  • Interest Rate. This depends to the Pag-ibig,  banks, in-house financing or developer
  • Factor Rate.  It is a daily rate on the loan

To show:

Assume that you will buy a house and lot, the total contract price is Php 2,500,000.00

Total Contract Price – 2,800.000.00

Interest Rate –  11.25%

Loanable Amount –  2,200,000.00

Down Payment – 500,000.00

Factor Rate – 0.0139168947 (10 years, 11.25%)

Monthly Amortization = Loanable Amount  x Factor Rate

2,200,000 x 0.0139168947

Monthly Amortization = Php 30,617.17 per month for 10 years

It is simple to compute your monthly amortization once you have the complete data.

Sample Computation for House Renovation

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Project: Renovation of Bungalow House
(Ceiling except living room, 2 cr/bathrooms, mini-bar counter, internal and external painting, windows renovation, stainless stairs)

Estimates Materials and Labor

Materials Cost

400 pcs. Tiles   – Php 55,000.00
50 pcs. Granite  – 12,000.00
2 pcs. Bowl and lavatory  –  25,000.00
Faucets, shower, kitchen sink   – 25,000.00
20 pcs. Adhesive  – 5,000.00
20 pcs. 10mm steel   – 3,000.00
15 pcs. 12mm steel   –   4,000.00
40 pcs. cement and sand  –  10,000.00
60 pcs. metal furring   –  5,000.00
50 pcs. wall angle –  2,000.00
50 pcs. c-channel   –   4,750.00
26 pcs. hardiflex    –   14,300.00
3 box blind rivets     –   1,170.00
13 pcs. plywood ¾     –   18,200.00
Nail and concrete nail, glue stick,
Wood casing, concealed hinges   – 13,000.00
2 doors flush door    –   6,000.00
2 aluminum door   –  6,500.00
5 pcs. sliding windows  –  25,000.00
2 pcs. small window   –  4,000.00
Hand rail stainless steel    –   40,000.00
Paint internal and external & roof and labor – 130,000.00
Deco stone   –  10,000.00
Exit door    –     5,000.00
Gas    –   3,000.00

Labors

Mason and 2 helpers  –   45,000.00
Carpenter for ceiling    –   30,000.00
Carpenter for cabinets     –   30,000.00
Welder   –  15,000.00
Plumber    –   10,000.00
Supervision Fees    –   30,000.00

TOTAL                     –        577,320.00

New House or Resale

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Advantages of Buying a New House

Purchasing an old or resale house is much cheaper than constructing a new house but there are some factors to consider before deciding whether buying new or resale house.

  • You can choose your own design as well as choices in house features and amenities. Your home builder or contractor can add personal touches that match to your personal taste and needs.
  • There is no home repair cost. Unlike the resale house, there are plenty of things you need to repair since it is old and probably there is something wrong during the construction that is why owner wants to sale it.  Some new house can have repairs but kept at a minimum and builder includes warranties for a certain period of time.
  • Easy implementing of new technologies.  In the resale home, implementing new technology may be awkward since resale house is not design on the new trend and if you do it can be too costly.
  • New house design is more durable that the older house. Some materials founds in older house can be hazardous to the health.  New house nowadays follows building codes requires by the National Building Codes and safety requirements than older houses. Wiring systems have been improved as well as the house construction methods and techniques in order to build a house that is suited in today’s environment.
  • Resale house has old design.  House renovation is very costly.

Key Tips for House Construction

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There are some factors to consider before someone engage in house construction.  These factors are very important so that you will be in the right track and minimize the expenses when building your house.

Look for the Right Location

Be sure that the location of your house is suitable for your lifestyle. It should also be accessible to market, hospital, school and your workplace. Also, it should have water and electrical supply and know if the place or location is safe. Determine also your neighborhood before buying a lot.

Follow the Laws

Before constructing a house, there are some requirements needs to submit to your municipal office such as building permit, electrical permit, etc.  Make sure that you do not break any rules, regulations or laws to avoid suspension and penalties.

Choose the right people

Be sure to look for the right contractor for your house construction. If you plan to do your house by yourself, make sure to hire right person for the work such as mason, carpenter, construction worker, welder, plumber, electrician, etc.  Visit their previous work so that you will have an idea of how they word also, talk to their previous client.

Monitor house construction

Involve yourself to the house construction. Do not distance from the house construction with the assumption that the contractor will do everything. Keep on checking whether your contractor does the house construction according to the house plan you agreed to build. Communication is very important. You should know everything about your house to avoid regretting in the future. Minor revision of your house sometimes means a lot of money.

How to Get Building Permit

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Building permit is one of the requirements before the start of your house construction. You or your contractor or designer will be responsible for securing building permit. Building permit is with the compliance with the proper construction of a house or a building set by law or the National Building Code. It is to ensure that the project plans comply with local standards for land use, zoning and construction.

If you proceed with the construction without building permit from your municipality, the construction of your house will be stopped until your building permit has been released.

The following are the requirements in order to get building permit here in the Philippines:

1. Applications forms duly signed and sealed by engineers concerned: 5 copies of building permit forms, 3 copies of electrical permit forms and 3 copies of sanitary permit forms.

2. Five (5) complete sets of detailed plans

3. Two storey building need structural design analysis which is signed and sealed by Civil Engineer at every page

4. More than two-storey building need boring and plate load test and seismic analysis

5. Proof of Property such as photocopy of Transfer Certificate if Title (TCT), 5 copies of photocopy of tax declaration of property (lot) certified true copy, 5 copies of photocopy of current tax receipt

6. If property not registered under the name of applicant need to submit 5 copies of contract of lease, 5 copies of contract of sale, 5 copies of affidavit of consent of the lot owner for the construction of building or house, 5 copies of absolute sale

7. Permit billboard (0.60 x 0.90 plywood

8. Bill of materials and specification (5 copies) which also signed and sealed by an engineer or an architect at every page.

9. Location clearance

10. Photocopy of PTR # and PRC license of all concerned engineers and architects

11. Clearance from DPWH if the construction is located along National Highway

12. DOLE clearance

Here are the procedures on getting your building permits:

1. Go to the municipal office and get requirement checklist and application forms. Your engineers and architect may fill them up.

2. After filling out all application forms, submit the papers.

3. Acknowledgement slip will be issued which bears the date of the status of your application. It usually takes 10 working days.

4. Order of payment will be given if your application is approved and in compliant with the National Building Code. This order of payment is the payment for the necessary building permit fees.

5. Go to the treasurer’s office and pay the fees range from Php 6,000 and above depending on the location, construction size, and assessment plan.

6. Present the photocopy of Official Receipt (OR) to the releasing section of the municipal office

7. Go back to the releasing section after 5 working days and claim your building permit.

How to Lower House Construction Cost

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Building your dream house is means a large amount of money so it better to find ways to lower the cost of your house construction. When cutting a cost, make sure that quality of your house did not sacrifice. Always go to the branded materials.

Here are some tips to lower the cost of your house construction:

1. Avoid change order.
Change in design or materials at the last minute are a change order. This change order means additional budget for your house construction. Some minor revision requires a long hours of working for your construction people and it means a large amount of money.

2. Reduce the size of the house.
You can reduce the cost by adjusting the square footage of the entire house. Think of small but cozy design to slash the cost. Reducing the square footage for your house is definitely cut the cost of your budget.

3. Opt to simple roof system
Roof is one of the most expensive materials and labor in the house construction. Complex roof systems are more costly so choose a simple roof system without suffering the quality of your roof.

4. Choose the right person to build your house
Make sure that the person who will build your house and working for you are with good reputation to avoid conflict in the future. You are not satisfied with their work, definitely you will change your people and their work and it means additional cost.

5. Purchase materials needed for the construction
Some store or hardware gives discount for bulk orders of materials. The cost of house construction materials most specifically the steel is not stable, so it is wise to buy materials while the cost is still low.