Someone offered you a preselling unit.
They showed you pictures of how the building will look.
They told you the monthly payment.
They didn’t tell you when you’d get the keys.
Or how much you’d still owe on that day.
Both are written on the unit’s price breakdown.
This page walks you through both.
The short answer
A preselling property is a unit you buy before the building is finished. You reserve one specific unit, pay part of the price while it’s being built, and pay the rest when it’s turned over to you.
An RFO unit, ready for occupancy, is already finished. You can walk into it, move in soon, and pay for it on a much shorter clock.
On the studio below, 70% of the price is still owed on the day you get the keys.
It isn’t your fault if nobody showed you that. Preselling is sold on the smallest number first.
What preselling means
You’re buying a unit that exists on paper. It has a unit number, a floor, a size and a price. You just can’t stand in it yet.
You choose it from a floor plan and an artist’s rendering. What you’re really buying is the developer’s plan, and the date it says the unit will be ready.
A developer needs a License to Sell from DHSUD before it can sell preselling units. Ask for the number itself, because a brochure that says “approved” isn’t the same document, and the number is what you can check.
A real sheet
Here’s one: a 35 sqm studio in Cebu City, from one of the preselling projects I currently represent.
| Unit price, VAT included | ₱11,242,424 |
|---|---|
| One parking slot | ₱1,650,000 |
| Total contract price | ₱12,892,424 |
These figures are the developer’s own, from the sample computation for this unit. Both prices and availability move.
The total contract price, or TCP, is the full amount you’re agreeing to pay, charges included. On this sheet it includes a parking slot.
Before parking, the unit works out to ₱321,212 per square meter. I worked that out myself. It’s a computation, not a valuation.
When you pay, and when you move in
| Reservation fee, on the day you reserve | ₱100,000.00 |
|---|---|
| Downpayment, rest of the first 10%, within 15 days of reserving | ₱1,189,242.40 |
| 20% of the price, over 43 months | ₱59,964.76 a month |
| Balance, 70%, at turnover in April 2030 | ₱9,024,696.80 |
| Total contract price | ₱12,892,424.00 |
These figures are the developer’s own, from the same sample computation. I worked out the shares myself.
Developers call the years you pay while the building goes up the equity phase. On this sheet, that’s the reservation, the downpayment and 43 monthly payments.
By the time you get the keys, you’ve paid 30% of the price.
The other 70% is due that month.
“Misleading yan pag ganyan, making them believe 15k monthly, onset plng dapat let them know 15 monthly for 3 years then 50 or whatever K monthly succeeding years.”
Comment on a Philippine property video
It’s misleading when it’s done like that, making them believe it’s 15k a month. From the start they should be told: 15k a month for 3 years, then 50k or whatever a month in the years after.
The usual advice is to pick a monthly you can manage. That’s worth doing. It won’t tell you whether you can wait until April 2030, or what you’ll owe when you get there.
Unless you pay the balance in cash, it usually becomes a bank loan. That step is called loan takeout: a bank pays the developer, and you start paying the bank. The bank loan gets its own post.
What RFO means
The building’s finished.
You walk into the actual unit. Not the showroom one with the good furniture, the real one.
Then you check the things a brochure can’t tell you. Turn on the shower, and if it’s a high floor, do it around six in the evening, when the whole building is home. That’s when you find out what the water pressure really is. Check whether the aircon is installed or only provided for, which can mean a hole in the wall and a plug. Find out where laundry is supposed to dry, because many buildings won’t let you hang it on the balcony. Ask which circuits the genset covers during a brownout: the hallways and elevators, or your outlets too.
And ask what happened to that building during Odette. Anybody who was here in December 2021 knows why that’s the question.
The money moves faster, though. Downpayment, financing, and then you’re paying the bank almost right away.
The trade-offs, both ways
Preselling, in your favor
- A lower cost of entry while the building goes up
- You lock a price years before you take possession
- A long runway to get your financing in order
Preselling, against you
- You’re buying a floor plan and a date
- Completion and delay risk sit with you
- If the bank’s appraisal comes in under your balance at takeout, you cover the gap in cash
- Selling before turnover is hard, because the buyer pool is thin
RFO, in your favor
- You inspect the actual unit before you pay for it
- You can move in or rent it out within months
- No completion risk and no turnover date to wait on
RFO, against you
- More money, much sooner
- You pay today’s price, not one locked years ago
What I think
The equity phase is the best thing about preselling. On this studio, 43 monthly payments add up to 20% of the price with no interest charged on top, while the developer carries the construction. That is how most people get into a building like this at all, and I’ve written about why preselling costs less separately.
Still, I think the turnover date deserves as much of your planning as the monthly does. The monthly tells you whether you can reserve. The date tells you whether preselling fits your life at all.
I can’t tell you whether any building will be finished exactly on its date, and nobody honestly can. What the sheet gives you is the date to plan against, and the balance that comes with it.
So here is the test I would put to anyone choosing between the two: can you wait until April 2030, and would a bank lend you ₱9,024,696.80 today?
If both answers are yes, you are buying with your eyes open. If the second is no, that is not a reason to walk away. It is what the years before turnover are for.
This doesn’t fit if you need a place to live soon. A building that is still years from finished cannot give you that, whatever the monthly. It doesn’t fit either if there’s a real chance you’ll need the money back before turnover: until the building sells out, the developer is still selling units just like yours, with promos behind them. And don’t reserve on the strength of the monthly alone. If you haven’t checked the balance against your income, you haven’t checked the purchase. The right price on the wrong property is still the wrong property.
I check the loan question before you ever see the site, so you’re not finding out the answer from a bank at turnover.
Questions
Can I see the actual unit before I buy preselling?
No, because it hasn’t been built. You choose from the floor plan, the specifications and, where the developer has one, a model unit. Renders are artist’s renderings, so treat them as the plan rather than the finished room.
When do I get the keys?
At turnover. On the studio above, the sheet puts it at April 2030. Every project sets its own date, so read the turnover line on the sheet for your unit.
What do I still owe at turnover?
On this studio, 70% of the price: ₱9,024,696.80. Unless you pay it in cash, that’s the amount a bank loan would need to cover.
Is parking included in the price?
On this studio, yes. The sheet adds one parking slot at ₱1,650,000, which is 12.8% of the total contract price. I worked that share out myself. Other projects price parking on its own sheet, so check which way yours is done.
Can I buy preselling from abroad?
Yes. Someone usually has to sign documents on your behalf, and getting that arranged from overseas takes longer than people plan for, so start before you choose a unit. Have a lawyer prepare that document.
The one thing to take with you
Preselling is a date and a balance, not just a monthly.
When you look at a monthly like that, it’s natural to think kaya ra. I can manage this. Maybe you can. Now you get to answer it for the whole wait, and for what’s owed at the end of it.
Ask for the computation on the unit you’re considering, and read two lines before any other: the turnover date and the balance. Then check my numbers against the sheet. If they don’t hold, tell me.
If you need the keys soon, look at RFO first. If you can wait, preselling gives you years to get ready for the balance.
If you’d like a unit you’re weighing up worked through the same way, send me a message on Messenger. You don’t have to be my client for that.
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