August 16, 2023

Pre-selling vs. RFO Condo: Which is Right for You?

By: Melecio Martin G. Arranz IV

Condominium projects are often sold out long before the structure is completed. When it comes to purchasing condos for sale in the Philippines, developers offer several options for buying a unit at different stages of the project. 

Buyers can either opt for a ready-for-occupancy (RFO) or pre-selling condo unit. Both alternatives have their pros and cons, depending on your goals as a buyer. Which option is better if you want to save more? Which one will allow you to move into your new home quicker? Find out in the article below.

What is a pre-selling condo?

Also called “off-plan” properties, pre-selling units are condo units sold to investors or homebuyers during the early stages of the construction process. It can be during the project’s planning stage, before completion, or before construction. You’re purchasing a unit that doesn’t exist yet, which means you’ll have to wait for the construction, completion, and turnover before you can step inside it.

Property developers offer pre-selling units to help finance the condo development itself. Since you’ll be purchasing a condo at its early stage, most developers reward early buyers with introductory promos and discounts to make the unit relatively more affordable and attractive to buyers.

Pre-selling condos are also a promising investment opportunity. By the time the project is complete, the property’s market value can increase. They can provide a fast return on investment, as you can resell the finished unit at a higher price than what you got them during pre-selling. 

What is an RFO (ready-for-occupancy) unit?

RFO condos are completed units ready for turnover. You can buy them directly from developers or individual property owners. Once you’ve finished all the paperwork and finalized the payment agreements, you can move into the unit immediately. Most RFO units have flexible payment schemes, like lease-to-own arrangements. 

If you’re a skeptical investor, an RFO unit may be the better option for you. Sometimes, showrooms and architect renderings aren’t enough to convince you of the unit’s investment potential. With RFO units, you can physically inspect the unit, the whole development, and the neighborhood before you decide to put your money down. 

The Difference Between a Pre-selling Unit and an RFO Condo

When choosing between the two types of units, you should consider several factors as understanding these aspects can help you weigh the pros and cons between them.

Turnover time

Depending on the stage of the development, you can move into pre-selling units in at least less than a year to more than four years. Meanwhile, for RFOs, you can move in as soon as the purchasing process is wrapped up. 

Availability of utilities and amenities

Since construction hasn’t started or is ongoing for pre-selling units, you have the opportunity to customize your floor plan (if your pre-sale contract permits). You’ll have access to modern amenities and facilities once the unit is done. 

Federal Land’s The Grand Midori Ortigas is an example of a pre-selling condo with well-thought out amenities. When the development finishes by December 2024, you can enjoy living in this two-tower Zen-inspired sanctuary with a jacuzzi, a pool lounge, a yoga room, electronic bike racks, and a Zen garden.

For RFOs, the amenities are readily available. You don’t need to wait for a long time to enjoy the condo’s top-of-the-line utilities and facilities. 

Selection of units

Pre-selling units can make unit selection more flexible for buyers. Since the building isn’t constructed yet, you can choose which floor you want, which view you’d like to face, or which layout you prefer for your unit (studio, one-bedroom, loft, penthouse). On the other hand, RFO units provide a limited selection, allowing you to choose only from what’s available or among offered units. 

Price

As mentioned, developers offer low introductory prices for pre-selling units to attract investors and homebuyers who are looking to make significant savings from property buying. 

While your margins are certainly higher when investing in pre-selling units compared to RFO units, in general, condominiums make good long-term investments as their value increases over time due to their amenities and their prime locations.

Property tour and inspection

With pre-selling units, you’ll only get to physically tour and inspect the property once the development is finished. You can get a sneak peek of your condo through architect renderings and showrooms. Meanwhile, for RFOs, you get to immediately see your actual investment and inspect the condition and finishes of the unit. There wouldn’t be any surprises because what you see is what you get. 

Federal Land’s Paseo de Roces is an RFO condo within the Makati Central Business District. If you want to see what it’s like to live in a community that matches the excitement of Makati City, you can do so by scheduling a visit. By doing this, you can step into the unit, view the amenities, and get a general feel of the kind of life that awaits you. 

Find the One with the Best Advantage

Whether you choose to go for pre-selling or RFO, remember that you should pick the one that fits your goals. If you want to invest in real estate, pre-selling units are your best choice because you can get a quick return on your investment. On the other hand, if you’re eagerly looking for a home, RFOs are move-in ready. You just need to sort out some paperwork, and then you can start settling in.  

Federal Land offers a wide variety of strategically located, top-quality properties in the Philippines. Whether your condo goals are for investment or personal use, Federal Land properties have high investment potential, sustainable living spaces, and modern amenities. Look for your ideal condo and talk to our team of real estate experts today! 

Learn more about Federal Land’s RFO units today.