10 Things To Remember When Buying Real Estate Properties In The Philippines
What is it that makes real estate buying so fascinating? Is it the variety of developers, and Philippines Real Estate properties for sale? It could residential, commercial, agricultural, farm or industrial lots. It's up to you to choose - perhaps your future dream home, an office for the empire you're building or a paradise of a beach lot in one of the 7,100 islands we have here in the Philippines?
However before you buy a real estate property in the Philippines, take note of the 10 things you should know before you start your transaction:
1. Transact business only with a licensed real estate broker who will have the authority to sell, usually provided by the owner of the property. With paramount candor and reliability, a licensed broker will be knowledgeable with the properties which he undertakes to sell. He has a working knowledge of real estate market, market value, land economics, legal provision affecting real estate, , financing practices in real estate transactions, reading ordinary maps and plans, basic features of land and building construction as well as working knowledge of government offices concerned in real estate.
2.Obtain properties from reputable and reliable developers. These developers have honed their skills and expertise in real estate development and with very strong financial support and position. Take a peek at the people behind the company and the properties they’ve built before. This will give you the assurance of a proper, timely and definite turn over as stated in the contract (usually done after you made your payment – if installment, after your last payment)
I was a victim myself when I bought a townhouse in Baguio from an unknown developer. The townhouse sold to me as on installment which I paid in 4 years with zero % interest. Turnover for the property was clearly declared on the contract – within 60 days after completion of last payment. After the property was 70% finished, the developer requested for corporate rehabilitation (they didn’t have any more money to finish construction). Up to this very minute, the case is still pending with no assurance of a turn over to me and the other investors.
3. Location. Look for a property with a good appreciation rate. Avoid flood prone areas or low lying areas lest you want the market value of your property to go down (which happened to a lot of properties in Marikina after the storm Ondoy). A good appreciation rate is 20% per annum – this means the value of your property will double in 5 years time. This is considered a good investment.
4.The value of the property is determined by dividing the net operating income (NOI)by market capitalization rate. Deliberate this aspect when purchasing existing real estate properties. The net operating income is the sum of money you will earn from a property, say by leasing it, less all expenses. The capitalization rate is the net operating income divided by the purchase price of the property.
5. When purchasing big existing properties, it is wise to consult a real estate assessor. Why? Because you need to determine the price of your real estate property and a real estate assessor is your surest bet to review it for you. This will allow you to determine the price at which you can sell your property in the real estate market.
6. Always beware of fake titles. Get aCopy of the Transfer Certificate of Title preferably certified by the Register of Deeds in the municipality where the property is located. Things you should look out for: Valid, without defects. Free from any liens and encumbrances and annotations. Along with the TCT, acquire the lot plan as arranged by a licensed Geodetic Engineer and confirmed by the Department of Natural Resources. Include a copy of the tax declaration as well.
7. Be aware and obtain a copy of the property’s amenities or features. Features such as such as clubhouse with function halls, swimming pool, fitness gym, children playground, badminton and tennis courts, basketball court, and convenience store, wide roads, 24-hr security, reliable electricity and water supply, perimeter fence, shuttle service, proximity to malls, bus stations, and where the properties are located if it is within a subdivision. Would you want to have a church or school inside your village? Some subdivisions or villages place those churches and schools outside for privacy reasons.
8. Transact only with banking and financial institutions of good reputation. If you want to borrow money, this is the only way to go. You would not want to get the services of an unreliable, or perhaps small bank - if you intend to borrow money to finance your purchase of properties. Be sure you get interest rates and the most flexible payment terms.
9. Make an actual site inspection of the property to remove any doubt you may have or get encouraged by the development undertaken in a particular area.
10. Lastly, deal ONLY with a licensed Philippines Real Estate Broker. They have your best interests at heart and have undergone the proper training and licensing in order to deal with such important financial transactions. And here in the Philippines we have Laws on colorum agents so be vigilant.
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