Buying Land Or A House

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Posted

What is the best way to go about this , walking around the district where you think you would like to be,

Or are there estate agents who you can go to there places, the word and mouth way,

And which to all you who have done this is the right way

I am always looking on the internet at places and some may have been for sale for years or has been sold years ago, plus the prices too have all gone up ,

So i know what many will say , boots on the ground stuff, but are there other ways too.

 

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Posted

This was posted on the forum back in July I cant remember by whom.Hope this will help Steve.

 

 

I just wanted to share this in case it is of use or interest to any other members as I've just been through the process. If anyone has any questions let me know.

Having just been through the process of buying and renovating a property in the Philippines I thought I would post my experiences here (and the lessons I learned) in case they may be of use to another expat who is going through the same process.
After spending many months (and talking to many middlemen) we finally found a property with a clean title that suited our needs. It has two buildings on it, one two story place with a store and an apartment and one three bedroom bungalow set on 266 SQM about 2kms back from the beach. Both were in need of some “TLC” (we had to gut and completely renovate the bungalow) but the price was very much right.  The owner was in a position where they had to sell due to financial issues and we got them for 1.6 million peso instead of the original 3 million peso asking price. Let me say that this was not a case of good luck, we must have viewed at least 50 properties in the area before we settled on this one.

That left enough in the kitty to do whatever renovations were required. The renovation included new glass for all the windows, knocking down walls, replacing large parts of the roof and a comprehensive paint job as well as installing a full western style kitchen and re-tiling the whole place. We also replaced all the plumbing fixtures.  Initially I was dealing with a local guy who works for me (he is our family driver and all-rounder). A great guy but the people he found were a nightmare (15 minutes to grout one tile unless I was standing over their shoulder).

I called in a friend of mine from Baguio who was in the construction industry in the US and he came down and project managed the renovation for me. He was here for a week, cost me 5,000 pesos (and about 5,000 Pale Pilsens) and saved me close to 50,000 had they kept moving at the same rate they had been.

If you have access to someone you trust (especially if they’re a foreigner) it’s worth the money to have them provide some oversight. I’m a computer programmer by trade who has basically never laid a tile or anything like that. His help made a huge difference and he cost me far less than he saved me.

I’ve gotten a little ahead of myself here. Before you get to the renovating process you’ve got to buy the thing. This can be a very complex process in the Philippines. Keep away from Tax Declaration property, buy something titled if you can. Also I made the decision to hire a lawyer to take care of everything for me, again I saw spending 15,000 pesos on his services as no major when I was looking at the level of investment I was looking at. There are plenty of people who will suggest you do it all yourself and that it’s easy enough. Let’s put it this way, as I read recently in a forum. “Property fraud is just about a national pass time in the Philippines”. If you’re planning on spending a couple million peso and you’re not prepared to spend 15k on a lawyer then to my mind you’re extremely clever with your pennies but very dumb with your pounds!

Not all titled property is created equal, you’ve got to make sure that you get a certified true copy of the document from the register of deeds.  If there is a lien on the property you’ll inherit it with the title. In our case there was an open lien on it (the title documents had been lost and reissued in 2008 so there is a notation on the title stating that anyone who wishes to lay claim to a lien can do so). I had this removed. We then purchased the property in my girlfriend’s 
name and had a lien in my name annotated on the title. The reasoning behind this was that an annotated lien takes precedence over any older claimaints that are not annotated.  This also means that she can’t sell the property without my approval.

Anyway, back to the renovation.  We’re just in the final stages now of finishing up the bungalow (basically housekeeping stuff). To strip, gut and pretty much rebuild the thing has cost me about half a million in materials and labor.  That also included about 150k in appliances.

I could have saved a lot of money if I’d gone for cheaper materials but for me renovation is more about longevity that it is about economy.

The final outcome? We’ve separated the two properties onto separate titles and already have an offer on just the bungalow at 3.2 mil. The two story blue building is being taken up another two levels and will contain a store plus three apartments above it which we will rent out then go and repeat what we've just done with another run down property.

I wanted to post this because so often expats post horror stories about investing in the Philippines and also a lot of people (who usually have no experience of the process) posting negative comments about bringing money in here. I will say that it was all money I was prepared to lose and I wouldn’t suggest anyone does anything here unless it’s on that basis. That said, you can do it and do it well and make a little money if you do it right.

If anyone who is about to go through the process has any questions about potential fish hooks I’ll help as much as I can. I’m not saying I’m an expert but I’ll help if I can as I’ve just been through it.

If there is any interest I can post some photos of the property so you can see what we did with it. to title (one of the reasons I said to stay away from TD). If you take a Tax Dec property and buy it, then put it onto a new title that title can still be called into question by pretty much anyone. There are many cases of multiple people paying the BIR taxes on a particular piece of Tax Dec land then selling it to aI wasn't comfortable with buying newly foreclosed for the exact reason you highlight. Another important thing that I forgot to mention in my post relates to Tax Dec property that you plan to title (one of the reasons I said to stay away from TD). If you take a Tax Dec property and buy it, then put it onto a new title that title can still be called into question by pretty much anyone. There are many cases of multiple people paying the BIR taxes on a particular piece of Tax Dec land then selling it to an unwitting buyer. When these cases come to
court the buyer *usually* wins in the end but the costs of the court case and the time involved make it pretty risky.

For our next purchase we're probably going to buy a lot and build on it. Once again though, I'll make sure we're not the first holders of the title.  I was offered a foreclosed property when we were looking for this one. 5000 SQM of land with a basic local style house on it for less than a million. I reminded myself of two old adages. "That which is too good to be true usually is" and "a fool and his money are soon parted". When we're looking at prices of upward of 5000 pesos per sqm in most of this area I figured it wasn't worth the risk.I wasn't comfortable with buying newly foreclosed for the exact reason you highlight. Another important thing that I forgot to mention in my post relates to Tax Dec property that you plann unwitting buyer. When these cases come to court the buyer *usually* wins in the end but the costs of the court case and the time involved make it pretty risky.

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Posted

 Just one more thing Steve, now i have thought about it, make sure you ask if it is Agricultural or Domestic land. If Ag land has it got a waiver?

You can get one anyway if needed from DAR (Department of Agricultural Reform) there is a lot to do but done right it is not that hard. most you can do by yourself thus Cutting the lawyers fee and getting the truth, not what they think you want to hear.

 

Jack :)

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Posted

And think of HOW you want the owning to be.

(I don't like to put WHOLE in gfs/wifes name, because that make it unnecesary easy for her to just take it. I think owning the house and a long time lease of the TITLED land is simplest.)

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I think owning the house and a long time lease of the TITLED land is simplest.)

 

 

 Thomas, Steve is married so he can't lease from his wife  or will they change that Law just to suit you 

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I think owning the house and a long time lease of the TITLED land is simplest.)

 

Thomas, Steve is married so he can't lease from his wife  or will they change that Law just to suit you 

Who said it has to be from his wife??       :)

(I have written different types of LEGAL alternatives, including how some control of the LAND can be got too having it as collateral for a loan.)

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We do a lot of searching on the Internet and have spent a few days looking (with and without agents) when we were in PI. Like mall shopping it's fun for my wife. 

 

I would say that the internet shopping is nice to give you a general idea; a lay of the land so to speak. You can see what types of homes might be available in what types of cities, towns, neighborhoods. I would expect that on the Internet many of the prices will be inflated, sometimes quite inflated.

 

Nothing works like your home country, whether it is price, titling, dealing with the owner, etc. For example in the US it is rare to ever deal with (or even see) the owner. That's the purpose of the agent/broker. In the Philippines almost every property we saw, we met or even negotiated with the owner, even if an agent was there.

 

Price can be flexible. Even on the Internet many of the listings will say "price negotiable." I suppose it's like everything else in life; the price is based on what the seller is willing to take and buyer willing to pay. I saw many properties whose prices dropped by a large % (a third for example). I'm sure some sellers are more firm, but many aren't.

 

For example a year or so ago we saw a house we like (the wife loved). We were just having fun and not ready to buy yet and told the seller so. Nonetheless every say I got a text from the seller asking if we wanted to see the house again. Finally it was the morning we were leaving and I got a text. I was annoyed. My wife just told me to offer them a lowball amount and they would stop bothering me. I sent the seller a text saying "My wife is in charge of our budget and she says the maximum we can pay is X." That'll stop the texts, I thought. You guess it. Five minutes later I got a text back accepting our offer :) Well we didn't buy but it is an example of how different it is in the Philippines.

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Steve For me it IS Boots on the Ground, I would stay well away from Internet sales and beware any Agents.

You have really answered your own Question, Think where you would like to live. walk the Area, that way you will see who is going to be your neighbour, Go at Different times of day Night time too as this is when you can hear the noise and How the Area is at Night. Check out all the nitty gritties like a local Shop, Service Station Handy. Is there a medical Centre ( Most Baragays have them) Ask about previous, current owners of lots. Many buy but don't build. Cash Flow normally.

No point asking prices untill you speak to the owner, as they all know and will add their little Bit and charge the seller for the help they give.

Word of Mouth can come from Family and Friends you make but as always Steve "Buyer Beware"

 

As you walk Areas you will see signs Lot for sale Usually saying Direct to Buyer only, Ask at the local Shop, do you know of Any lots for sale.

 

Steve this is me, We bought our lot from a Friend of the family and it was straight Forwarcd but Azon is in the know, So when we said we liked it, we got all the details and went about making sure things were in order. Visiting City Hall for Title, BIR to make sure all taxes were paid up. What ever you do, Don't hand any money over until you are sure of everything mate.

If and when you make a decision, get a Copy of the Current title Deed, this can be compared with the one in force at City Hall.

 

Steve, When Viewing always ask about Right of way. For me choose your own Legal Advice not the Sellers.

 

Here when and if We can help you any more my friend. 

 

Jack :thumbsup:

Steve it's a mine field out there. This brief post of Jacks sums up the most important points and I would print it and follow.

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Posted

I bought a plot in October and have done exactly has Jack has recommended in his post. Do all things properly and pay all your taxes and it will be fine. We bought agricultural land but had it legally changed for domestic usage. One thing I will say is, do all the paperwork and pay the BIR etc before you develop, it will save you a fortune. Once you develop, even if just a wall/fence the taxes will rise accordingly.

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