Author Topic: Buying a Condo? Top 10 Real Estate Tips to avoid a Nightmare  (Read 1394 times)

Offline hytek02

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Buying a Condo? Top 10 Real Estate Tips to avoid a Nightmare
« on: August 20, 2016, 09:17:08 AM »
Condos are very popular forms of investments by many  foreigners, OFW and locals. Some people buy for themselves while others buy Condos as an investment to resell. I made many mistakes in the past and want to pass down these tips to everyone in this forum.  I am a Filipino American that has been travelling to the Philippines and abroad for more then 20 years. Ive lived in the Philippines for more then 5 years and currently reside in the US and Japan. I own real estate in the US and Philippines. Before considering any property, one must verify the following checklist to minimize your risk.

1. Don't blindly sign the purchase documents.   Secure a Real Estate attorney to review the title, warranty and legal contract.  Most contracts are slanted in favor of the builder.  There is no such thing as a standard contract. Have all your contracts reviewed by your Attorney, Real Estate Agent, Trusted friend and make sure you don't overlook anything.  Ayala is one of the biggest developers. They tend to have more expensive units, but the quality is better.  Don't take my word for it. Do your own research and comparison.

2. Warranty is NOT Standard.  Every unit, Every Building and every contract is not consistent. Do not trust the agents statements about warranty. Make sure its on paper. As far as im concern, all properties whether new or old are AS-IS. Make sure its documented on paper.  Take photos before, during and after you take possession of your unit. Review the Warranty documents very carefully. They may not show you the Warranty documents until the final signing.  Make sure you get a copy before hand to discuss with multiple real estate Agents and Real Estate Attorney.  Highlight anything that looks suspicious. It may come back to bite you later on.

3. Most Condo Sales Agents are between the ages of 18 to 25 and are clueless about the property they are selling.  Don't let their cuteness cloud your judgement.  They have never lived in a condo and don't understand the ROI of a property. They can only provide their personal opinion.  It is better to acquire the services of an experienced  license broker.

4. The Sales price and Property value of a unit is made up by a group of developers.  Its a superficial value. The market price of real estate is based on supply and demand. However, developers  work indirectly together to create a superficial price.   Here is a analogy. if the market price of a 2016 BMW Sedan Vehicle is 2 million and you drop your price to 1.5 Million or even 1.2 Million, There's a good chance you can sell it in a short period of time.  However, if you have a properly listed at 20 Million and you drop the price to 15 Million. It can still take years to sell it.

The property value of your unit may even go down if a better development is built near your unit and there is more supply then demand.   When you buy your unit, it may be the only development in the area.  Imagine what happens if another development builds 1000 more units in the area.  Do your research and hire a broker to do some research. The cute 19 year old Agent won't know this information.   Find a license broker who owns a small real estate firm in their 30s to 50s. Check their credentials.

5. Redundancy is important.  Make sure you use a minimum of 2 Real Estate Agents to verify your documents.  Use an attorney that has experience in Real Estate Law and has handled legal cases related to Real Estate. Most attorneys all type of law. Choose one that has a strong Real Estate Background.  For example, when asking for directions in the Philippines, most people realize you have to ask 3 times to 3 different people to cross check the information.  You want to make sure the information you acquire is accurate. You must do the same with Real Estate Agents.

6. The Best Deals are actually 2nd hand properties or Prepurchase properties that drop out.  For example. Someone may have committed to buy a prepurchase property at 2.5 Million several years ago.  Its been 2 years later and the value of the property is now 3.5 Million.  You can buy them out of their 2.5 Million and get the acquisition price.   If that person is desperate, you can buy it even lower (2 Million). Furnish the inside using affordable  native furnishings that look classy. Sell it for 3.9 million while your renting it out via Air B&B.

Another option is to buy a distressed sale or urgent sale.  Someone may have to leave the Philippines or simply cannot afford to keep their property.  This is where you can get a good price on real estate.  However, there is also a risk.  They may be selling because of a problem with the unit, location or building. Make sure you do some research.

7.  Location, Location, Location is key. However, its not enough to be in a good location.  Its also important to have good neighbors.  You might have a neighbor that burns their garbage every week and the smoke happens to blow into your home.   Another scenario is a noisy band that practices in a back alley that is very close to your unit.  Location, Orientation and position are also important.

8.  Title information. Is located in Manila.  When buying property, make sure the title is correct.  There are situations where the title information in a given region like cebu, palawan or other rural area will NOT match what is recorded in the Central Real Estate Database in Manila. No matter how authentic a document can look. Make sure the title is authentic by verifying this document in Manila.  You don't want to find out that you gave your money to someone that does not even have the real title. 

When I signed to purchase my very first condo unit in Makati, I found out that the builder did not have the authorization to sell my unit because they had not gotten the authorization documents by the land authorization.

9. Security is one of the main reasons people buy Condos.  Don't forget to walk around the outskirts of the development and verify the activities outside.   Check out the property in the day, evening and early morning to make sure its a safe area.   The philippines is well known for squater communities.  Buy into a development that is part of a master plan.

10. Document Everything. Compile all your documents and make lots of copies. Research all your findings and put them on paper.  If you are able to take photos during construction, take as many as you can.  Document the name of the contractor, subcontractor, builder, License #, Permit and everything you can.  Prepare your documents as if you are going to court in a few years.  Treat this as a security insurance plan. 

These 10 tips are based on my experience from buying properties in the Philippines in 2009. It was a painful experience that nobody else should experience.  Feel free to contribute your own experiences. This post may seem pessimistic, but its really meant to keep you from making a bad decision. Real Estate Legal Cases can take 5 to 10 years in the court system. Make sure you do Tons of research. I can share more details if you have detailed questions.  I hope your Real Estate Purchase is a very Positive and Profitable one.  Regards ~Herman.


Edited to remove links Admin bigrod
« Last Edit: August 20, 2016, 10:32:16 AM by bigrod »

Offline ryanmaryland

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Re: Buying a Condo? Top 10 Real Estate Tips to avoid a Nightmare
« Reply #1 on: November 25, 2016, 01:54:24 PM »
Thanks @hytek02 for this. I was actually looking for a place to stay in manila. Thanks! Best!
« Last Edit: November 25, 2016, 04:26:47 PM by bigrod »

Offline Mentalist

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Re: Buying a Condo? Top 10 Real Estate Tips to avoid a Nightmare
« Reply #2 on: May 03, 2017, 06:44:45 PM »
great read! thank you for sharing this one. it makes deciding for the condo a whole lot easier for me.

 


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