8 key things to check before OFWs buy property
(First in a series)
No doubt this time overseas Filipinos are eyeing big-ticket items they would want to give themselves or their loved ones this holiday season. One of these “dream” purchases would most likely be property—whether it’s a lot, or a house and lot, a condominium, or townhouse.
Property analysts and experts, however, are one in saying that purchasing property in the Philippines isn’t as easy, or as fun, as riding a one-horse open sleigh, and there’s the real danger of acquiring a piece of real estate that turns out to be more of a curse than a gift.
So, what should our Pinoy overseas workers watch out for when buying property here? Inquirer Property asked the advice of veteran analysts, and they have come up with eight crucial items.
1 Developers’ track record. Enrique M. Soriano III, Ateneo program director for real estate and senior adviser for Wong+Bernstein Business, stressed that buyers should choose a reputable developer to ensure that investment is safe and they get their money’s worth.
“Aside from the location and concept, reputation and track record especially on the quality, sales administration and post sales or service are critical metrics in selecting the best value, particularly for condominiums,” said Soriano.
Julius Guevara, Colliers International director for Research and Advisory Services, observed that “OFWs home for the holidays are usually unwittingly convinced to invest in a development while they are out shopping with their family in a mall. Before they make that decision and make a reservation, they should check if they can really qualify for a housing loan once the project is completed and they would need to apply for financing. They should keep in mind that the low amortized down payment schemes of developers are much lower compared to the monthly amortization from the bank for the balance, primarily because the developers usually offer zero interest on the down payment. Furthermore, they should look at the track record of the developer, if they do deliver their developments as promised.”
Claro dG Cordero, Jones Lang LaSalle Philippines Inc. associate director and head of research, consulting and valuation, said: “OFs (overseas Filipinos) should conduct extensive due diligence to examine the history of the developments and the developer, in terms of timely delivery of units and titles/legal documents issued to buyers.”
2 Be wary of preselling come-ons. For Monique Pronove, CEO of Pronove Tai International Property Consultants, due diligence is key, especially when considering buying at the preselling level.
“All real estate buyers should always conduct first and foremost detailed due diligence on the developer/seller, followed by studying the property itself. The Asian crisis of 1997-98 should teach investors/buyers a lesson in being discerning from whom they purchase their homes. Start off with those developers who delivered on their promise of a completed structure, amenities, roads (for horizontal housing) within its committed timeframe.”
Pronove added: “It is a known fact in the real estate industry that there are developers who rely on preselling up to 40 percent of their future stock before they start construction to fund their projects. This can open the project to risks of construction delays should there be external shocks like the Asian financial crisis and the global financial crisis of 2008. Therefore, the integrity and financial capacity of the developer should be the first in their checklist.”
She stressed that it is also important to visit the developers’ past projects to ensure that the quality of materials and workmanship is within the buyers’ standard.
3 Inspect common areas. Pronove stressed: “Real estate is a long-term investment that increases over time if the property management is excellent. This is a key component of a successful project. Buyers should be inquisitive and demand to inspect the common areas that are not normally showcased by the agents such as the mechanical rooms, security office, fire exit and stairwells for high-rise developments. For horizontal developments, they should check the upkeep of the public areas such as parks, road maintenance, landscaping and availability of 24/7 security and frequency of garbage disposal. The maintenance or non-maintenance of these areas reflect the quality of the property management team behind it.”
