Follow the ‘DREAM’ to avoid being scammed

Recently, we have been receiving numerous reports about the increasing number of real estate-related illegal transactions by scoundrels—filching hard-earned money or lifetime savings from unsuspecting homebuyers. This happens when homebuyers do not know how to identify authentic brokers or salespersons, and fail to look for mandatory permits and licenses given to all real estate projects.

While the Department of Human Settlements and Urban Development (DHSUD) has been proactive in protecting and campaigning for the rights of real estate buyers as discussed in my previous column, the first, and perhaps, the most important step in detecting unscrupulous scammers in the industry is to arm homebuyers with knowledge on what to do before entering into any real estate transaction.

Here are some practical tips to guide and protect real estate buyers, especially the overseas Filipino workers (OFWs), from falling victims to bogus projects and fly-by-night developers, brokers and agents. Simply follow this acronym DREAM—which stands for Demand, Read, Ensure and Engage, Ask and Move—as a checklist to closely scrutinize a prospective property.

Demand

Before transacting, seek legal documents from real estate developers, their brokers or agents. Ask for, in particular, their Certificate of Registration (CR) and License to Sell (LS), which are both issued by the DHSUD. Such documents indicate that the housing project is legal and will be constructed in accordance with national housing standards. All subdivision and condominium projects need to secure CR and LS from the department before the owners or developers can start advertising and selling units to the public.

Sales materials or paraphernalia such as brochures or flyers, billboards and other advertisements must reflect the project’s name and location; the LS number issued specifically for the project, and the advertisement approval number.

If any of these three details is missing in an advertisement material, a prospective buyer should be alerted on the legality of the transaction. Check and confirm first with our DHSUD regional offices to ensure the property being sold is properly registered. May I reiterate that advertising and selling a housing project without a corresponding CR and LS are violations of our housing rules and regulations.

Read

Take time to read, study and understand every provision in real estate documents like Contract to Sell and Terms of Payment, which are usually presented to homebuyers upon initial payment. It is highly crucial to understand every single entry in these contracts to avoid misunderstanding later on, especially with regards to the payment scheme.

Also, allot time to read the CR and LS of the project. Subdivision projects are classified as open market, economic housing, socialized housing, low cost or medium cost; or whether it is a lot only or a house-and-lot unit. There is a maximum selling price depending on the classification of the subdivision project.

Ensure and engage

Make sure that you transact only with legitimate real estate developers, brokers and salespersons. Brokers and salespersons are mandated to secure licenses from the DHSUD. It is required by law that real estate dealers or companies, brokers or salespersons be registered with DHSUD to prevent proliferation of fly-by-night developers and unscrupulous brokers and agents. Avoid dealing with unregistered brokers or salespersons. Check with DHSUD regional offices for the list of accredited brokers and agents.

After establishing the legitimacy of the developer, broker and agent, engage them to know everything about the housing project, unit or lots that you are interested in.

Ask

Do not hesitate to ask questions that you have in mind. As buyers, you have the right to ask and seek answers from your brokers and salespersons especially with regards to the Contract to Sell and the Terms of Payment. By signing these agreements, buyers bind themselves to all provisions of the contract with the developer, broker or agent.

Ask them about anything—from the materials used in the construction to the history on how the property was acquired by the developer. Having such information will help you lead to a sound decision. After asking, use social media to investigate and countercheck. Most subdivision projects use social media in advertising so browse over the reviews and comments posted by the public to determine the credibility and standing of the company.

Move

Visit and inspect the actual sites and investigate the neighborhood. By doing all these, you will ascertain the existence of the project and have a feel of the area as to whether the place is suited for you and your family. Don’t just rely on the salespersons’ information regarding the details of a real estate project—remember, their job is to sell the project. Bear in mind that you are investing a huge amount of money on your dream home so it pays to be careful and to do your own due diligence.

By following the “DREAM,” homebuyers can easily identify illegal projects, unscrupulous developers and salespersons. As the saying goes, “an ounce of prevention is worth a pound of cure.” Don’t allow your dream house to become a nightmare.

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This October, we are observing the National Shelter Month with the theme “Ensuring resilient homes and sustainable communities for a better normal.” We have lined up various activities—mostly online-based due to the continuing community quarantine—to inform and educate the general public about the relevance of the celebration to the housing sector.This year’s celebration is especially poignant. As we spend more time in homes as an effect of the extended quarantine, we now see the necessity of having safe and resilient shelters and sustainable communities which serve as havens against natural and health hazards. We will take this month as an opportunity to strive harder in performing our mandate of providing decent, affordable, resilient homes and sustainable communities to 81 percent of Filipino families who continue to dream of having houses of their own.