Filipinos value home ownership, we aspire to have our own decent homes and properties someday, and we see investing in a house or a real estate property, precisely as that, a sound investment. Five years ago when I first published two articles (based on personal experience) on title transfer and annotation, I did not expect that it will be such a big hit in terms of most read (thousands) and most commented on (hundreds).
What drove me back then to write those in the first place is because of the lack of materials in the internet explaining such, especially for newbies like me, who will process his documents on his own. Fast forward to 5 years, presumably we already have more materials in the internet to enlighten us, and yet I’m still bombarded with many inquiries and unique cases on their real estate dilemmas. I’m not complaining, I’m trying my best to answer your queries (even if I’m not licensed broker or lawyer, just someone sharing my limited experiences).
With the volume of inquiries we get, I’m actually very worried that many Filipinos put their hard-earned money in real estate with good intentions but with limited information, which cause them to be inconvenienced, duped, scammed, taken advantaged of or suffer unnecessary headache and stress just to put their properties in proper ownership.
Which made write this piece today. Before you invest in real estate, please don’t do it blindly. Please do so P.R.O.P.E.R.L.Y.
The process in itself is not as simple as we wish it could be, quite tedious for those on a budget to be honest, but it can be done (I did) which is what I previously shared in the following articles:
But still we get countless queries, so I hope Filipinos will consider this P.R.O.P.E.R.L.Y. framework before putting hard earned money into real estate properties.
Getting a real estate property takes time, and it involves an inter-agency process which we tried to outline in previous articles. If you’re lucky enough, you may get the titled property under your name in 2 to 3 month’s time. That’s already being lucky, less bureaucratic red tape. Knowing the rough process already gives you an edge on how the steps will unfold one at a time, where to go, what to prepare. Honestly the government should do a better job educating us on this. There are also a lot of developers out there (companies or individuals), who, admittedly, whether intentionally or not, fall short in educating their buyers and managing expectations. Developers also process documents in batches that’s why it can take them a longer time (like in my case so I decided to go solo). Bank financing and Pag-Ibig financing will have varying policies and processes too.
Know more about the property you’re eyeing, its history of ownership, its location, the neighboring properties, etc. Research and read about the process. Read unique cases, say for foreclosed properties, farms under CLOA, etc. Read first, ask questions later. Research about the seller, whether a developer or a private individual. Ideally, you deal with sellers who also own the property, and who can show you titles of the property you’re eyeing, titles which you can independently verify with ROD. Not just someone claiming to represent someone else. Sometimes in pre-selling, the individual titles are not yet available, but nonetheless, the developers should give you enough comfort level that they can produce the titles and deliver on their promise within a reasonable timeline. Know what the actual documents stand for, what a title is, a tax declaration, real estate tax, BIR forms, transfer, annotation, deed of sale etc. Read and read and read. That’s why you have this site, and there’s Google too.
At the minimum, you will have to deal with BIR for the taxes and fees (Revenue District Offices or RDO), Registry of Deeds (ROD) for the processes involving the actual title transfer and annotation, and the City Hall/ Municipal Hall governing the property for more taxes. Knowing the locations of these offices, which actual windows to approach, and the key persons who can help you are all crucial. Special mention to provincial properties where the ROD is located in another province. Other offices that may matter will be where the developer’s offices are located, Pag-Ibig, the bank where you’ll get the financing, etc. There are also third party service-providers who can help you out in the whole process, but they will cost you extra.
Most issues we encounter revolve on (unfinished) paperwork and (deficient) documentation. Buying from someone who claims to own the property but the title is still named after previous owner. Seller/owner is no longer available, out of the country, deceased, estranged wife etc. In possession of all the requirements (Deed of Sale, original title etc) but not going to ROD to finish the process. Verbal undocumented agreements about a sangla, or buying just a portion of the property with no individual title and mother title is not yet split up. Developer providing falsified documents, or unable to produce the individual titles since mother title is still mortgaged with another party. Loan takeover and assume balance from seller. So on and so forth. Too many complications. If you can, avoid these. Deal with properties with clean titles, whose owners are the ones selling and the ones named in the title.
As much as possible, stay away from transactions with too many layers of undocumented ownership, unfinished filing processes, missing documents etc. If you cannot and you really want that piece of property, then brace yourself. Ensure that all parties involved are still available and amenable to the transaction. Ensure that all documents needed and to be needed will be available. Ensure that you understand the extra steps for these special cases. I’m sure BIR, ROD etc already have headaches for the many complicated queries they get, but still, best to ask them questions. After all, this is your hard-earned money.
There are fees and taxes to be paid, and it could be minimized if the proper steps are complied with. There are also deadlines for paying such, depending on when the deal was done per deed of sale. Ignoring these can cost you bloated penalties for late filing etc. There are fees to be shouldered by borrower, some by the seller so it’s best that these are agreed on and documented at the onset. If there are unsettled fees (e.g. annual real property taxes), best if these could be settled first before the transaction. If it’s an assumption of an existing loan (e.g. with Pag-ibig), don’t just blindly pay the amortization moving forward without informing Pag-ibig that there’s already a new owner. And make sure that the documents transferring ownership to you are complete. You don’t want to be paying someone else’s home loan right? Cover your assess people.
Another usual issue we encounter from readers is unresponsive developers, slow company processes with no updates, those who ignore their clients once the clients have put up precious money for reservations etc. Or those who surprise the buyers with more problems in the middle of the transactions. Check reviews on the developer, its reputation and customer service handling. At this age of social media, it’s easy to find the feedback of previous buyers. Check that the person you’re dealing with is really qualified to sell such property. Some processes might take long because there is an organizational escalation that must be followed. Things take time to be approved in companies. But be sure that they are not neglecting your concerns, and reasons for delay are valid and realistic (mind you, some readers suffered for 3 years chasing their developers).
Can’t stress this enough. Don’t just do or have the paperwork. Finish it. Don’t stop until you’re the legitimate owner of the property you invested in. Don’t stop until you see your name on the title. Don’t settle for verbal agreements, document it, notarize it. Don’t settle for holding all the documents but unfiled, file it with the proper offices, BIR, ROD etc. Some readers have the necessary documents but have already lost contact with the sellers, or worse, dead. What if there are other fees to be paid, taxes in arrears etc, who will shoulder those? Don’t settle for sweet-talking real estate agents, ensure that the developer is licensed, has proper permits, do a site visit, inspect the property you’re eyeing, etc. Owning a property can be expensive in terms of processing and legwork, but I believe residing in a property without legitimate proof to claim it as your own is more costly, in the long run, not just to you, but to your heirs as well. Not just financially, but emotionally too.
After all these, have you readied yourself? Owning a property can be a dream come true but it neither comes easy nor cheap. Nothing worthwhile comes easy anyway. But don’t make it harder than it should be. Don’t enter into complicated or undocumented transactions just because the seller was a sweet talker, or a friend in dire need. Ready yourself financially and emotionally. Be in the know, invest P.R.O.P.E.R.L.Y..
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