In the Philippines, anybody can sell real estate! Given that there are so many developers and sellers out there looking to put up their properties for sale, it can be quite difficult to do because of all the transactions and money involved.
Acquiring properties ain’t cheap, so when buyers search for their real estate investment, they do their best to ensure that their sellers are reliable and trustworthy.
This is one of the many reasons that we advocate to real estate professionals to become official and licensed brokers.
After the real estate industry has become professionalized and regulated by the government, protocols have been established for public safety and benefit of both buyers and sellers of real estate.
PHILIPPINE RESIDENTIAL REAL ESTATE
Condominiums and homes are the most common form of residential properties sold in the Philippines. The property sector only continues to flourish due to drivers of demand, initiated by different industries and demographics. A trend that has continued on for almost a decade.
The economy has been performing well with the economic growth meeting the proposed range of 6-6.5% for the year 2019 and inflation staying at a controllable rate of 1.3%. With all that said, here are 5 laws on selling condos and homes in the Philippines that you should know about:
Proposed on June 18, 1966, the bill defines what condominiums are, the requirements to build one and monitor any related incidents. This law permits people to co-own land, other than the usual absolute ownership. Furthermore, the units to be purchased are ensured that they will not be acquired through a misleading method.
Furthermore, the provisions include common areas, defining the rights of the condominium owner, whether the unit can be renovated; or re-selling the condo units with a written agreement. Lastly, this law is what allows foreign nationals to acquire units.
Established to regulate the selling of condominiums and to enumerate the corresponding penalties for violations. This gives the buyers the information they need to know about their rights in acquiring real estate, particularly for developers and sellers that may be involved in dishonest practices.
A lot of so-called real estate professionals or sellers may resort to any extensive, even fraudulent means, just so they can land a sale . It could be in the form of false advertisements and spamming your social media or inbox with bogus offers. Responsible seller and developers are expected to market and sell their condominium units using only appropriate promotional content i.e. FACTS!
Buyers can be protected from misleading sellers by filing complaints on their respective selling platforms; or for real estate companies that are registered and licensed to sell, your complaint may be used to revoke that right and help other buyers from avoiding bogus transactions.
Also known as the Maceda Law, this act protects buyers who are paying for their property investment in installments. The seller needs to create a clear contract between them and the buyer about financing the property, that both should have a mutual agreement on.
Whether it’s a studio condominium unit or a 3-bedroom house, the time frame and installment payments should be specified in the agreement for the best interest of both parties. In the event that buyer is no longer able to pay installments, seller has the discretion of cancelling the contract to sell the property after the expiration of the grace period and the buyer has been informed through a cancellation notice.
This bill enumerates the description that every real estate professional is entitled to do and what type of professions there are in the industry. We wrote a full-length blog featuring the RESA Law particularly for agents and brokers, but we believe that it’s worth mentioning again. Like we said, anybody can sell real estate, but what are the chances of choosing a private seller over a professional? When it comes to trust, authority, reliability and credibility the odds are in favor of a real estate agent and broker.
The 1987 Philippine Constitution has reserved the private ownership of land exclusively for Philippine citizens and corporations owned by Philippine nationals. Foreigners are not entirely prohibited from owning land in the country but they have more restrictions such as minority interest in Philippine corporations of up to 40% or being married to a Philippine national allows indirect ownership, given that the property is named under the Filipino spouse.
Unless the foreign national decides to acquire Filipino citizenship, investing in Philippine real estate is not impossible for foreigners they can buy a condominium and house, with the exception of buying land. On the other hand, natural-born Filipino citizens who lost their citizenship may acquire land but with the limitation of 5000 sqm, meanwhile Filipinos with dual citizenships can acquire land as much as any other Filipino citizen can.
STANDARD IN SELLING CONDOS AND HOMES
Most efforts of establishing laws on selling condos and homes have something to do with protecting buyers from being scammed by unreliable and corrupt sellers and developers in every step of their real estate transactions. This doesn’t mean that all sellers are the same, this just means that the relevance of real estate in today’s age have become immense that the law needs to ensure everyone’s safety.
Here’s a summary of the steps that allows real estate properties to be sold and transferred ownership, and avoiding any violations of the law.
- Property Owner (developer) and Real Estate Professional should both sign an agreement on the terms of selling, commission and examining the official documents of the property.
- Property Owner must issue an “Authority to Sell” for the seller to have rights to sell the property on their behalf. This also serves as a bond to ensure that the seller also benefits from the sale.
- Thorough inspection by seller on the property’s market value based on its features, amenities and condition.
- Seller will become in charge of marketing and giving offers for the property. This is where digital marketing efforts for real estate will come in handy (Psst! Head over to our blog archive to learn more)
- Once a buyer shows interest, seller should schedule viewings for the buyer to inspect the property they potentially want to buy for themselves.
- When buyer shows the intention of acquiring the property, they should draft a legal letter or “offer to buy” the property as a declaration of intention to buy. This is when the seller can then disclose further information such as full price breakdown, deposits and period of due diligence, financing methods, etc.
- The owner/seller can then issue a notarized “contract to sell” or “deed of absolute sale” to bind with the buyer once both has agreed to proceed with the selling of the property to the buyer.
- Legal documents should be prepared and secured so the seller can proceed with processing the transfer of ownership to the buyer.
- Once the documents have been processed, the buyer needs to acquire a new tax declaration. Once released, the former owner of the property terminates all their obligations from the property they have sold.
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Technology Evangelist super passionate about helping the industries of eCommerce, SMEs and real estate in the Philippines reach new levels of success.