Buying a house in the Philippines and its risks

derelict house

Sometimes you will probably wonder why I say “ok” when in a previous article I would say “don’t touch it with a barge pole”. The reason being is that if you ignored the first advice or have other reasons to do something then you have hopefully taken everything into account and I am not going to be the one to interfere. TropicalPenpals is full of advice only from things we have seen, learned, experienced and sometimes just general thoughts.

Now buying a house in the Philippines I am around 30+ years younger than many of the people looking to setup home in the Philippines and have a different view on things. Personally we do want and need a bigger house soon  but at the same time I have had to put business first as its growth will lead to stability and the ability to buy a house we want in a location we want. Rather than rushing in and ending up with something we don’t really like and in a condensed sub-division. Im not attacking sub-division by the way.. well at least not in this article I just wish they would add another 50sqm to create a bit more space between buildings to allow airflow.

So what is this article about? well I am going to write it from things I have seen or know of and it will hopefully keep your eyes and ears open when looking to buy. These are all things I am aware of and have examples of. Most of the examples I can’t post (specifically) because they are in legal cases and could affect any out of court settlements.

Firstly there is a house a bit further south in San Fernando which I visited a friend who had just about had his construction completed and was asking my advice. Which ended up more as “where should I start?” the gates are designed to open outwards yet the road is higher than the house so your locked in. The plumbing just ran out of the house and never went anywhere so soon started back filling into the property (same issue was on another job the same Architect is involved in). The mains board power rating was over and had to be altered. LPG tanks HAVE TO be stored outside and fed into the house to the kitchen appliances by Philippines building codes, this one was sat next to the cooker. Gaps for kitchen units were wrong and have to come out (they are typical made here so its not a case of removing one unit the whole length of wall unit will need to come out). Lintels are missing from all door and window openings which has created pressure which is beginning to cause cracks throughout every opening. Which also puts into question the re-bars in the hollow block as well as the risk of the roof spaying out and dropping.

All in all the house is worth less than 1/3rd of its investment and may need underpinning aswell as it appears no foundations were installed either. The materials were the cheapest the Architect could find and also all the work is sub-standard. This is why its important in engaging in projects you

A. Pay in phases on completion and control the money

B. You need an engineer as well as architect not rely on an architect as the plans hadn’t even been signed off by the city engineer which could cause even more problems than the above.

C. Don’t trust anyone, may sound severe but I have been burned that way as well simply because people see it as “YOUR MONEY” so really couldn’t care less if it goes well over budget.

The next involves a neighbour who is married to a Japanese guy (haven’t met him) they bought a good lot in Naga and started construction. As it neared completion the real owner approached them as the person who sold it to them wasn’t legally entitled to sell it. Make sure all your papers are in order and things like taxes are upto day. Check the tax declarations as its a good sign of who owns it but also look for a Clear title. Get a good lawyer involved before the purchase and get the papers checked. Yes it could cost you a bit extra but what is worse that or finding out the house you just built isn’t on your land and your either going to have to demolish or pay off the real owner?

Third is realtors playing thieving games its very common and how you as a buyer pay more and as a seller you get less. An Australian in Minglanilla has just spent over a year trying to sell his house because the realtor stuck P500,000 onto the sale price which inflated it above its sales value and only by direct selling himself was he able to offload the property (offload not in a bad term but simply the difficulty in selling it down to bad real estate agents). Then there is another friend of mine who firstly found a realtor stuck P1million on his house which is why it didn’t sell for 2 years and then when a sale did come along it was wanted with discount and to pay the last P600,000 in cheques. Now knowing how quickly people can disappear here if a realtor approached me with that deal I would look at it this way :-

I sell to realtor still owed P600,000 realtor already has a buyer with the P600,000 on it he then sells the property and pockets the P600,000 before disappearing as the named person on the cheques isn’t the realtor no doubt the realtor would split the money judging by greed levels at least 40/60 split in their favour and your P600,000 out of pocket there is a new owner of the property but not the one who owes you the debt so then your chasing around trying to find who stole your money. Realtors generally don’t seem to see their practices as morally wrong or even theft but simply normal business so advise caution when dealing with any of them. I have had it myself where at least P500,000 was added to a house I was looking at compared to what a local seaman was offered just because I am white. Same people were supposed to be friends. Generally I don’t trust anyone regardless of where from and will double check everything which is probably why I have survived so far as I know many others who are no longer here and most are down to trust issues where people robbed them blind.

How to avoid the problems above are down to being here and questioning everything as well as if it looks too good to be true someone is ripping you off as generally things work the opposite here people inflate everything so if its cheap its probably not theirs to be selling.


2 comments for “Buying a house in the Philippines and its risks

  1. Tropicalpenpals
    July 25, 2010 at 2:57 am

    They are written on the fly in the internet cafe as I am working here and doing conversations at the same time..

  2. July 25, 2010 at 2:53 am

    Hey Matt, good advise here… I really like the idea of sharing your own insights on buying a house here in the Philippines. It would definitely help not just the locales, but also those foreigners interested of living on this country.

    OT: Don't take this the wrong way. The way you write your blog, sometimes it confuses me. What I mean is, the writing structure. I'm not an expert on writing, but I think there's a need of proper use of punctuations so that your point is easier to understand. Are you proofreading every blog post you published?