Buying Tips

“Do you have a list of Pag-IBIG foreclosed properties in Cavite area? Please send me a copy. I’m interested to buy.”

That was from an email we received a long time ago from one of the website visitor. Our usual response to such kind of query is to refer them to the Pag-IBIG Branch in-charge of the area. That is the best way to get an updated list of the recent foreclosed properties in a particular city or town.

Of course, there is an online version which you can find by going to this link:

http://www.pagibigfund.gov.ph/AA/default.aspx

Select from the series of drop-down lists provided on that page the areas on which you are interested to buy. Remember that the search result may not always reflect an updated list of foreclosed properties, but this is a good start. You can always verify by calling or visiting the branch.

Foreclosure Sale in Davao City

This article is especially good news to Davao-based Pag-IBIG Fund Members or those who are planning to buy foreclosed properties in Davao City area. The Pag-IBIG Fund Branch in Davao City will be conducting a foreclosure sale by way of public bidding which will be held on April 18, 2012.

If you are not from Davao, this article should give you an idea about the whole process of buying a foreclosed property by bidding on it. Listed below are the set guidelines to make the whole bidding process smooth.

How To Buy or Bid on Pag-IBIG Foreclosed Real Properties

1. Interested buyers are reminded to conduct an investigation and ocular inspection of the properties to determine their actual condition before scheduling bidding.

2. Bidders are required to secure copies of:

1. instructions to bidders, and
2. BID FORM from this Department:

Acquired Assets Management and Disposition Unit,
HDMF Davao Branch,
2nd Floor, Pryce Tower Condominium,
Pryce Business Park, J.P. Laurel Avenue, Davao City

3. Each bid shall be submitted in triplicate copies placed in a properly sealed enveloped and addressed to the HDMF Davao Branch Committee on Disposition of Acquired Assets at 9:00 AM on April 18, 2012 at this address:

HDMF Training Room,
3rd Floor, Pryce Tower Condominium,
Pryce Business Park, J.P. Laurel Avenue, Davao City

immediately after which, the said bids shall be opened in the presence of attending bidders.

4. All occupants of the foregoing acquired residential properties shall be given until March 29, 2012 to formalize their offer and shall comply all the requirements not later than April 10, 2012 otherwise, the property they are occupying will be included in the bidding. Occupants may purchase the unit through cash or housing loan:

1. Provided that back-rentals have been settled and
2. Provided further that in case of purchase of the subject property through housing loan, the eligibility requirements under the existing housing loan guidelines are met as supported by the Membership Status Verification Slip.

5. Each bid must be accompanied by a Pag-IBIG Fund Receipt (PFR) original copy reflecting payment of the required five percent (5%) minimum deposit computed based on the selling price. Such deposit shall form part of the winning bidder’s down payment or shall be returned to the non-winning bidder without interest upon the completion of the public bidding.

The following articles may also be helpful to you:

• Foreclosure Properties — To Buy Or Not To Buy? (Part 1)
• Foreclosure Properties — To Buy Or Not To Buy? (Part 2)
• Pag-IBIG Housing Loan Restructuring

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“How To Bid On Foreclosed Real Estate” is written by Carlos Velasco.

This is the second of a two-part article series on Pag-IBIG Foreclosure. Here we’ll talk about why foreclosure happens and some useful tips on buying foreclosure properties, more specifically, Pag-IBIG foreclosed properties.

(In case you missed Part 1, follow this link.)

Why Foreclosure Happens?

There are endless reasons why foreclosures occur, but basically they all boil down to the following categories.

1. Property Problems. This is perhaps the biggest reason why Pag-IBIG Foreclosures abound. We all know that a lot of Pag-IBIG accredited projects are low cost (read: low-budget) and this leads the developers to resorting to all kinds of dirty tricks just to recover the cost of doing the project.

In Pag-IBIG Subdivisions with high foreclosure rate, it is not uncommon to see the following:

1. Half-cemented road. You may think they are leave the other half for the next election, but the reality it, the politicians have nothing to do with the project.
2. Weak structures, sub-standard materials. Houses whose walls are not supported by cables or back doors that are so easy to break any grade school level Karate Kid can do it.
3. Flooded area. These happen to projects done by fly-by-night developers, the kind of developers who should not be developing subdivisions in the first place.

The list could go on.

Can you blame the buyers if suddenly they stop paying the amortizations and allow the foreclosure clock to just tick? These are reasons enough not to buy in these places even if you see a good deal.

2. Personal Reasons. People change. Their situations also change. From changing careers to migrating to another country and all else in between, some of life events could drastically affect one’s decision on whether to continue with the property or just let it go.

3. Financial Problems . The money matters no one dares to talk about… until it’s too late.

1. Disease — We Filipinos are so used to the familiar phrase, “Bawal magkasakit.” It doesn’t require a rocket scientist to figure out that getting sick and being hospitalized for a longer time is really expensive.
2. Death – If disease is already expensive, death is even more so.
3. Divorce – Good news: We don’t have divorce here in the Philippines. Bad news: We do have our own strange ways of breaking up a relationship (which should not be made in the first place). Yes, we do break up only after several black eyes are already obvious. Funny huh? Wait until you see what happens to the couple’s real property, which by the way is considered conjugal property

As you can see there are many things and events that could possibly lead to a foreclosure. Therein also lies the problems and opportunities of foreclosure properties.

To Buy Or Not To Buy?

Unfortunately, there is no single best answer. If you know what you are doing and you get lucky enough in choosing a foreclosure property to buy, then good for you. One of the factors foreclosure properties are drawing a lot of interests from buyers, investors and speculators is that their prices appear so very cheap.

However, don’t be misled by the cheap price tag that comes with the property. That Foreclosure property you’re eyeing to buy may contain a bag full of tricks that may not be obvious at first. Always do your homework when considering foreclosure properties.

The following tips should serve as your handy and useful guide when buying a foreclosure.

1. Uncover the reason of the foreclosure. If possible, meet the owner during the pre-foreclosure stage. You may not get an honest reply, but there are a lot of things you will discover during the conversation.
2. Get the numbers and do the math. How much is the outstanding balance? What is the monthly amortization? How much was paid so far? What is the selling price? It should be negotiable.
3. Take a look at the property. Get a second look. Then finally, a third look. Never rely on the map, or the photos or the descriptions of the property. In other words, don’t trust what you are seeing unless it is the property itself. Do some leg work. This process alone is already a potential source of stress, but you have to be aware that this is part of the cheap price you are paying. One of the disadvantages of foreclosure homes is that it is very difficult to inspect what’s inside the house especially if there are still occupants living in the house.

And most importantly, don’t do it alone. Always have a competent lawyer by your side to help you along the way.

“Part 2 of Foreclosure Properties — To Buy Or Not To Buy?“ is written by Carlos Velasco.

In one of the past articles posted on this website, I warned first time Pag-IBIG Home buyers to avoid buying foreclosure properties or even those which are for assume. I reasoned that many of these properties are so problematic to the point of being useless.

Well, they are not really useless if you know what you are doing and you want to take on a little challenge in the hope of reaping the rewards that lie ahead.

Caution:The above paragraph is only for savvy real estate investors. If you are a first time buyer, I still maintain that you should avoid it altogether. When buying your first home, you should treat the whole process as though you have limited financial resources and that you have to make sure you won’t regret doing so later on. As I’ve said many of these properties are inherently problematic that they’re not even worth checking.

This article is an attempt to elaborate on that point a little further.

Recently, we received a letter from one of the website visitors stating her problem with the foreclosure property she bought at Pag-IBIG. I want to share with the readers of this website a portion of that letter to illustrate the most common problem encountered by buyers who have bought Pag-IBIG foreclosed units. Please take note that I have intentionally removed the name and places mentioned in the original letter to keep her privacy protected.

Here goes…

…I’ve been a member of the Fund for almost 16 years now. In 2007, I purchased a foreclosed property in [place not mentioned]. We paid it in cash. To my aghast, the previous occupant refuses to leave the property despite several notices from your office [Pag-IBIG Branch not mentioned] to vacate the property. Your office here advises us to file a case against the previous occupant which we eagerly do so believing it will only be a couple of months and the property will be turn over to us. But until this day, we haven’t taken a hold of the house we legally bought at your office. We knew before paying the unit that Pag-Ibig will not participate in “driving out” whoever is occupying the house. Only that, justice is so slow paced. The counsel of the previous occupant believes that house conflicts of this kind should be settled first with the HLURB and that whatever is the decision of the RTC is immaterial. He cited the MAgna Carta for Homeowners. Natatakot po kami ng husband baka po matalo kami paano na po ung binayad namin sa pag-ibig. Malaki na po ang nagastos namin sa kasong ito. Sobra pa sa binayad namin sa pag-ibig.

The title is already transferred in our name as well as the tax declaration.

What is our chance of winning the case? May case ba na gaya sa amin na nanalo ang buyer ng foreclosed property nyo? …Thank you.

I don’t how you feel after reading that one, but the first time I read it, I already felt sorry for the buyer. Of course, I read it for several times more making sure that I understood the real problem the letter sender is facing.

It is very unfortunate that cases such as these are not readily available in the mainstream media. It maybe because it’s very shameful being victimized this way. Adding insult to the injury, the Pag-IBIG Fund can’t even assist buyers in successfully handling the case.

This is the first part of the series of articles on Pag-IBIG Foreclosure Properties. In the next article, I’ll show you some tips and traps of buying foreclosure properties from the Pag-IBIG Fund.

Update: Part 2 is now ready. Please read it here.

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Foreclosure Properties — To Buy Or Not To Buy? is written by Carlos Velasco