Real Estate Agent — Pagibig Financing

Some people have a lot of misconceptions about real estate agents in the Philippines and the kind of work that they do. This one is the most common among them: “I don’t want to deal with a real estate agent. It is more expensive to buy from them than straight to the seller.”

Well, actually it is both true and false, depending on the case and the kind of property the agent is selling. Let me explain.

If you are buying a new property from a developer, chances are good that the price is already fixed by the company’s Marketing Department. The real estate agent or broker can’t do anything about the price. He can’t lower the selling price or jack it up higher. Can you just imagine if the developer allows their agents do their own pricing? It would be a disaster since the prices would naturally be different and would therefore confuse the buyer.

The story would be different if the property is owned by an individual investor or seller. Here is a typical scenario if an individual seller would enlist the help of an agent in selling his property:

The seller comes up an amount he wants to pocket for the property. Naturally, this price already includes his profit. Sometimes he would price the property so much more to leave room when the buyer tries to negotiate the deal.
The seller would then say to the agent, “That’s already the NET price. It’s up to you to put your mark-up price. I want to take nothing less than that amount and the buyer will be the one to shoulder all other expenses.”

Questions: If you were the agent, at which price would you sell the property if the owner wants to take a net amount of P2,000,000.00? Would you be so kind to sell it at P 2M also without taking a profit? Or, would you mark it up to compensate for your efforts and marketing expenses? How do you think would other agents come up with their price?

Well, I hope that leaves you with something to think about, whether you are selling or buying a property. Take note that most agents are uncomfortable with marking up the price. They are always afraid that the buyer will discover the seller’s asking price and will try to out-maneuver them from the deal.

Technically, a real estate broker is different from a real estate agent. But for simplicity, here we treat them as the same way and refer to them using the term real estate agent or simply agent.

Again remember that if the property is being sold by a developer, the price is dictated by the company. In other words, it is much comforting (no negotiations, no counter-offers, etc) on your part if you buy from a developer instead of buying from an individual seller.

That said, it is worth mentioning that there are numerous advantages when you work with a competent real estate agent, among them are the following:

An agent saves you time and money looking for a property and the right financing.
A good agent is also updated with the latest in the local property market.
A buyer’s agent can help you negotiate the price.
An experienced agent has a network of other professionals like lawyers, interior designers, home builder, etc.
A good agent can assist you when something goes wrong with the deal, which is very likely to happen.

Who Should Get An Agent?

You already know the advantages of working with a competent real estate agent. It’s true that you can skip the services of an agent and buy direct from the seller, who is either a company of an individual. If you have all the time in the world, or you are confident enough of the whole process, you can do that. But I believe there are people who should be working with an agent to save them from trouble. If you belong to the following groups, I suggest that you really should hire the services of a good agent.

1. First-Time Home Buyers. If this is your first time to buy, don’t ever make a mistake of buying on your own. Buying a property is a complicated transaction which involves a lot of legalities you should be aware of. As much as possible get the help of an expert lawyer. And a competent real estate agent should be able to guide on the intricacies of buying and financing.

2. Relocating Buyers. It would be best if you are thoroughly familiar with the place where you wanted to buy. But for many relocating buyers, this is not always the case. This is where an experienced and long-time real estate professional can help.

3. Overseas Filipinos. The Philippines could seem a little strange if you have been away for a number of years. If you are based abroad, you will need at least two persons when buying a property here in your native country: a trust-worthy representative (usually a relative) and a good real estate agent. We are so low-tech here that a simple transaction is enough to make you lose your temper.

(Related article: Joining the Pag-IBIG Overseas Program.)

4. Busy People. Buying a property is very time consuming and very stressful, too. If you are so busy with work or business, you really should consider getting an agent.

5. Foreigners. We have some ways of doing things here that you may be doing differently at home in your country. Before you go nuts, it would be wise to have a good, competent buyer’s agent on your side to help you explain things.

Also don’t forget to do your part as a buyer of real estate. Use the Internet to conduct your own research of the property that you want to buy. This website alone offers a wealth of information that helps you become an educated buyer. Take time to read the other articles which interest you.

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This article on working with real estate agents is written by Carlos Velasco.

This article is intended for the first-time home buyer who wanted to buy a house using Pag-IBIG Financing.

Maybe you are still single and you already wanted to get a house before getting married. (Well, this was the route that I followed.) Or, maybe you are newly wed and you decided that you want to live separately from your parents. Believe me, there’s no substitute to the feeling that you are living on your own home.

A Pag-IBIG starter home — your first home — may not be the most impressive home in town. That’s okay. Forget about the Joneses. Like your puppy love, don’t ever think that it will become your dream home. Rather, treat it as a nest egg that allows you to slowly build your investment (hedge against inflation) while literally having a roof over your head.

Buying your first home through Pag-IBIG is so easy if you take note of the following tips offered here.

Tip #1: Work With Your Real Estate Professional
By real estate professional, in this context, I’m referring to the real estate broker or agent who is directly selling the house.

House From The Up Movie -- A Nice Starter Home You may think that getting the assistance of a real estate agent will make the property more expensive. Whoever told you that must be very ignorant of the whole process.

Here’s what you should know: The real estate professional can’t change the selling price of the property that is owned by the Developer. That is, they can’t markup the price nor can they offer a discount. The selling price and discounts are completely dictated by the Developer’s Marketing Team and the agent can never, ever change that price.

Using a real estate professional right from the start saves you from a lot of headaches associated with the home purchase. For one, the guy is a good source of information such as the following:

The project
The property
The financing schemes
Special promotions and discounts
The materials used,
The move-in process

And if you are using Pag-IBIG Financing, your real estate agent should be able to help you cut through the bureaucracy in the Office.

Tip #2 : Buy A New House

Avoid foreclosure properties or properties that are for assume. Most of these properties are inherently problematic. You don’t want to find yourself catching someone else’s problem, do you?

Many foreclosed properties are so cheap you are tempted to jump on the deal immediately. Not so fast. This may be one of those cases where cheap could actually turn out to be very expensive due to probable renovations. If renovations are needed, we can point you towards reputable contractors like Art Construction.

As much as possible, make sure you are the first owner. Of course, as time goes, newer homes will become harder to find. If that’s the case, make sure that the Land Title is clean.

Tip #3 : Buy From A Legitimate Real Estate Developer

Never, ever deal with a fly-by-night real estate developer. But the crooks have a way of putting on the mask in such a way that you can’t detect the devil’s intentions. Here’s where common sense becomes a useful tool at your disposal.

At the very least, a legitimate Real Estate Developer:

Has complete Business Permits and Licenses to operate in that line of business.
Issues an Official Receipt from the Bureau of Internal Revenue.

Some good points to keep in mind:

Check the track record of the Developer – especially its past projects.
Make sure they are accredited by the Pag-IBIG Fund. (only if you intend to use Pag-IBIG Loan)
Check the License To Sell and Development Permit – they should have both.

Tip #4 : Make Sure You Have Your Finances In Order

Here’s a handy checklist:

You are currently an active Pag-IBIG member with at least 24 months contributions
Your employment history is impressive
You have enough salary/income to cover the monthly amortization

Tip #5 : Save Enough For The Down Payment

The greatest hurdle most real estates buyer ever faced is coming up with the down payment. Many are surprised when they find they don’t have enough cash to cover the outright cash payment required of them.

The down payment, sometimes called equity, is usually 10% to 30% of the selling price. And almost always, it is to be paid one-time about one month after placing the Reservation Fee. So one of the first problems you should think about is the amount of cash you need to raise for the down payment.

Down Payment Tip: Ask your real estate agent if you can defer the payment of the down payment to, say, 12 months. This should be easier on your pocket.

“5 Great Tips For The First Time Pag-IBIG Home Buyers” is written by Carlos Velasco.