There are a number of lot-only properties for sale in the Philippines, whether advertised through online listings or on-site signages. At times, agents or brokers might be the ones coming to potential buyers to offer them these properties. They usually bring with them a copy of the title or a tax declaration of the said property. In this scenario, what should a buyer do? For people who have enough savings, it might be useful to consider the property and do the necessary due diligence on the lot.
In the Philippines, property values have been increasing over time, which make real estate a great investment vehicle. Still, it is recommended for buyers to take precaution and review documents before going into any sale. By being prudent, it is easier to avoid scams that have victimized unwitting buyers. Below are some questions you can ask yourself as part of your due diligence to determine if a property is worth investing in.
1. Is the property worth considering?
When checking a property or offered a property, it is vital to assess the property’s value. We recommend considering properties that have long term potential instead of properties that don’t have much.
The possibilities for developing a vacant lost are vast. For instance, if you plan to use the lot for business purposes, you must know the zone classification in your area as well as ensure that any establishment built on the lot follows zoning ordinances. If you buy it for residential purposes, you must check the rules and regulations of the developer when building your house. You must also secure construction permits aside from hiring your own team of architects and contractors. If you plan to use the lot for industrial purposes, the property must be near highways, waterways, or railroads and must be easily accessible to workers. The size of the lots, its price, location, and feasibility for development also come into play when evaluating if a property is worth investing in. With these various factors in developing land, it is advisable for buyers to only consider possible developments in their circle of competence.
2. Is the agent trustworthy?
When dealing with real estate, it is vital to work with a trustworthy agent. The need to work with reliable agents cannot be stressed enough. There are just so many stories of scams that happen when working with unethical agents that any buyer would not want to experience. Thus, doing a little bit of background check will save you from possible financial loses.
One way to check is by going to the website of the Professional Regulation Commission at https://online.prc.gov.ph/Verification. Through this site, buyers can verify the license of real estate appraiser, broker, or consultant through their name or license number. The Real Estate Brokers Association of the Philippines also has a members’ directory by region and chapter.
Aside from doing online research, you can also interview your agent and ask about their experience. You can ask for references so you can talk to his or her previous clients. You can also ask around real estate circles if you want an unbiased opinion of the agent in question. By thoroughly checking previous transactions and dealings of the agents, you can shed light on his integrity.
3. Is the property titled?
The Philippines follows the Torrens system of land registration. This simplified system of registering land guarantees that when a certificate of title is issued to the registrant, it is quiet, perfect, absolute and indefeasible. However, a certificate cannot always be considered as conclusive evidence of ownership. Registration is not the equivalent of title, but is only the best evidence thereof, as held by the Supreme Court in Tek Sheng vs. CA. As such, the indefeasibility of a title does not apply to lands registered fraudulently under the Torrens system.
Note also that tax declarations are not conclusive proof of ownership of land. They are merely proof that the taxes on the property have been paid. A person with a title will always win against a person with a mere tax declaration of the property.
Aside from checking if the property is titled, buyers should also make sure that they have a clean title. This means that there should be no liens or encumbrances, such as the land being used as security for a debt. Liens and encumbrances are usually annotated at the back of the title, so a clean title means that the back page is empty.
4. Is the price great?
There will be excellent, valuable properties for sale over time but is the price a bargain? It is essential to be patient and have the right timing when purchasing valuable properties. Although properties don’t go down as much in the Philippines, some properties might be overpriced, which might take time to correct.
5. What if there is no title?
There are lots for sale that have no title registered. This might mean that the lot is government-owned or has been classified as alienable or disposable just recently. There are bargains to be found here, but for the general public, it is recommended to stay away from properties for sale with no title.
Making the buying decision
The decision of whether you will buy a certain property or not is a business or personal decision. No matter what your decision is, patience and experience always prove vital in any real estate investment.