OFWs buying property should seek proper advice, warns broker

Many Overseas Filipino Workers (OFWs) in Saudi Arabia have invested in condominium units and other residential projects while on vacation in the Philippines.
“One of their dreams in going to work overseas is to save and buy their own house and lot or condo units which have become the favorite thing to do among city residents who are busy either with work or attending school,” said Ellen Corcega, a broker for a big property developer in the Philippines.
However, she advises those who have yet to buy to seek professional advice from brokers and property consultants they trust.
Knowing the buying potential of OFWs, big property developers have also come to the Kingdom to sell their property development projects, such as condominium units and residential houses, in various parts of the country.
Corcega said that big property developers have capitalized on this niche in the property market. This is the reason why numerous multi-story buildings are now dotting the Manila skyline, she said, adding that “many more are coming up, in addition to those still in the pipeline”.
She noted that the urban landscape is quickly transforming as new buildings rise in Metro Manila. “Alveo Land is completing its Meridian development in Fort Bonifacio. The Federal Land-Orix Group recently broke ground for the Grand Hyatt. The Filinvest Alabang Inc. has just relaunched and rebranded itself as it expands its mall and builds more homes,” she said.
Corcega added that a new Holiday Inn is about to open at the redeveloped Glorietta Mall while Seda launched its first property in Bonifacio Global City and in other cities in 2013, adding that Rockwell has launched its own multi-tower development, the Proscenium.
Discovery Primea punctures the sky above Ayala Ave. with its tall and slender luxury apartment and service-suite tower, the first residential development of its kind, she added.
The rural landscape has also changed. There are large malls in the once-sleepy cities of both the north and south, in places still called “the province.”
South Manila’s new premiere mall in Lanang, Davao, has opened and Ayala Malls is expanding into all major cities. Ayala and Rustans are bringing in the Japanese chain, FamilyMart.
She added that high-quality resorts are rising in areas considered isolated some 10 years ago. Ayala Land has expanded its portfolio with El Nido Resorts brand, and the Dedon Resort Island in the surfer’s turf of Siargao raises the bar for developments in the backpacker’s paradise.
Explaining this phenomenon, she said that the Philippines has become a magnet for local and foreign investors due to the “policy of transparency being manifested and encouraged by the present administration.”
She noted that President Benigno “Noynoy” Aquino lll is enjoying unprecedented high popularity ratings among the Filipino people because of his “Daang Matuwid (Right Path) policy.”
She said that because of good governance implemented by the current administration, a Washington-based think tank predicts that Philippine domestic growth in three years to 2014 would be above 6 percent.
She said this is reason enough for property developers to come up with new projects. Their sales executives have fanned out across Metro Manila to various malls to hand out brochures and flyers to OFWs about projects under development or to be developed.
“These OFWs visit the malls to spend quality time and bond with their families,” she said.
She said, however, that they have to be careful because they might be paying hard-earned money for nothing because the sales executives are aggressive and might convince them to buy even if they do not qualify.
She said that if they are in their forties or fifties and earning about P120,000 (about SR 12,000) a month, they could buy a studio unit. However, she added, many OFWs in their sixties are at their peak earning capacity overseas but may no longer qualify because banks are hesitant to extend loans to them because they are retiring. The right thing to do for a property consultant, she said, is “to prequalify a prospective property buyer.”
She said that the developer will finance the payment of the down payment for 30 months, which is normally 20 percent of the total cost, but 80 percent will come from a bank loan.
“For this reason, the property consultant or broker should take the OFW customer to the bank that will extend the loan for the purchase of a residential or condo unit. The bank officer will ask for many things such as monthly salary and other sources of income that could be documented,” she said.
The bank officer would be strict and ask for a certificate of employment and bank records.
“So, it is necessary for an OFW to know whether he or she qualifies or not. Property consultants and brokers should ensure that the customer understands everything. Many young property consultants are aggressive to close a deal because they have to justify their hefty monthly allowances or because they could get a share of the down payment,” she said.
A broker coordinator, Princess Espino, added that an OFW buyer should be made to understand that his reservation fee won’t be paid to the developer until he has qualified for a bank loan.
“If the bank officer says that he’s qualified, it’s only then that the reservation fee is paid to the property developer,” she said, adding that if the prospective buyer does not qualify the reservation fee would be returned.
She added that if an OFW, or any buyer for that matter, does not qualify for a loan, he or she can apply for house financing with the developer. The cost of the unit, however, will be much more.
She added that if a property consultant demands a reservation fee, the prospective buyer should be told that it’s good only for one month. “It means that in a month’s time, the OFW should provide all the necessary documents such as certification of employment and bank statements. Then the following month, he or she starts paying the monthly installment,” she said.
This means that if an OFW doesn’t comply, she added, the reservation fee would be forfeited. Moreover, two percent will be imposed as a penalty for a late monthly installment.
Ishy Arellano, a property consultant with Ayala Land, added that if an OFW buys a studio unit in a tower, he or she could upgrade it later to one or two-bedroom unit without paying a fee. “However, if he originally applied for a one or two bedroom condo unit and he wants to downgrade to a studio type, he’ll have to pay a certain fee,” she added.
“OFWs should be advised well regarding their plans to buy a residential or condo unit. In other words, he should understand fully the terms and conditions,” she added.