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When I was invited by my dear friend Joel Reyes Zobel in his radio program at GMA Network DZBB’s “Bangon na Bayan” and by another good friend, Dhobie de Guzman, News Anchor of TV Patrol Northern Luzon (Baguio City) for the year ender business forecast on 2010. One of the businesses I mentioned was real estate, ranked third next to (1st) food and (2nd) health and wellness, (4th) digital media business (internet, design studio and other allied products, certainly because of the election fever) and last but not the least (5th) is the automotive industry. No thanks to Ondoy!
With the growing ageing population of our Filipinos residing abroad and also our beloved heroes, the hard working OFWs who plan to come home sooner or later, almost all of them whom I had the chance to speak with are either planning to invest on properties or setup up their own business.
One thing good about investing in the real estate properties here in the Philippines as compared in America, Europe and other Asian countries is that, in the Philippines, we can safely assume that in general, that each year there is an increment as far as the value of the property is concerned. The only time some of the properties here got devaluated was when Baguio was hit by the earthquake and the Ondoy tragedy last year.
This is a prudent way on how to manage their hard earned mammon, investing on properties. Some are enticed to jump into the bandwagon right away. The well trained sweet talker sales force of real estate firms will promise you heaven and earth including perhaps their soul just to convince you to invest in the property they are selling. Once you finish your deal with them, good luck! Hope you will truly get what they promised you to receive before when they were still convincing you.
Last night, my friend met up with me to share her disgust over the property she bought in Makati from a new developer. The developer emailed her last September and enumerated what she will expect to get in her unit once it is turned over by the developer. One of the items mentioned was the heater in her toilet and bath. When she was doing her “punchlist”, she found out that the heater was not there. Then the sales agent said, “Ma’am nagchange na po kami ng policy on that.” But my friend insisted, “You changed your policy even without informing us?” Then the agent said, “Ma’am wala ho kaming magagawa. Siguro kausapin nyo na lang yung management.” My friend emailed the management about her concern, instead of replying on her concern; the management emailed to her the balance she has with the company which was not her fault at all. She held her payment because the promised turn over of her unit should have taken placed last February 2010. But it is only now that the unit will be turned over to her by the developer.
My friend’s concern is she cannot leave yet the condo she is planning to sell because the expected time she will move to her new unit has been long delayed, from February to July or maybe August. Can you imagine that waiting she had to do, almost one and a half year! And yet, the developer was not even true to their commitment to equip the unit with a water heater. Take note, just a water heater.
This is not the first time I hear that kind of sad story of a buyer of property from the developer. Several people have approached Messrs. Mike Enriquez’ Imbestigador and Gani Oro’s Action Oro Mismo in their radio programs at DZBB. The sad part is when they tried to communicate to the developers; the developers are not even courteous enough to clean up their mess. They are evasive and continue to be adamant. Come to think of it, these helpless buyers sought the help of the media out of desperation and the reaction of these developers was surprisingly arrogant, ignoring the mediation of the media even if these developers are aware that they are at fault.
For would be buyers or investors, caveat emptor (buyers beware!). Please consider the following points before investing in real estate properties.
1.) Developer’s Track Record. What are the projects that the developer has done? Has the developer completed any of its projects or it just keeps on pre-selling their projects which are never completed at all and the proceeds of the pre-selling go to expanding their other business interests? I have seen lots of billboards of other developers using celebrities left and right. For the gullible buyers, they will really be wowed by these billboards and thus entice them to buy a property from the cunning developers. But if you will analyze closely, these developers have so many projects but so far none of them was completed. Open your eyes and don’t be a willing victim. If you want to back out, it will take you almost eternity to get your refund minus all the other charges and service fees they imputed on you.
2.)Market Value. Attached to the market value is the integrity and track record of the developer. Is the property developed continues to appreciate in terms of value? Will you not have a hardtime to re-sell your property or at least have it leased at commanding price? What are the projects that the developer has done? What is the image of the developer in the industry? Is the developer known for being shrewd and greedy? How about the location? Is it really accessible to public transportation, hospitals and other establishments that you need? What about the amenities and security of the property? Sometimes, these are the factors that are needed to be considered but so often neglected.
3.) After Sales and Customer Service: The most disgusting and frustrating part of the deal when buying a property is the after sales and customer service. As I said, there are sweet talkers who will entice you to invest on their property but when you need them, nobody was willing to attend to you. This is the common problem that buyers encounter in the process. Sales agents will be practically at your beck and call when you have not decided yet to buy. But once you buy, it’s a done deal. Forget them. They don’t seem to realize that taking care of you as customer might even result to possible potential referrals from you if you are happy with the service. But there are some people who are just happy with “one shot deal”. These are the “bad guys” not the “good guys”. They are like banks that lend you an umbrella in fair weather and ask for it back when it begins to rain.
4.) Quality: In pre-selling, the common practice of the developer is to have a model unit that is really attractive while others sell from the beautiful brochures with drawings and perspective of the property. Then in the sales contract there is a clause that states and I quote: “Actual unit may differ in the model unit.” In spite of that caveat, a lot of people still fall into the trap of buying without doing a due diligence. The “impulse buy” or the “sales talk” made them decide to buy but regret later. One classical case is my client who decided to buy a condo unit in Malate, Manila area. When she saw the toilet and bath, she was shocked how crude and repulsive it was. She planned to change it right away but the developer told her to wait for the turnover and then she can do the renovation. According to her, even a pig would not be happy to live in that kind of “pen”! When I asked her why did she buy from the developer, she said “the model unit was so beautiful.” Buyer should also consider quality of materials being used by the developer. I heard about a developer who used adulterated cement in the expensive condominium being sold now. When buyers learned about it, they decided to stop the payment of their checks and demanded for a refund from the developer. I am not sure if this case is still being heard in the court now. But when I had a chance to speak to one of the Supreme Court Associate Justices several years back, he told me that this case is still being heard.
I ought to acknowledge that there are really no strict rules or guidance in buying property or choosing the developer where you will invest your hard earned money. The best thing is to do your assignment. Do your own diligence. Oftentimes than not, we decide to buy upon the recommendation of either our relatives or friends who don’t really understand the business. Needless to say, they just happened to be working for the company or a sales person of the company who just want to have an “ice breaker” sale. Too bad, you will be the victim. Know well where to put the money you earned from your own sweat and blood. Just like in the retail industry, there are also “bad giants” and “good giants” in the real estate industry. Just find out if they are really “good guys” or just bunch of great pretenders? Think twice before you decide. Ask around when needed. As David Joseph Schwartz says, “How they think shows through in how they act. Attitudes are mirrors of the mind. They reflect thinking.”
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