Spot the Scam: The Five Most Common Real Estate Scams in the Philippines

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“Winners are not afraid of losing. Failure is part of the process of success. People who avoid failure also avoid success.”-Robert Kiyosaki

 

Scams are rife regardless of whatever industry it might be. In the world of real estate, it is so much more pronounced and prevalent—so much so, that even in this digital age wherein information is conveniently and readily accessed online, quite a lot of people still fall prey to it. After all, as technology advances so does the means of conning people.

When it comes to deals, a good rule of thumb to always keep in mind is if a deal sounds too good to be true, it probably is. Sounds easy, right? However, if it were so easy, why are people still falling victim to these illicit and dishonest schemes and ploys nowadays? Well, probably because owning a home is not only considered as a keystone of wealth and stability, it is almost every Filipinos dream—a fact that is being capitalized on and exploited by charlatans and deceitful schemers. In this regard, prospective homebuyers should be a little bit more meticulous and thorough when it comes to choosing who they deal with—whether that may be property managers, real estate companies or real estate agents. The burden of responsibility in double-checking their prospective transactions and the legitimacy of such individuals is then, therefore, borne by the buyer. After all, no one can really be conned if every prospective homebuyer exercises his or her right to exhaustively check what they are getting into in real estate deals.

To prevent yourself from being robbed and conned out of your hard-earned money, it is best if you are made aware of the most common scams utilized by these fraudulent individuals here in the Philippines. Moreover, your protection against these scammers is buttressed by the research and validation you make. So, before closing a deal, be very sure you know who you are dealing with. If you are looking to buy a condo for sale in Makati or elsewhere, make sure you are not falling for any of the scams below:

 

Pre-Selling Scam

A common and rather widespread real estate scam in the Philippines is the pre-selling scam. Today, with condominium properties being a ubiquitous presence in the country, it would only be inevitable for scammers to see this as a real estate investment scam. Over the last decade, the real estate experienced a boom in the condominium property industry and as a result, we can see condominium properties in almost every nook and cranny in major cities. Pre-selling scams occur when developers do not follow the mandated rules as regards requisite permits. Alternatively, they may choose to attain these through illegitimate and dishonest means. To lure prospective buyers, developers would pre-sell their units at incredibly low rates with the promise of timely turnover dates. To sweeten the deal, they would even provide excellent incentives. Unfortunately, the scam occurs when the expected turnover day nears, the development is still not done. An extension is then repeatedly done until such time that the homebuyer would give up on it.

 

Double Sale of Property

As gleaned from the title, this scan occurs when a property in question is bought by two different buyers. It commonly occurs when the first buyer neglects or fails to register and transfer the title to their name to which the crooked owner would then sell it again. In effect, two buyers would now have the same title under their own names.

 

Bait-and-Switch Scheme

This scheme is a little more insidious and deceptive as prospective buyers are unaware of what they are really getting into until it is far too late. This scam is put into effect when real estate agents advertise real estate properties that they are not authorized to sell. Either the properties are handled by a different agent or are not really for sale. To entice buyers, these properties would be given incredibly low price tags which in effect, are considered baits. However, upon further inquiry, unscrupulous agents would then claim that the property is no longer for sale or has been sold. In this regard, agents would then offer their very own listings which are either pricier or less attractive than their previous offer (designated as the switch).

 

Insufficient disclosure

Such scam happens when a real estate developer or agent willingly, intentionally and knowingly withholds crucial information about the property from their prospective buyers. This information can range from anything an unclean title to the property being pending in litigation. In any case, the information withheld is vital enough as it would leverage a prospective homebuyer’s decision on buying the property. Should this information be disclosed, potential clients may think twice before buying. Some properties may come across as attractive and promising, but upon contract signing, you would be surprised to know information about the property you did not know then. Tax delinquencies, encumbrances, hidden charges, structural facts such as poor property foundation and the like are among of the less than desirable things you might find.

 

Individuals posing as real agent artists

Regardless of what industry you are in, you will always come across your fair share of con artists. The real estate industry is no exception—especially considering that a successful venture in it can be incredibly lucrative. Another common scam related to real estate in the Philippines is for an individual to pose as a real estate agent—a con artist if you may. It is because of these agents that the country experiences so many real estate frauds. In fact, they are to be blamed for most of the frauds related to real estate in the country. To give themselves the veneer of legitimacy and authenticity, they would exert efforts in creating professional-looking websites and put up listings that they have seen online and copied. Unfortunately, after they have successfully conned you into paying a security deposit or an initial payment, they will be gone before you know it.

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Send Me Your Location: Retail Spaces

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Commercial real estate varies from residential. The type and size of a business is a factor when looking into a potential commercial space. A small enterprise with limited inventory could settle in kiosks. Meanwhile, other firms may require spots in shopping malls or a free-standing structure.

There’s no need to rush when deciding on retail space. It’s much better to build a solid conclusion than a half-hearted decision. Below are pointers that can help one decide which is the best retail space for the business.

1. The space covers the business’s wants and needs.

Setting up a restaurant requires a huge floor area as it has a kitchen and a place for diners. A clothing store or fashion house at Solaris One may expect less than a restaurant. Meanwhile, a repair shop can do well with specific square footage especially when it doesn’t make stock items for sale. The size of the retail space will impact its price. It’s essential to note these details, especially when considering a budget.

Other than sticking to a budget, the potential of the business to expand is s factor to consider. The brand may attract customers that will boost sales and require an additional stock of merchandise, seating or service. The space must be enough to cover current needs, but it must also be flexible to allow expansion.

Lastly, the space must share the brand’s story. It must be customizable and ready for changes and renovations for owners and companies to convey their message to customers.

2. Customers and talents are within the area.

Knowing the brand’s target market provides an idea of the geographical location of potential buyers. If the space is in a place accessible to the target market, it gives them the convenience to avail the product or service. At the same time, consider the climate of the business community in the area. A community of supportive and growth-based entrepreneurs helps micro and small businesses thrive. Meanwhile, a competitive landscape is unhealthy for growing companies.

Future employees and staff must also be in mind when scouting for retail spaces. The ease of travel improves productivity at work. A workplace far from home results to tired and haggard talents. Their fresh energy gets worn out during the commute. When the retail space is near the skilled workers, the business gets the best out of its human capital.

3. The price of the property fits the budget.

Going for a retail space that is over the budget is overspending. It cancels the purpose of setting up a business – generate income to earn a profit. An area beyond financial limit causes troubles later on. Still, the space must be a high-quality retail space that suits the brand and enterprise.

4. Public transport and infrastructure are available.

The main concern when considering clients and staff is their convenience of travel. It’s a plus when the retail space is near different modes of transportation and government institutions vital to your operations. Moreover, it is also an advantage when Internet and telecommunication providers cover the business location. Since most transactions are online, the Internet connection will benefit operations by having a more extensive customer reach and streamlining business process.

5. There is space allocated for parking.

Most business owners forget to consider the need for parking spaces. Ample parking space is valuable for clients and people who are part of the company to prefer to reach the area through their vehicles. How hard is it for them to suitable parking space especially in a busy area such as a central business district. These people may choose a competitor with similar products or service because of the lack of space. Be it in front, back or beside the retail space, and the parking space must be accessible to clients.

6. The space must not have strings attached to it.

The full cost of the space comprises the rent, utilities, construction costs, moving expenses, and a list of other expenses that may not be obvious in the beginning. There may be costs associated with the move such as the restoration or remodeling of the space.

7. The lease terms and rental rates must be secure.

To get the best out of a lease contract, it must be subject to renewal. Any increase in rental rates must be subject to review by the landlord and the lessee. Furthermore, survey the rental price if it is the gross or net. Most figures are net. It only shows the base or the payable amount.

8. Furniture, fixture, and equipment is a must for business.

Their retail space must include furniture, fixture, and equipment since they produce products and offer services. Stocking these items in a corner contributes to an unpleasant environment. The retail space must be roomy for the bulky items. That is a property where rooms are not scarce is a keeper.

Retail Spaces Need the Time and Place to Come Through

The needs of the business entity as well as its customers and staff make up the factors to use as a guide when choosing a retail space. Besides these factors, the basics of deciding on real estate decisions such as lease terms, property price, additional expenses, as well as proximity to modes of transportation and infrastructure, affect the attractiveness of the space.

Note: This article was first published on May 5, 2016, as “Where Should You Locate Your Business?” It was revised and updated for accuracy and comprehensiveness.

Real Estate Investments: Four Factors and Aspects to Consider in Pricing a Home for Sale

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“The art of selling one house is different than the science of repeating it flawlessly over and over”-Chantel Ray

An excellent sentiment to keep in mind when it comes to selling homes is to price it right. As the maxim goes, if you price it right, it sells overnight. Should your price it wrong, then it stays on too long. With this in mind, giving your properties a fair selling price should be one of the significant considerations you should take into account. Although there is a myriad of factors that go into a buyer’s decision in closing a deal with a home seller such as the location and features of the home, the asking price of the property is of paramount consideration. However, how does one ensure that the home is priced just right? How do you come up with an asking price that would encourage a timely sale? Indeed, this has been a feat that has evaded even the most seasoned of home sellers as well as professional realtors. Considering that the real estate market is perpetually in an erratic state, coming up with an ideal price that would be a fair deal to both home buyer and seller as well as encourage a quick sale is something that would require years upon years of experience complemented with professional expertise—and even then, it does not always guarantee you an opportune sale.

Numerous studies have indicated that should a home remain on the market for quite a long time, there is a likely chance it would not fetch as much money as it would have when it finally does sell. This can be quite the predicament—especially if you have found yourself stuck with a property that would not sell because you priced it exorbitantly. For this reason, pricing a home correctly from the get-go is an imperative factor to consider. However, while accurately pricing your home to the dot is not easily done, it is very much doable. All you would need to do is to have an understanding as to how to go about the pricing process.

If you think you can con your prospective buyers into agreeing on a higher asking price, you may need one to reconsider that. Take note; your prospective buyers have all the access to a considerable amount of information about your home. With this type of information at their disposal, it will be implausible for a buyer to purchase a home at a price that is considered above market value. Unfortunately, quite a lot of sellers are under the impression that pricing a home higher would result in higher sales. Believing this sentiment could potentially be damaging to your revenue as the longer your home sits on the market, the more inclined you will be to reduce its price. In some cases, you might even be constrained to trimming it so that you can sell it. Pricing your homes right should be a vital consideration—regardless of whether you are selling a home or property in One Serendra or elsewhere. To ensure that value your home close to the appropriate asking price as you can, here are some of the factors you should consider:

1.) The condition of the market

Generally, before even thinking of selling a home, the standard practice is to take a long and meticulous look at the housing market. After all, if you do not scrutinize it well, you would not be able to come up with a realistic asking price. For some time, the real estate market has shown signs of improvement. But, do not let this be the sole basis of your asking price as over the years, there have also been several dips that might consequently result in more dips as time goes on. Selling on a slow real estate market climate means having to price your homes competitively—that is if you wish to move the house. Alternatively, you can bide your time and wait for things to improve. However, if the market does not recover, you would be compelled to pricing your home lower than what it would have fetched should you have begun at the outset.

2.) Compare sold properties

One aspect to consider when pricing your home right is to take a look at recently sold properties that are in your area. Apart from that, look for properties similar to yours and come up with a figure that would be both fair to you and your buyer. The population density of your area should be a consideration. If you live in a particularly populated city, your search should only be limited within a mile of your home’s location for recently sold homes.

3.) Consider current inventory

If you wish to have an approximate feel of how competitive the real estate market is, take a gander at the current home inventory in your area. If there are a plethora of houses similar to yours at the moment, you would need to price your home a little more aggressively to attract attention—particularly in a competitive market climate. However, if there are fewer homes for sale, you can price your homes a bit higher if you wish as there would be quite a number of people looking to buy. However, the main driving point for your asking price is to ensure that your home stands out from the other homes on the market. It should be distinctive and should attract attention.

4.) Compare active properties

Apart from taking a look at the overall home inventory in your area, another thing you should consider doing is to analyze other properties that are currently for sale while you, yourself are selling. Homes that are already on the market have already gone through the very same processes you subject your homes go through. With this in mind, the prices of these homes would give you a rough estimation of how much your asking price should be. If you priced your homes higher than comparable homes, you run the risk of the house sitting and not selling. As a result, your home would be less valuable.

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