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This page last updated May 15th, 2012

Buying Land or a House and Lot in the Philippines

Buying Land or a House and Lot in the Philippines (Oct 29, 2007)

Over the last year I have been looking at houses to purchase and have realized at the current time, it is probably cheaper to buy a plot of land and build the house rather than buy a used, already constructed home. If you are buying thru a real estate agent, they are normally getting 5% to 10% off the top of the purchase price, so it is of course cheaper to purchase straight from an individual seller. Even if you try to transact the deal thru a Filipino neighbor there is usually a percentage of the purchase price that goes to the finder that you’ll never hear about, usually 1 to 2%. Land is currently going anywhere from P4,000 a square meter on up depending whether it is a corner lot, and which housing development or area it is in, and of course prices are going up steadily with the development of the airport and the finishing of the Tarlac, Angeles, Subic highways, which is why you see corporations like Robinson’s Land Development purchasing large tracks of land for development.

As a side note, it is true that foreigners cannot own land in the Philippines, but real estate sellers and lawyers of course have found a way around the legalities with foreigners being able to own condominiums or have a Filipino buy the property and in turn fill out an Irrevocable Deed of Conveyance of Beneficial Ownership with special power of attorney from the Filipino to the foreigner for the property, thus allowing the foreigner to virtually have the same rights as a land owner, being able to build, lease or sell the property.

Here is a summary of my first attempt to purchase a lot which explains the age old phrase, “Buyer Beware”. I was informed of a 300 square meter lot in a secure subdivision xyz for P4,300 a square meter, and thru an office intermediary made the deal to be closed a week later, with all parties to be present to transfer the money and title at a local bank for the safety of all parties concerned. The intermediary, who works at the housing office of Subdivision XYZ, went thru all the motions of preparing the transfer of the title, receipts, powers of attorney, checking the land title in city hall to insure there was no mortgage on the property (as did I) which was bought by the owner/seller, Mr. Iggie (we will call him) whose name is on the property title, in 1985 as an investment for approximately P600 a square meter (not a bad investment).

On the day of the transfer everyone shows up at the bank on time, me with the money, the Subdivision Representative with all the papers, and Mrs. Iggie and her son (both from Bulacan, 90 minutes away rom Angeles City). I then asked Mrs. Iggie (whom I have never met), “where is Mr. Iggie”, whose name is on the title. She replies, “Mr. Iggie is sick and cannot make it to the appointment but he has signed all of the papers,” and then she presents me with the signed receipts and a xerox copy of his passport, drivers license and a copy of their marriage license. I said to Mrs. Iggie, “Whereas Mr. Iggies name is on the title, I would feel more comfortable talking to him before we close the deal, and does he have the flu or what, and we can complete the deal in a week when Mr. Iggie is feeling better”. Mrs Iggie replies, “oh no its not the flu, he has cancer and can’t travel.” “OK” I reply, “well can we call him and verify it is him on the phone by asking him personal questions from his identification cards?” “Oh no” says Mrs. Iggie and son, “He has cancer of the throat and can not talk.” The light is really coming on now there is a problem with this sale and I ask Mrs. Iggie, “Can I drive to Bulacan and visit Mr. Iggie at his house to verify the sale of the property?” Mrs. Iggie replies, “well it would be difficult as he is home some days and other days he is in the hospital”. Now pretty much realizing I am dealing with Mr. And Mrs. Grifter, I said, “Well call me one day before, when you know what location he will be in, home or hospital and I will come down to verify the sale.” Mrs. Iggie and her son agreed to this and departed the bank with the housing representative. I stayed in the bank to conduct some other business which took approximately 30 minutes and when I exited, the housing rep approached me in the parking lot and said, “Do you have time for Mrs. Iggie to talk to you again, she has something to tell you?” “Sure” I reply and Mrs. Iggie and her son get out of their van and approached me. Mrs. Iggie now tells me, “We didn’t tell you the entire truth, Mr. Iggie died last month of cancer and signed all the property sale receipts before passing away, as he didn’t have a will prepared. We are now trying to sell the property without going through the long, and expensive process of probate court, to have the titles changed, to pay his medical bills.” I politely thanked them for providing the rest of the story and explained there would be a problem purchasing property from a dead man, especially 6 weeks after the date on the death certificate, which they had volunteered to now show me.

So there you have it, example one, of purchasing property in the Philippines, stayed tuned for the next chapter.

Update May 15th, 2012

To update the story, we bought land from a couple who owned a lot in Timog Park Subdivision. They lived in Arizona and had a brother in law represent them. This type of transaction requires the brother in law to have a power of attorney from his sister, the land owner. She had to have a power of attorney made, notarized by the adjutant general of the state of Arizona, and then it had be be recognized by the Philippine Consulate in Los Angeles with an additional seal and ribbon. It was expressed mailed to the brother here on the ground and the sale was made, nothing is easy...........

Rick