First Time Homebuyers Find Opportunity in Current Market

Looking for a one-stop-blog to help first time home buyers in the Philippines, I didn’t find any! 

Doing a bit of research, I found this site from Basta Pinoy  with an article by Charles Covalesky, a Title insurance lawyer based in Florida, with info on helping you get your first home.  Yes, it was written for the Florida residential buyer market, but a lot of the advice offered can be applied here.  There are a couple of points which the article cites, which are differently practiced here in the Philippines.  

One, in terms of financing, there is NO PHILIPPINE BANK that will give you an approved loan equal to the house’s selling price.  That means you must put in some equity, equal to at least 30% if the house is on re-sale.  The only time I’ve seen this exception is when some customers would agree to  an unscrupulous agent’s suggestion to pay off the appraiser.  What the appraiser does is to raise the value rating of the house, consequently leading to a higher approved loan value.  In many cases, it’s enough to cover the entire selling price.  But it doesn’t reflect the real asset base of the Philippines.  We in the Philippine Association of Realtors Boards (PAREB) discourage Realtors from bribing any official or network partner, as it sets a precedent of dishonesty and bad business advice.

Credit ratings for consumers are only visible to the Philippine banks, unlike in the States you can pay for the service for access to the information. Your bank officer will just tell you that you get a pass’ or ‘fail’ rating.   Our loan approval system also relies on specific neighborhood information from referred friends or associates,   in addition to a review of the objective details given by the borrower himself.  That’s where the Realtor’s role is important as he acs as mediator between the borrower and the bank if he offers bank loans as a mortgage broker. 

Lastly is that though there may be an economic recession round the world, in the Philippines most people I’ve talked to, sellers and buyers, say that it’s as if  the country is much less affected than its Western counterparts.  You may also attribute it to the smaller supply of good homes  in your area of choice, which keeps buyers on their toes to look for the best house with the best deal.  But my advice is to aim for a fair price or slightly lower than market price, and grab the good property if you find a house worth negotiating for.  Don’t wait for the seller/owner to bring the selling price way down.  Every seller, remember, thinks that his house is the best.  He can be less objective about the pricing compared to the next seller.   Good houses in any market sell quickly.