Buying a condo from the US

mrboffa New member

3POSTS

4 years ago

I have been chatting with a realtor for the past week about buying a pre-construction condo unit. I ask about payments. He tells me the developer has a dollar account here at a bank of America and that's how he works with US clients.

I didn't think that payment would be direct to the developer. Now I have never bought property overseas before but I thought there would be an escrow or title company that would hold the funds and then release it upon completion of the the contract and build.

The realtor tells me. "Actually Sir, they do not do this in the Philippines. Even the biggest developers here in the Philippines do not put the payments of the clients under an escrow fund."

Is this how buying and selling property is really is in the Philippines? I feel like it is so risky.

See also

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stillbiker Active member

80POSTS

4 years ago

Hello Boffa.
NOT TRUE! A few years ago i bought a lot trough an ESCROW with Summit Bank in Baguio. For some obscure reasons the sale was cancelled and I recovered the FULL amount deposited at the bank. Regards Rudy.

2 members reacted to this post

frankanderson Contributor

114POSTS

4 years ago

which developer is this? This is important

For some - don't trust - You put money in their account, they send you some paper work, you wait and get your condo on said delivery date. Expect delays

It's possible that particular developer don't do Escrow as they want/need the cash right away to farther continue the project. It's pretty common here that they try to sell pre-built condos.

if the developer is Robinson's, SM or Ayala, yea they probably won't run away with your money. But if it's some unknown developer or small developer, walk away.

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Stephen Farrington Member

1POSTS

4 years ago

Yes, be careful with this one.

Enzyte Bob ViP

4301POSTS

4 years ago

frankanderson wrote:
which developer is this? This is important

It's possible that particular developer don't do Escrow as they want/need the cash right away to farther continue the project. It's pretty common here that they try to sell pre-built condos.

You have to be careful, many years ago as a young man I was naive in having a custom home built. The contractor specialized in building custom Cedar homes. Outside rough sawn ceder and interior smooth sawn ceder, no drywall in the house, cathedral ceilings and ceder shake roof.

It took two years to complete the house. Another couple who we knew ended up with a pile of lumber and no house.

The contractor skipped town, he ran a Ponzi Scheme, he probably used the other couples money to finish my home. Ours was the last house he completed.

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coach53 ViP

1564POSTS

4 years ago

To OP. There are a lot of condos for sale, so you can easy get one AFTER you arrive so you can look in place before you buy.

frankanderson wrote:
which developer is this? This is important

For some - don't trust - You put money in their account, they send you some paper work, you wait and get your condo on said delivery date. Expect delays

It's possible that particular developer don't do Escrow as they want/need the cash right away to farther continue the project. It's pretty common here that they try to sell pre-built condos.

Yes thats common. Can be both
/Honest
/Scammers
/Or honest but incompetent so not geting it finnished neither.

I got to know it can be TAX TRICK to NOT finnish FULLY, because some tax/fee dont need to be paid until finnished fully finnished! Then you can get your condo, but part of the complex will still look as a construction site, which perhaps never will be finnished by that tax thingy. (If it isnt changed since I gpt to know of it some years ago.)

And some pre-sell comlexes where the buyer get a "temporary" - expensive - loan from the constructor or close related, they DELAY on purpouse when it can become separate titles, because without title te buyer cant get a - cheap (in Phils messure) - bank or Pag-Ibig loan...

So there are many scam and fishy situations in Phils.

I wouldnt buy a condo for myself anyway by I want to lve rural but if I woiuld buy a condo it sure WOULDNT be a pre-sell and NOT buying at distance.

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pnwcyclist Philippines Expert

1489POSTS

4 years ago

Yes, red flags all over this one. Just don't do it, Coach is right, buy one when you get to PI or better yet - rent.. it's inexpensive and too many scams and restrictions when you buy. Not to mention difficult to rent or sell a unit. It's just not worth it. We have generally lived in gorgeous top of the line properties with expansive views for well under $1000 US per month, including utilities.

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tpiro Serial expat

274POSTS

4 years ago

Oooooooooooh... glad I read this post.. Now I know what not to do.. Thanks to all for great advise..

1 member reacted to this post

Okieboy Serial expat

659POSTS

4 years ago

Rent and keep your money in a US Bank, as far as condos in Davao when we had an earthquake a few years ago two condos were damage beyond repair, did the owners get their money back NO, and as far as fire and rescue forget it, I don't stay in a hotel that is two stories let alone 10, when the water truck
Runs out it is 5 gallon buckets I have saw this live

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Gregorio2020 Active member

64POSTS

4 years ago

#10

Wow...I remember that earthquake....I was on 7th floor hotel downtown Davao....when everything started shaking.....I can't imagine how bad it was on the top floor...14. I'm in Cebu now....and starting to think about condos here...but not sure yet.

coach53 ViP

1564POSTS

4 years ago

#11

Gregorio2020 wrote:
Wow...I remember that earthquake....I was on 7th floor hotel downtown Davao....when everything started shaking.....I can't imagine how bad it was on the top floor...14. I'm in Cebu now....and starting to think about condos here...but not sure yet.

There are earthquakes in Cebu too

The only of the biger islands without earthquakes are Palawan (and a corner of Panay.)

tpiro Serial expat

274POSTS

4 years ago

#12

Damn Greg.... I'm thinking also about a condo in Cebu... ya got me thinking different now... Tony

Gardo Fuentes Serial expat

246POSTS

4 years ago

#13

If you are under 60 and have settled on the place you wish to stay long-term, it would be benign to buy a condo instead of rent.

To me the trick is to find a unit where at 6% interest rate, the rent for the same property is equal to the mortgage on a 25 year term. I call it "rent with a term date". The lower the interest rate the better.

I doubt as we age, we would be moving. Can you imagine the hassle? That is why it is key to really do the moving and renting early on.

As a bonus, by the time the 25 year is up, your property has appreciated and you can sell that and get your capital gains (net of tax).

However if you are past 65, I think the lean would be on renting. It would be a different case if you have cash to work with for purchase so that you can get all your equity back before you turn 85.

1 member reacted to this post

GuestPoster04 Guest

0POSTS

4 years ago

#14

Ok,, I will keep that in mind thank you

tpiro Serial expat

274POSTS

4 years ago

#15

lloydamos81, I just bought a condo in cebu for 3,126,000 ₱.. which BTW is impossible to find one here in the US for that price of $61k. A nice view of Mactan/Cebu, ocean and about 660+ sq.ft., 2 BR. I'm 68 and in decent health and getting ready to retire in the Phils- as soon as the restrictions lift. So, I figured it out (breakdown) for about 15 years = 180 months / 61k is approx $338 per month. That's pretty cheap rent if you own it. Yea I probably would pay more than that in rent somewhere.. but it's nice to own it. Hopefully I'll live that long for another 15 yrs. That way I have something to leave my gf/wife after I'm gone. Just food for thought.

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Wellsfry Serial expat

397POSTS

4 years ago

#16

Link to your new condo? I may be interested if any more available...

coach53 ViP

1564POSTS

4 years ago

#17

tpiro wrote:
l I just bought a condo in cebu for 3,126,000 ₱.. which BTW is impossible to find one here in the US for that price of $61k. A nice view of Mactan/Cebu, ocean and about 660+ sq.ft., 2 BR.

Without been there?!!! and messure if you dont need to sleep with head in bedroom, body in sala and feet in bathroom Many appartments in Phils are made for Filipino tiny sized people and bedrooms are often even to small for them, has only space for a bed.
660 sqfeet is small to have space for 2 BR, sala, kitchen and cr...
Compare: The appartment I live in now has same parts as yours but is a bit over 900 sqfeet and has only a tiny bathroom and a small sala in normal "western" messure anyway, inspite of no space spent at hallway, which make all except one room is walk through... (Its rebuilt from being office so for an appartment it has bad planning.)

3,126,000 ₱. A bit away from the bigest cities there are HOUSES including some land for less than that.

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Jackson4 Serial expat

714POSTS

4 years ago

#18

tpiro, I wonder if you can share which condo you bought from. Members might be interested in doing the same as you did. I, for one. 🙂

tpiro Serial expat

274POSTS

4 years ago

#19

Wellsfry... try looking up Saekyung Village in Cebu. They are on Mactan Island. Decent places and they are building a new one next to the previously built ones. 1 and 2 BR's at which I think is a pretty good prices. You'll have to google Saekyung Village.. I can't put a links on here... any links/photos/internet info- or the Link Nazi will terminate it.

pnwcyclist Philippines Expert

1489POSTS

4 years ago

#20

Just be careful guys. I don't want to discourage anyone but you have to thoroughly do your homework. It is always best to look at the unit in person. Make sure it is already completed and you understand all the finance details and restrictions that may be in place. There is very little legal recourse for a foreigner in the Philippines and some have had to walk away from their investment after the condo was not completed, further money was demanded, structural repairs weren't made, or they found out they couldn't rent it for income as they had planned. Search the forum - there are plenty of threads.

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Gardo Fuentes Serial expat

246POSTS

4 years ago

#21

tpiro wrote:
lloydamos81, I just bought a condo in cebu for 3,126,000 ₱.. which BTW is impossible to find one here in the US for that price of $61k. A nice view of Mactan/Cebu, ocean and about 660+ sq.ft., 2 BR. I'm 68 and in decent health and getting ready to retire in the Phils- as soon as the restrictions lift. So, I figured it out (breakdown) for about 15 years = 180 months / 61k is approx $338 per month. That's pretty cheap rent if you own it. Yea I probably would pay more than that in rent somewhere.. but it's nice to own it. Hopefully I'll live that long for another 15 yrs. That way I have something to leave my gf/wife after I'm gone. Just food for thought.

Congrats on the purchase tpiro! This is a great example of where mortgage is less than rent as I think that same 2BR unit would get rented higher than $400 per month.

tpiro Serial expat

274POSTS

4 years ago

#22

Absolutely agreed pnwcyclist... I did my research before hand and absolutely will not buy on spec/pre-built.. it has to be already built and have a good agent to trust and a reputable realty company. That's why I told him about Saekyung Village there in Cebu.

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tpiro Serial expat

274POSTS

4 years ago

#23

yea gardo... definitely cheaper than rent and, if I ever need to come back to the states for a period to time- I can rent it out like an AB&B for $400 a month fully furnished... it's centrally located there in Cebu. thank you for the compliment, tony

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tpiro Serial expat

274POSTS

4 years ago

#24

Yes. wouldn't mind at all. It is called Saekyung Village in Cebu.. you can find them on FB or just a google search will pull them up.

coach53 ViP

1564POSTS

4 years ago

#25

Gardo Fuentes wrote:
This is a great example of where mortgage is less than rent as I think that same 2BR unit would get rented higher than $400 per month.

There will be costs as property tax and fees to the condo organisation too, so dont get to happy before knowing them too

I have no idea about what rents are at such in big cities, because I am not interested in big cities but HOUSES can be rented for less than that in provinces, I believe even nice BEACH houses... At least there are nice beach houses for rent at 400 usd = 20 000 pesos level.

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tpiro Serial expat

274POSTS

4 years ago

#26

Yes I agree... other 2 BR condos are small, but these 2 BR's were built approx 5 years ago and are about 62 sqm = +660 sqft. Yup you can find a house in the provinces cheaper.. but you can't own the land unless it's your filipina's/wifes ownership. However, with what you said in mind- yes it may be better for a house for some. Me, I prefer a Condo. I've owned many houses in the states and truthfully, I am tired of home ownership... let someone else cut the lawn and paint and fix...LOL Regards, Tony
BTW: condo fees/taxes are outrageous - hca ($38/month) and taxes ($100/year)... LOL

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Gardo Fuentes Serial expat

246POSTS

4 years ago

#27

coach53 wrote:
There will be costs as property tax and fees to the condo organisation too, so dont get to happy before knowing them too

I think most here knows that c53. It's a expat forum not a first day at job forum.

Be that as it may, re property tax, that is why you get a space suitable to your family because tax is relative to the space. And re fees to the condo, most renters pay that in addition to the rent. Or at least that is how it is for these newer condos.

tpiro Serial expat

274POSTS

4 years ago

#28

you are correct gardo...

Gardo Fuentes Serial expat

246POSTS

4 years ago

#29

tpiro wrote:
Me, I prefer a Condo. I've owned many houses in the states and truthfully, I am tired of home ownership... let someone else cut the lawn and paint and fix...LOL Regards, Tony
BTW: condo fees/taxes are outrageous - hca ($38/month) and taxes ($100/year)... LOL

See that's what I thought it would be. OURTRAGEOUS TAXES AND HOA FEES.

We are in the same boat, Tony. I prefer condo but for me it is the airspace I am attracted to. I love looking down at people, literally in this case. And like you, I prefer the convenience of no yards to look after, especially as we grow older. It would help my spine not having to bend a lot to reach down for yard work. Plus it is just maintenance cost I can do without.

Instead, I'd be happy to tend to my plants inside the condo to get me my greens.

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Gardo Fuentes Serial expat

246POSTS

4 years ago

#30

This is the view from condos in my area Legazpi Village. Love just seeing this from my balcony sipping wine and enjoying the cooler air from the altitude.

[img]

[/img]

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wernervangelder Member

10POSTS

4 years ago

#31

This is just an “artists impression” … never buy off the plan . Low quality , high price .
Developers are bordering criminality here

3 members reacted to this post

pnwcyclist Philippines Expert

1489POSTS

4 years ago

#32

Nice view, Gardo. I like that.

1 member reacted to this post

Gardo Fuentes Serial expat

246POSTS

4 years ago

#33

wernervangelder wrote:
This is just an “artists impression” … never buy off the plan . Low quality , high price .
Developers are bordering criminality here

It's not a drawing though if that's what you meant. It's a photograph.

Gardo Fuentes Serial expat

246POSTS

4 years ago

#34

wernervangelder wrote:
Low quality , high price .
Developers are bordering criminality here

I'm assuming you have not lived in US.

"Low quality" is still 10x higher in quality than in US
"high price" is still 10x lower in price than in US

"Developers are bordering criminality here" maybe so but man you don't know how it's still better than in US. In fact this is a main reason why I'm retiring in Pinas. Ability to live in "Billionaire's Row" at a fraction of cost.