Filipino Consumer Alert

May 27, 2006

Buyers Beware !

I saw this helpful article of the same title and would like to pass it on to everybody. Below is its full text :

Buyers beware!
By Marcos de Guzman Jr.
Inquirer News Service

HOW CERTAIN ARE YOU THAT THE property you are buying with your life's savings will not go to waste? How confident are you that the developer you are dealing with can complete the job as promised?

Sure, the brochures are attractive! The prices are reasonable. The entrance gate is impressive. But are you sure the development will be completed and that you will get to live in the house you paid for with your sweat and blood?

Preselling

Since the cost of money is so high, most developers resort to preselling. That's marketing the lot or house or unit even before starting the project or while it is still under construction.

A lot of people buy during this preselling stage because the prices are lower and the rates are better since the developer need not add a premium for the cost of his money. But the trade off is that the risks of noncompletion are higher too.

To clarify the issues and identify checkpoints in protecting prospective buyers and investors, I met with the Housing and Land Use Regulatory Board (HLURB) main man, Commissioner and chief executive Romulo M. Fabul. Having served the board since 1982 and handled various offices under the past five presidents, he is the best person to speak to us about the field of housing in our country.

He recommends that even before giving a downpayment on the lot, condo unit, townhouse or house of your choice, one must be aware and take steps to minimize the risks.

Suggestions

So, in summary, he suggests that the prospective buyer must do his homework.

· Check if the developer has a permit or license to sell issued by the HLURB. If the developer has not fully complied with the HLURB requirements, such a permit will not be issued. This ensures that the developer has the capacity to complete the project.

· Check the track record of the developer. Established developers will not compromise their names with incomplete projects. Try to find out if there were instances when the developer was not able to complete a project and why.

· Have an expert check the product or the construction plans if at all possible. Or if there's an ongoing construction, ask a knowledgeable person to look the site over. The most important items to look at are not the finishes but the structural, plumbing and electrical systems. Plumbing issues could prove to be a nightmare for the hapless homeowner. Electrical problems can be very dangerous and weaknesses in the structure will not only be expensive to repair, but can be extremely disastrous.

· Buying lots in old or existing subdivision are even trickier. Consult the neighbors and homeowners' association. Verify the records from the register of deeds for back taxes and ownership.

· Listen to your intuition. There are pieces of property that emit good vibrations and some just don't. Remember, this is a house that you would probably live in for the rest of your life and maybe pass on to your children, so it is important that you feel good about it.

There are no shortcuts. Don't jump off the plane without a chute thinking that you can fly. No one can do all the above for you. You must get involved and be satisfied that you have done the best spade work possible. Only then, will you rest assured that your investment is an acceptable risk. Good luck!

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