The process of Buying Real Estate and Building a Home in Metro Manila.
First, I want to let you know, I built a wonderful house in a gated community that has a great board of directors and a vibrant community of folks here. I consider myself lucky. There are just as many scams and poor construction jobs I have heard about during my time here. Here is my story.
I lived and worked in Metro Manila for years as an Expat. I lived in Rockwell, Ayala Alabang and commuted across town to Fort Bonafacio for work, and later did a lot of consulting in the Makati area.
What I knew when I had kids was:
The smog in Makati was terrible and not a great place to raise kids. From a safety standpoint I wasn’t that much concerned, but having a nice house with a green yard and neighbors I could talk to was either inconceivable (cant change the air pollution).
Having a house was out of my price range (unless I suddenly was a long lost relative of the Ayalas, Lopezes, or some other high end family here) The price for lots alone in Forbes Park, Legaspi Village, or one of the other high end areas was stratospheric to say the least. Just not happening.
A sleepy little community of folks with no drama. No loud music, farmers around me, quiet hard-working folks. And yes, those places do exist.
Decent security in a village. No single guard at a guard house, I mean roaming security with walkie talkies that aren’t imperial storm troopers but roamed around, checking things and know who (and who is not) supposed to be there.
Our village has about 400 lots and 100 residents. Many have bought lots for future building. The place is clean and well cared for. No roosters running around in the streets, no drunken husband and wife spats. Many folks are working in Manila, some in Laguna. A lively community center and a swimming pool. If I wanted drama I could watch a Telenovela for amusement haha.
So I looked around.
Looking south, I saw that the south expressway / Skyway was going to be completed in the next couple of years. This means grueling commutes would be a thing of the past.
Good thinking on my part by the time I had my house built, it was a reality and with the new connector through town under construction, this means that getting up to friends in Subic / Angeles would be rather fast, rather than enduring 1 to 2 hours winding through Manila itself. Perhaps the road system in Manila would finally, finally be better than what it is today.
So I ended up near Nuvali and my commute ended up being 45 minutes from my door to Ayala Triangle, not bad considering friends over in Quezon City can have that commute to the same location.
Since I built, 2 supermarkets and 2 malls have opened down the hill. A new SM center will open up the hill. Both 15 minutes away. UP will open a Medical Center next year. Asian Hospital is 20 to 25 minutes away with US standard doctors and care. So things are developing nicely here.
So lets talk about real estate people. Many of you get some flyer put in your hand in some mall somewhere, or as in my case, get incessant texts from some mysterious person trying to get you interested in some new new new development that sounds too good to be true.
Here are some things to consider:
- Most flyer hander outers are strictly commission type sales folks that went to some class somewhere on how they will get rich doing this. They get from 1 to 5 percent of the sale if the deal closes. So this is also why you see so many pretty girls as sales folks. Why work in a call center when you could make as much closing some deal?
- They all see Expats as easy targets. They are rich in their eyes, and would buy something at the drop of a hat. Well not exactly true. You can buy a condo in a development with 49 percent ownership by Expats, you can buy a house if you are married to a Filipina or you are a Filipino yourself, and technically you can buy a house if you had the asset under your own corporation (however you better be SURE your corporation is legit and you are making money to pay the note from the Corporate P&L, otherwise you can get arrested for operating a shell investment)
- There are plenty of ads in the newspapers and online for real estate. Unless you are dealing with a board certified real estate agent or a direct representative of a actual land company (Rockwell Land, Ayala Land, Filinvest, or that level of company) that has an ID and a professional certification card (which they have from the Republic) be completely suspect. If you don’t have that, get an attorney to close any transaction.
Those companies by the way are very professional, Don’t get me wrong, I like them, in fact I know the CEO of one of them and is a great guy and is building things that actually last as well and tries to improve the look and feel of real estate in this country. It’s the scammers that pretend they are working for someone you have to watch out for.
Just because someone claims they have a title to a piece of property, DON’T believe it. Let me explain, there are scammers, here is how they do it:
They get a copy of a title (claiming to be investigating a transaction with the title office here) from someone trying to sell a property. The supposed agent acts like a buyer and wants to do a title search, so they ask for a copy of the title to do the title search check and “will get back with them” as soon as they are done.
They run around like they actually have the authentic title and are representing a seller (which they really aren’t), getting you to put down a down payment as good faith money pending closing. DON’T unless you are dealing through your own attorney or inside the office of a real land company as mentioned before, and even then, check ID to make sure they are legit IN the office before doing so. Yes, scammers try to represent themselves as legit employees and even will go to the lengths of showing up at a Land seller location, then take you out to lunch or whatever. Oh, the scams they play here….
It can take 30 days to 6 months or longer to change the actual owner of a title on a lot due to overworked and understaffed land offices here. Which means that someone can run around with a title and sell the same piece 3 or 4 times to different people in the interim before anyone realizes it is going on.
There was a case recently (and check the banner on the Santa Rosa / Tagaytay Road just before the University to see their warning) where the Adventist University of the Philippines had a developer begin construction on land the school owned.
The school went to court and had a court order barring it but the developer thought they had bought land on a legit title from AUP, but the University didn’t even know it was going on. I am sure the “agent” that did all this was long gone before anyone was aware. And probably the developer was already preselling lots who knows who paid money up front on something no one owned.
Make sure the land you buy has power on it and that Meralco or whatever power company you are using has agreed to provide power to you. Remember this aint the US or EU and that power capacity is determined by the Power Company itself, so just because a line is there, it doesn’t make it certain that they can provide power on that line. Their engineering department can look at your proposed use (100 amp or in my case 300 amp panel) and tell you whether it is available. Otherwise it can get real expensive if you have to pay part of the cost of bringing in additional line power or transformers to an area. BEWARE.
Now lets move on to building your love nest.
Contractors are in all shapes and sizes. So is their work. Drive around a village, and look at what is being built and the actual quality of their goods.
They cut corners in various areas:
- Minimal standard materials. Works yes, lasts a long time… uh no
- Trust me the big boys are just as bad as the small fry. You see lots of places that look great when they are built and the inside materials, toilets, floor tile, etc are worn out in 2 to 5 years. Don’t use cheap faucets, toilets, bath tubs, steel water tanks vs stainless, spot type water heaters from Chinese Suppliers, local tile vs Spanish Tile, etc.
Specify exactly what you want in a contract and as Ronald Reagan used to say “Trust but Verify”
- Using manual labor instead of machinery, in other words, mixing cement by hand instead of using a truck of 3000 psi ready mix.
Houses are normally hollow block walls with reinforcing bars in them. Beams are reinforcing bars with boxes built around them and concrete poured. I built my house with solid concrete with rebar in walls because I found the quality of hollow block work is somewhat lacking and the houses tend to be hot in the afternoon sun. My return on cooling costs offset the higher materials costs.
- Contracting local labor. Just because someone has the tile of “Mason” this may mean they person mixed mortar on their last job. Your Tile Setter may have cut lumber in his last job, so he can cut a straight line, but can he fit a floor so the tiles are even?
- The construction supervisor may have experience and will oversee the job, his team may be severely lacking. You have to be on site every day watching and pointing things out, otherwise you may be paying for a group of slackers spinning in circles.
In my village, some horror stories had been:
- A 6 month constuction turned into 18 months of hell. They couldn’t get the workers to move fast, things were in serial construction mode, one facet at a time so delays, delays, delays.
- Hollow block walls that has a reasonable gap between blocks at one end, and almost a ¾ inch gap at the other. Cracks will appear as the house settles. Who is to blame here? A quick coat of plaster as the finish coat before the new owner shows up and no one will know… Happens all the time.
- Cheap hollow block that is locally made, as in … right down the road instead of at a reputable supplier. Hollow block that crumbles later. If you see a pile of hollow block at a site, and see it crumbling into dust as it is stacked up or moved, be suspect!
- Cheap roofs. The construction technique here is provide as cheap a roof as possible, which can mean anything from galvanized metal that could last a couple of years to concrete tiles, which will last longer. Remember most roofs need an underlayment under them here because of heavy rains during typhoons. If you don’t have that, then expect leaks and trips up to the roof with sealer very soon after you move in.
- Undersized piping. Its cheaper to run ½ inch pipe than ¾ or 1 inch. Your resulting water pressure will be lower. Get larger pipe. Also they use either high pressure PVC (colored white which is imported from Germany normally) or the blue local stuff. The Blue PVC cant handle high pressure over long periods without leaking at fittings, so don’t use it if you have multi story houses, especially when it may be buried in foundations or walls during construction, a nightmare to fix later.
- Undersized water pumps. If you have water going to 3 bathrooms or more, and 2 stories of building, better have a pressure tank to provide reliable water pressure. Mine is 70 psi at the faucet. I have a 1/5 hp pump and an 85 gallon pressure tank to hold pressure in my house. I can run washer, all faucets and not one cold splash with someone flushing a toilet. Go cheap and better get a tabo and bucket ready, because someone in the house will be lacking when the kids, wife, yaya, etc end up using showers at the same time.
Specify what you want for roofs, and the roof truss has to be able to support it. That could be anything from local coconut lumber to reinforced concrete beams, all according to your price range.
Make sure you discuss with an architect, either with the construction company or one you may hire. These services are pretty cheap here in the Philippines.
Labor for construction runs from anywhere at 350 PhP per man day for a beginner laborer to 800 PhP per man day, depending on the skill. The average is somewhere in the range of 80 percent of labor is in the 400PhP per day and 20 percent is higher skills as mentioned before. In other words, they throw bodies at a problem.
Managing quality is up to you.
Obtaining quality supplies.
My experience was I saved a ton of money compared to an all completed, here sign the contract house. About 50 percent savings buying the interior furnishings, toilets, doors, door stops, handles, faucets, bathtubs, security lights, etc from my supplier instead of letting the contractor provide and marking it up. Yes you can get US quality fixtures here at Home Depot, CW Home Center and a few other places. Kohler fixtures, American Standard toilets, Swage Locksets, Panasonic Wide switches and switchplates, GE breaker boxes, to name a few.
Go find the manager and get a discount on all of the things you need, they will even send people around with you in the store jotting it all down and you will get 15 percent or more discount off their line items with an itemized list prices. I have records of everything I bought. And yes, they will deliver to your site when you need it. I had things shipped in phases instead of having things mysteriously disappear during construction. Having a relationship with a manager you can go to in the store ensures you always get your discount, which was higher than any of the frequent shopper cards they flaunt so much in their stores. I beat that discount by 8 to 30 percent at any given purchase. That’s a lot of SMB!
Overall, I am very satisfied with my house and construction. I know mine will last for decades and so far has weathered well, having survived 8 typhoons and lots of rainy season weather.
Now not all go to the extent I went through, as always you can buy a package house in some development and have neighbors 10 feet away from you, but I had a little better in mind. A little extra planning and you too can have twice the house a developer wants to sell you for ½ the price. Its all up to you, and this was my experience.
Buy from a developer? If you don’t want to manage a project and want the tradeoff of reputable company vs I don’t know where to begin, by all means. I mentioned some companies that are legit. Contact them directly, they have ads and billboards all over the place, but don’t deal with some know-nothing flyer hander outer you may come across.
Good luck to all you in your future home building.