05/09/2025
THINK BEFORE YOU BUY A HOUSE & LOT from a Developer
AVOID REAL ESTATE SCAMS
CC: Atty. Pagtolon-an
🏘️Before You Buy
1. Check Developer’s Legitimacy
- Verify if the developer is registered with Department of Human Settlements and Urban Development (DHSUD). Ask for their License to Sell (LTS) for the specific project. If they have no LTS, of course that is a big RED FLAG! 🚩
2.Research the Developer’s TRACK RECORD
- Check previous projects: Were they completed? On time? With quality?
- Look for reviews, complaints, and news reports online. You can join Facebook groups of buyers for the developer's previous projects and check out everything there. If there are so many complaints vis-à-vis good comments, that is a huge red flag! 🚩
3. Verify Property Title & Ownership
- Make sure the land is titled and in the developer’s name (not mortgaged without disclosure). Ask from the developer's agent. It is your matter of right as this is part of your due diligence when buying.
-Ask for a certified true copy of the title from the Registry of Deeds to cross-check. If title to the land being developed and being sold individually is not registered under the developer's name, that is, without a doubt, a red flag! 🚩
4. Check Zoning & Permits
-Ensure the project has approved subdivision/condominium plans and development permits.
-Check if the land classification has already been reclassified and converted to residential. If not yet, that is a major red flag. 🚩
🏡During the Buying Process
5. Demand Clear Contracts
- Review the Contract to Sell and Deed of Sale carefully. If they do not give you a copy of the signed Contract to Sell or Deed of Absolute Sale, say, for more than three (3) months from its ex*****on, or there are no contracts at all even if you already paid, that is a super major red flag! 🚩
-Watch out for clauses on refunds, penalties, turnover, and hidden charges.
-Make sure total contract price, payment terms, and delivery date are clear.
-Get a copy of Master Deed and Declaration of Restrictions. Have these explained to you by the Developer's broker or salesperson. If they do not have a copy of a Master Deed and Declaration of Restrictions, that is a red flag! 🚩
6. Pay Only Through Official Channels
- All payments should be receipted and preferably through bank or developer’s official account. Avoid giving cash directly to agents/brokers without an official receipt. If the broker insists that the money should be given to him, that is a red flag! 🚩
-Ask for BIR approved official receipts for each payment. Also, they should let you sign BIR forms for the payment of the taxes withheld by them as regards the purchase of the property either in installment or in cash. If they do not issue Sales Invoice or Official Receipts or if there are no taxes being withheld, that is a super red flag! 🚩
7. Check Accreditation of Broker/Agent
- Deal only with a PRC-licensed real estate broker or accredited salesperson. Ask for their PRC ID or DHSUD ID. If the agent has so many reasons that he cannot show you his license, that is a red flag! 🚩
(Some scammers pose as "marketing officers" but are not licensed. Under PD 957, salespersons and brokers of developers should be licensed, accredited and registered with the PRC and DHSUD.)
🏠 Before Turnover after Fully Payment either in cash or bank financing
8. Inspect the Unit Before Acceptance
- Do a punch list inspection: check structure, finishes, electrical, plumbing. Don’t sign the acceptance if issues are not corrected. If they insist you sign before they rectify the issues, that is for sure a red flag! 🚩
9. Secure Taxes and Fees Records and ask for DOAS
- Ensure transfer fees, registration fees, and real property taxes are properly paid. You are only bound to pay the real property tax a year after the property has been turned over to you. If they cannot give you a copy of receipts for the payment of these taxes especially the RPT, that is a major red flag! 🚩
Tip: If unsure, consult a real estate lawyer or licensed real estate service practitioner before signing or paying anything. A few thousand pesos on due diligence can save you millions.
