Real Estate Service Coach [RESC]: October 2009

10/27/2009

Professional Tax in Real Estate Service

This article is actually a continuation of my blog entitled How to Start Up a Broker's Office. This tax guide is very useful to all professionals in the Philippines including us in the Real Estate Service such as Salespersons, Brokers, Appraisers, and Consultants. Last May 2009, I personally went to the Taxpayer Information and Education Division of the Bureau of Internal Revenue to research this information. They gave me a printed material called Quick and Easy Primer on Paying your Taxes which was printed under the assistance of Economic Policy Reform and Advocacy (EPRA), US AID, Ateneo de Manila, and Transparency and Accountability Network.
Who are the Professionals according to the BIR?

Professional, classified as self-employed, refers to an individual or a group, practicing his or their profession or calling, with or without license under a regulatory board or body.
What are the Registration Requirement?

Documentary Requirements for Individuals

Birth Certificate or any documents showing name, address, and birth date;
Mayor's Permit;
Certificate of Business Name to be submitted prior to issuance of the Certificate of Registration or BIR Form No 2303;
Professional Regulation Commission ID;
Payment of Professional Tax Receipt (PTR) from the local government.

Documentary Requirements for Corporations

Certificate of Registration with the Securities and Exchange Commission;
Mayor's Permit; and
Partnership Agreement.

Procedures

Step 1. Accomplish Application for Registration --- BIR Form 1901 (for individuals) or 1903 (for corporations or partnerships) with the applicable attachments, and submit to the revenue District Officer (RDO) having jurisdiction over the principal place of business (for newly registered Professionals).

Step 2. Pay the registration fee using BIR Form 0605 (Payment Form) to any Authorized Agent Bank (AAB) located within the RDO. The professional should also register and pay the corresponding registration fee for each separate or distinct establishment.

Step 3. Attend the required taxpayer's briefing at the RDO before the release of the BIR Certificate of Registration (COR) or BIR Form No. 2303, which reflects the returns that must be filed and the taxes to be paid. Note: The COR must be conspicuously displayed in the pProfessional's place of business.

Step 4. Apply for Invoices/Receipts using BIR Form No 1906 - Authority to Print. Note: An "Ask for a Receipt" Notice (ARN) must be posted conspicuously in the Professional's business establishment.

Step 5. Register books of acconts (Journal/Ledger/Subsidiary Professional Income Book and Subsidiary Purchases/ Expense Book) and have them stamped bythe RDO where the Professional is registered.

Step 6. Update registration information, if needed, using BIR Form No. 1905 (change of registered address, personal exemptions, additional tax types, etc.). Submit this at the RDO having jurisdiction over the plave of business. Reminder: the BIR conducts a Tax COmpliance Verification Drive (TCVD) or tax mapping operations to monitor if the taxpayer is complying with his registration requirements particularly on COR, ARN, and books of accounts.

What are the Bookeping Requirements?

Professionals are required to maintain books of accounts using any acceptable method of accounting (accrual or cash basis) in a consistent manner. The same shall be preserved within the prescriptive period (3 years from the close of taxable year) for post audit examination.

For professionals whose quarterly revenues exceed on hundred fifty thousand pesos (P150,000), they shall bahe their books of accounts audited and examined by an independent Certified Public Accountant (CPA) in order to give an independent pinion regarding its financial condition. In addition, their annual returns shall be accompanied with certified balance sheets, profit and loss statements and other relevant documents.

What are the Invoicing Requirements?

Receipts or sales or commercial invoices shall be serially numbered.
Among other things, the name, business style, the TIN and business address of the Professional shall be shown.
Receipts or invoices shall be issued by the Professional for every payment received.
The original of each receipt or invoice shall be issued to the client at the time the transaction is affected and the duplicate shall be preserved in the place of business for a period of three years from the close of the taxable year.

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Example:

Receipt # 08676
Juan de la Cruz, Real Estate Broker
Room 1, Listing Agents Building, 21 Starboy Street, Quezon City
TIN: 111-111-111-000 VAT
Customer Name: Jane Doe
Address: 34 Adamson Street, Sin City
Date of Transaction: 05/07/09
Professional Fee: P750.00
VATable Transaction: P750.00
Total:P750.00
12% VAT: P90.00
Total Account Payable: P840.00
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What are the BIR Requirements?

1. Registration Fee
An annual Registration Fee of P500.00 shall be paid on or before the last day of January every year after the initial registration.

2. Computation of Taxes Due
2.1. Income Tax
2.1.1. Tax Rate for Individuals - 5-32%
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Example:
How to Compute the Individual Income Tax (Example)

Gross Receipt: P1,000,000
Less Allowable Deductions*: (600,000)
-Personal Exemptions: (32,000)
-Additional Exemptions, 4 children x P8,000:(32,000)
Taxable Income: 336,000
Tax Due (based on tax table in BIR Form 1701): 75,800
Less: Creditable Withholding Tax (P400,000 x 15%): (60,000)
Income Tax Payable: P15,800
*A taxpayer engaged in business or in the practice of profession shall choose either optional or itemized deduction.
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Method of Allowable Deductions

1. Optional Standard Deduction
There shall be allowed as deduction a maximum of 40% of the gross income. A taxpayer who opts of this deduction need not submit the Account Information Form (AIF)/Financial Statements. The 40% is based on the Republic Act 9504 effective July 6, 2008 (it used to be 10% in the previous regulation).

2. Itemized Deduction
There shall be allowable as deduction from the gross income all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on or which are attributable to the development, management, operation, and/or conduct of the trade, business or exercise of profession including a reasonable allowance for salaries, travel, rental, and entertainment expenses.

The following are the itemized deductions:

Salaries, Wages and other employee's benefits.
Fringe benefits.
SSS, GSIS, Medicare, HDMF and other contributions.
Commission.
Outside Services.
Advertising.
Rental.
Insurance.
Royalties.
Repairs and Maintenance.
Representation and Entertainment - limitation is 1/2% of seller goods (based on net sales), or 1% if seller of service (based on net revenue).
Transportation and Travel - here and abroad.
Fuel and Oil.
Communication, Light and Water.
Supplies
Interest - paid or incurred during the taxable year of indebtedness. Provided: Interest Expense shall be reduced by an amount equal to the following percentages of interest income subject to final tax: 42% - July 1, 2005 to December 31, 2008.
Tax and Licenses
Losses -- actually sustained during the taxable year and not compensated for by insurance or other forms of indemnity shall be allowed if incurred in trade or business.
Bad Debts -- actually ascertained to be worthless and changed off within the taxable year.
Depreciation.
Amortization and Intangibles.
Delpetion.
Charitable Contributions. Individual - 10% of Net Income before Charitable Contributions.
Research and Development.
Amortization of Pension Trust Contribution.
Miscellaneous.
Professional Fees.
Insurance Expenses.
Light and Power, Telephone and Telegraph.
Miscellaneous Expenses.

Sufficient Evidence of Itemized Deduction (Expenses)

Official Receipts (OR)
Cash/Sales Invoice
Payroll
Vouchers
Bank Statements
Debit/Credit Memo

2.1.2. Tax Rate for Corporations / Partnerships - 35%

2.2. Expanded Withholding Tax (EWT) rate to be used by Withholding Agents of Professionals:

15% if totalprofessional fees exceed P720,000.00 for the current year; or
10% if the total professional fees total P720,000.00 and below the current year.
To determine the applicable tax rate to be applied/withheld, every Professional shall periodically disclose his gross income for the current year to the BIR Regional Office by submitting a Notarized Sworn Declaration in three (3) copies. Note: The Expanded Withholding Tax being deducted by the withholding agent is merely an advance payment and NOT THE FULL PAYMENT of income tax due, if any, from the Professional.

2.3. Business Taxes
Business Tax rates may either be:

2.3.1. Value Added Tax (VAT) - which is 12% if the gross professional fees exceed P1,500,000.00 for a 12 month period; or

2.3.2. Percentage Tax (PT) or NON-VAT -- which is 3% if gross professional fees total P1,500,000.00 and below for a 12-month period.

VAT Receipt from Producer
The total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the VAT; provided that:

The amount of tax shall be shown as a separate item in the invoice or receipts.
Excess Input Tax is subject to 70% of the Output.

How to Compute the VAT?

Formula:
Total Output Tax or Total Sales x 12%
Total Input Tax or Total Purchase x 12%

Equals VAT Payable

Eample:
Total Receipts (inclusive of VAT): P112,000
Less: 112,000/1.12 x 12%: P12,000

VAT Payable: P100,000
How to Compute the Percentage Tax?

Net Amount Received: PhP xxx
Add: 10% Expanded Withholding Tax: P xxx
Total Professional Fee: P xxx
Multiply by 3% percentage tax: P xxx
Percentage Tax Due: P xxx

Where can a Professional File and Pay the Tax Due?

The return shall be manually filed and paid with any Authorized Agent Bank (AAB) within the Revenue District Office (RDO) where the professional is registered or required to register. In the absence of an AAB, with a Revenue Collection Officer (RCO) or duly Authorized City or Municipal Treasurer who shall issue a Revenue Official Receipt (BIR Form No. 2524).

In case there is no payment to be made, the return shall be filed with the RDO where the professional is registered.

E-Filing and E-Payment can also be made with the BIR's Electronic Filing and Payment System (eFPS) in accordance with the provisions or existing applicable revenue issuances and Globe G-Cash (with threshold amounts).
REMINDER: The Professional needs to file a return even when there is no payment to be made.
NOTE: Third Party Information. The BIR links up with government and other organizations to use their database.
REMINDER: Under the Run After Tax Evaders (RATE) program, the BIR and DOF investigate and prosecute individuals and/or entities engaged in tax evasion.
REMINDER: The BIR's Integrated Tax System (ITS) detects non-filing or non-payment of tax returns by a taxpayer.
What are the Tax Forms and Due Dates?

1. Payment Form (individuals/corporations/partnerships)
Form 0605 On or before the last day of January every year after the initial registration.

2. Income Tax for Individuals
1701Q - 1Q - Jan-Mar - April 15
1701Q - 2Q - Apr-June - August 15
1701Q - 3Q - Jul-Sep - Nov 15
1701 - Final - Jan-Dec - April 15 Following Year

3. Income Tax for Corporations or Partnerships
1702Q - 60 Days end of quarter
1702 - Caloendar - April 15 Following Year
Fiscal - 15th day of the 4th Month following the end of the taxable year.

4. Value Added Tax (VAT)
2550M - 20th day of succeeding month.
2550Q* - 25th day of the month following the end of a particular quarter
*Note: together with the Summary List of Sales and Purchases where total sales exceed PhP 2.5M or total purchases exceed PhP 1M.

5. Percentage Tax
2551M - 20th day after the end of each month

BIR Contact Center: Tel 981-888
Website: http://www.bir.gov.ph/

If there is anything else important that I forgot to include in this article, or if you experienced a real estate transaction that is anomalous, scam, fraudulent scheme that you want me to document and expose for others to be warned, or if you want to donate to the war chest of real estate consumer rights advocacy, please feel free to email me at JohnPetalcorin@Gmail.Com. If you want to comment about this article, there is a provision for this purpose that you can find below.
Thank you so much for visiting my site. May God Bless You!

10/15/2009

Career Overview in Real Estate Service in USA - Part 1 of 2

WORK DESCRIPTION OF REAL ESTATE AGENT, BROKER,and APPRAISER ACCORDING TO U.S. STANDARDS - Part 1 of 2

(Reference: 1998-1999 Occupational Outlook Handbook, USA)

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Go to PART 2

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Significant Points

* Real estate sales positions should continue to be relatively easy to obtain due to the thousands of people who leave this occupation each year.

* Real estate agents and brokers must be licensed in every State and in the District of Columbia.

Nature of the Work

The purchase or sale of a home or investment property is not only one of the most important financial events in peoples' lives, but one of the most complex transactions as well. As a result, people generally seek the help of real estate agents, brokers, and appraisers when trying to buy, sell, or establish a price for real estate.

Real estate agents and brokers have a thorough knowledge of the real estate market in their community. They know which neighborhoods will best fit their clients' needs and budgets. They are familiar with local zoning and tax laws, and know where to obtain financing. Agents and brokers also act as an intermediary in price negotiations between buyers and sellers. Real estate agents are generally independent sales workers who provide their services to a licensed broker on a contract basis. In return, the broker pays the agent a portion of the commission earned from property sold through the firm, by the agent.

Brokers are independent business people who, for a fee, sell real estate owned by others and rent and manage properties. In closing sales, brokers often provide buyers with information on loans to finance their purchase. They also arrange for title searches and for meetings between buyers and sellers when details of the transactions are agreed upon and the new owners take possession. A broker's knowledge, resourcefulness, and creativity in arranging financing that is most favorable to the prospective buyer often mean the difference between success and failure in closing a sale. In some cases, agents assume the responsibilities in closing sales, but in many areas, this is done by lawyers or lenders. Brokers also manage their own offices, advertise properties, and handle other business matters. Some combine other types of work, such as selling insurance or practicing law, with their real estate business.

Before showing properties to potential buyers, the broker or agent has an initial meeting with them to get a feeling for the type of home they would like and can afford. Often, an agent or broker uses a computer to generate lists of properties for sale, their location and description, and to identify available sources of financing. Traditionally, they then take the clients to see a number of homes that are likely to meet their needs and income. Increasingly, however, agents and brokers are able to use computers in their office to give clients a "virtual" tour of properties in which they are interested, allowing them to look at various types of images of the property, including interior and exterior images and floor plans.

Because buying real estate is such an important decision of a person's life, agents may have to meet several times with prospective buyers to discuss available properties. In answering questions, agents emphasize selling points likely to be most important to the buyer. To a young family looking at a house, for example, they may point out the convenient floor plan and the fact that quality schools and shopping centers are close by. To a potential investor seeking the tax advantages of owning a rental property, they may point out the proximity to the city and the ease of finding a renter. If bargaining over price becomes necessary, agents must carefully follow their client's instructions and may have to present counteroffers in order to get the best possible price.

Once the contract has been signed by both parties, the real estate broker or agent must see to it that all special terms of the contract are met before the closing date. For example, if the seller has agreed to a home inspection or a termite and radon inspection, the agent must make sure this is done. Also, if the seller has agreed to any repairs, the broker or agent must see they are made. Increasingly, brokers and agents handle environmental problems by making sure the property they are selling meets environmental regulations. For example, they may be responsible for dealing with problems such as lead paint on the walls. While many details are handled by loan officers, attorneys, or other persons, the agent must check to make sure that they also are completed.

There is more to an agent's and broker's job, however, than just making sales. Because they must have properties to sell, they may spend a significant amount of time obtaining "listings" (owner agreements to place properties for sale with the firm). When listing property for sale, agents and brokers compare the listed property with similar properties that have been sold recently to determine its competitive market price.

Most real estate agents and brokers sell residential property. A few, usually in large firms or small specialized firms, sell commercial, industrial, agricultural, or other types of real estate. Each specialty requires knowledge of that particular type of property and clientele. Selling or leasing business property, for example, requires an understanding of leasing practices, business trends, and location needs. Agents who sell or lease industrial properties must know about transportation, utilities, and labor supply. To sell residential properties, the agent or broker must know the location of schools, religious institutions, shopping facilities, and public transportation, and be familiar with tax rates and insurance coverage.

Because real estate transactions involve substantial financial commitments, parties to the transactions may seek the advice of real estate appraisers, who are objective experts and do not have a vested interest in the property. An appraisal is an unbiased estimate of the quality, value, and best use of a specific property. Appraisals may be used by prospective sellers to set a competitive price, by a lending institution to estimate the market value of a property as a condition for a mortgage loan, or by local governments to determine the assessed value of a property for tax purposes. Many real estate appraisers are independent fee appraisers or work for real estate appraisal firms, while others are employees of banks, savings and loan associations, mortgage companies, government agencies, or multiservice real estate companies.

During a property inspection, real estate appraisers investigate the quality of the construction, the overall condition of the property, and its functional design. They gather information on properties by taking measurements, interviewing persons familiar with the properties' history, and searching public records of sales, leases, assessments, and other transactions. Appraisers compare the subject property with similar properties for which recent sale prices or rental data are available, to arrive at an estimate of value. They may also estimate the current cost of reproducing any structures on the properties and how much the value of existing structures may have depreciated over time. Appraisers must consider the influence of the location of the properties, potential income, current market conditions, and real estate trends or impending changes that could influence the present and future value of the property. Depending on the purpose of the appraisal, they may estimate the market value of the property, the insurable value, the investment value, or other kinds of value. Appraisers must prepare formal written reports of their findings that meet the standards of The Appraisal Foundation.

Real estate appraisers often specialize in certain types of properties. Most appraise only homes, but others specialize in appraising apartment or office buildings, shopping centers, or a variety of other types of commercial, industrial, or agricultural properties. The amount of time necessary to do an appraisal varies by the type of property—for a residential property it may take a week, whereas for a commercial property, several months may be needed to complete the appraisal.

Working Conditions

Because of advances in telecommunications and the ability to retrieve data on properties over the Internet, a growing number of real estate agents, brokers, and appraisers work out of their homes instead of offices. Even with this convenience, much of their time is spent away from their desk—showing properties to customers, analyzing properties for sale, meeting with prospective clients, researching the state of the market, inspecting properties for appraisal, and performing a wide range of other duties.

Agents, brokers, and appraisers often work more than a standard 40-hour week; nearly 1 of every 4 worked 50 hours or more a week in 1996. They often work evenings and weekends to suit the needs of their clients.

Employment

Real estate agents, brokers, and appraisers held about 408,000 jobs in 1996. Many worked part time, combining their real estate activities with other careers. Most real estate agents and brokers were self-employed, working on a commission basis.

Most real estate and appraisal firms are relatively small; indeed, some are a one-person business. Some large real estate firms have several hundred real estate agents operating out of many branch offices. Many brokers have franchise agreements with national or regional real estate organizations. Under this type of arrangement, the broker pays a fee in exchange for the privilege of using the more widely known name of the parent organization. Although franchised brokers often receive help in training salespeople and in running their offices, they bear the ultimate responsibility for the success or failure of the firm.

Persons who are real estate agents, brokers, and appraisers are older, on average, than those in most other occupations. Historically, many homemakers and retired persons were attracted to real estate sales by the flexible and part-time work schedules characteristic of this field and may enter, leave, and later reenter the occupation, depending on the strength of the real estate market, family responsibilities, or other personal circumstances. Recently, however, the high startup costs associated with becoming an agent have made some look elsewhere when looking for part-time work. In addition to those entering or reentering the labor force, some transfer into real estate jobs from a wide range of occupations, including clerical and other sales jobs.

Real estate is sold and appraised in all areas, but employment is concentrated in large urban areas and in smaller, but rapidly growing communities.

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Go to PART 2

Guide to Property Folder Preparation

All properties that are offered in the market should have a Property Folder. Offering properties for sale without property folder, it is like selling canned goods without labels.

A Property Folder is a real folder that contains full-disclosure paperwork which proves two things, that: (1) the property is properly documented, and (2) the person who is offering it is the right person who has the authority to offer the property.

The Property Folder must be organized BEFORE a property is offered for sale in the market. The offeror of the property must always be ready to present the folder to ANYONE who wants to see it, whether the requestor is another Agent or a Potential Buyer.

Who should organize the Property Folder?

Ideally, the property owners must be the ones who will organize their own property folder. But of course, the Listing Agent can do it for the seller.

What is the workload in Property Folder preparation?

There are two parts of the property folder preparation workload.

(1) CHECKLIST PREPARATION - The workload includes an interview with the property owner and a read through the available documents to come up with a Checklist of documents that should contain the Property Folder.

(2) GATHERING OF DOCUMENTS - The workload includes gathering of documents to complete the Checklist.

How much is the fee for the workload?

Some agents call this workload "Documentation Service", but it is strange that they do this only when the sale is consumated. Most Listing Agents I know are not charging fees in preparing property folders because they consider the service already paid by the commission. However, I think real estate brokers should charge professional fees this service because no agent is sure yet if he/she can sell the property. Property folder preparation is a lot of work, and ideally, it must be done before exposing the offer to the market. Agents spend days and trips to various government agencies just to complete a folder. So, it is just fair if the property owners pay for this service in advance.

What is your advice if property owners prefer to do a self-help in property folder preparation?

Of course, self-help is what we always wanted. But the property owner should go through weeks of study to know everything a Broker knows about documentation. If self-help is what the customer wants, you may advise the customer to study ALL information in the REIBS.COM Website, which contain links to all instructional information every Broker must know. The REIBS.COM Online Library is open and free, and no log-on is required.

What are the Four (4) Types of Folder Tags?

Color coded tagging is a unique innovation of the Bank of the Philippine Islands for the forclosed properties that they sell. So I will just adopt their techinique, plus a minor addition.

GREEN TAG - Neat documents, no issues. These properties are very easy to sell.

YELLOW TAG - With issues, title has cloud, but not yet in court. Some of these kinds have liens and encumbrances. These propertise must be offered at discounted price, and need a lot of guarantees, warranties, and are difficult to sell. It requires a lot of work for the Broker.

RED TAG - Property ownership is ongoing judicial proceedings. These properties are cheap but almost impossible to sell.

WHITE TAG - advertiser/owner has no property folder or lacking basic document. I call this "selling of canned good without label". White Tags are supposed to be ignored by intelligent potential buyers. These are types of properties that are normally carried by unregistered real estate agents, and even by licensed agents who have "shady" operation. Various real estate agent anomalies surround these white tags - taking a trip to see these white tags is not advisable.

What are the Required Documents?

BASIC - the basic contents of the Property Folder are:

Certified true copy of title, stamped by the Registry of Deeds.

Certified true copy of tax declaration, stamped by the Assessors Office of the City Hall.
Location Map and pictures.
Owner's offer to sell stating his/her initial asking price.
Appraisal Report - any seller could wild-guess the asking price, but it is not advisable and there is a lot of reasons why. The seller must get an appraiser from IPREA or PARA (see my favorite links). Alternatively, a property owner may use as reference an appraisal report of any similar property in the area as long as the recycled report is not more than two years. Please advice the property owner to ask the officers of his/her Homeowners Association if they know someone in the neighborhood who had their property appraised for the last two years.
Photocopy of the ID of the Seller.

CASE-TO-CASE - the other important contents varies on a case-to-case basis, depending on the applicability, such as the following:

If there is a Broker involved - the folder requires Authority to Offer for Sale granted to a Licensed Broker and photocopy of the license and registration of the Broker.

Notarized Power-of-Attorney granted to a Non-Broker Agent who is not expecting a share of the commission. If the seller is overseas, the Power-of-Attorney should be notarized a a Philippine Consular Officer.
Marital Consent - this is always required if the property owner is currently married.
Notarized Extrajudicial Settlement - this is always required if there are multiple heirs who are entitled a share if the property is sold. Real Estate Brokers DO NOT do any assistance in this document that is a job of another profession we call LAWYERS.
Statement of owners of adjacent properties - the owners of the adjacent properties surrounding the property on board have the first right to buy the property. You must always ask the adjacent owners first and have them sign a statement that they are not interested to buy the property. Because you would be wasting your time and effort to find buyer everywhere, only to find out in the end that the adjacent property will exercise their right to buy.
Statement of Current Tenant - the current tenant have this thing they call "right of first refusal". It is something similar to the right of adjacent properties. So, get a statement that they are not interested to buy the property.
Owner's Statement of Improvements that is undeclared in the latest Tax Declaration - this is very important to determine if there are Real Property back-charges that the City Hall will charge for undeclared improvements. Back charging can only go back to the last 10 years.
Notarized Corporate Resolution to Sell the Property - this is very important if the owner of the property is a corporation. This document will prove that the corporation has indeed officially approved that they are going to sell the said property.
Mortgage Contract and Bank's Statement of the Status of Mortgage - you can get a current statement of account from the bank.
Foreclosure Documents - this is normally available with the legal department of the bank if the property went through a foreclosure proceeding in court.
Statement on liens, encumbrances, tenants, and cloud of title - the property owner must prepare a statement that discloses these information.
Homeowners Association By-laws and monthly association dues rates -- this can easily be secured by the Property Owner from the office of the homeowner's association.
Project Profile -- HLURB License to Sell, available subdivided lots, amortization proposal, developer profile, etc..

If there is anything else important that I forgot to include in this article, please email me.

If you want to comment about this article, there is a provision for this purpose that you can find below.

Thank you so much for visiting my site. May God Bless You!

10/14/2009

How to start-up a realty office

Many Brokers requested me to conduct a personalized tutorial on how to set-up an office in compliance to Section 33 of the Philippine Republic Act 9646. I have become too busy I can no longer accommodate to coordinate a lecture schedule.

To remedy my shortcomings and in the interest of public service, I have instead decided to publish this Blog containing a checklist of setting up a private real estate broker's office. This is my documentation based on experience. This article will have two parts. The second part or continuation is entitled Tax Guide for Real Estate Professionals .

Any Broker who is into independent private practice must have an office (principal place of business). Any brokerage office must have a licensed broker. Remember, business transactions can be done anywhere, but all broker must have an office address where customers and government authorities can find just in case they will check the existence, business registration, facilities, and files of the real estate broker.

The initial set-up cost of a fully equipped office is around P300T-P500T. The operating cost is around P250T a year plus salaries expense. You can earn more than these usual costs if you have efficient marketing machinery. It is also important that you support the advocacy for strict implementation of RA 9646 so we can have level playing field among the professional players in the real estate service sector. To ensure that your office will become prosperous, another advocacy that you also have to support is our Platform for AIPORESP.

Elements inside a Broker's Office

PROFESSIONAL LICENSE and REGISTRATION (from PRC and HLURB)
Business Name Registration Certificate (from DTI)
Mayors Business Permit (from CITY HALL)
Barangay Business Permit (from BARANGAY HALL)
BIR VAT-Registration Certificate and Accounting Journals (from BIR).
Official Receipts. This is very important! Very very very IMPORTANT! Do not operate without Official Receipt!
Office Space – it could be in a commercial/office area or in the residence of the Broker if it is a home-office concept. Privacy is very important. The Broker should be able to talk to clients and customers in privacy. A row cubicle type office of the Broker is highly discouraged. It should be an enclosed office.
Office Table and Chairs for the Broker and clients/customers.
Communication Equipment – Land line Telephone, Fax Machine, Email using Computer connected to the internet.
Printing Equipment - Printer, Photocopying Machine, Hand-Held Stamping Machine, etc.
Good ventilation or air-conditioning.
Business Signboard.
Calling Cards, Brochures, Ready-Forms, etc.
Secretary – the Broker must have a secretary especially if he is shy in collecting Professional Fees.
Membership to an Online Multiple Listing - this is the cheapest way to expose your listing to the public in an open market scenario. IPORESP will also have this facility later on called Philippine National Listing System (PNLS).
The Registration Certificates of PRC-accredited Salespersons under your control and supervision. You must display these certificates.
Fiduciary Trust Bank Account - here is where you safe-keep the money of your clients. This is also called Escrow Account.
Safe Chest or Bank Safety Deposit Box - here is where you will safe-keep the important original documents of your clients.
Motor Vehicle - a car is recommended if your clients are individuals, but a van is best if you do a mass tripping to project site. If your coverage is just within the neighborhood, a motorbike or bicycle will work perfectly fine.
Formal Office Attire - The Broker must at all times, while working, be professionally attired – barong tagalog, or long-sleeve with tie, or in western suit.
Activate your automatically a membership to IPORESP.

Lastly, you have to build your own reputation by deciding as to what type of real estate agent would you want to be! Your choices are:

Traditional Listing Agent
Non-Exclusive Buyer's Agent
Dual Agent
Exclusive Buyer Agent (EBA)

For Info: Membership to the Integrated Professional Organization of Real Estate Service Practitioners (IPORESP) is AUTOMATIC and FREE for all real estate service agent, salesperson, broker, appraiser, assessor, or consultant in the Philippines. It does not matter whether you have an organization or none, you can join IPORESP. All you have to do is complete the online IPORESP Integration Form in the IPORESP website -- it only takes 2 minutes to compete the form.

The photo below is my official place of business. My sole proprietorship company name is REIBS.COM Real Estate iNformation and Broker Services. My business name is registered with DTI and I have my own official receipt. This picture is a day in a life of an Exclusive Buyer Agent (EBA) in the Philippines. As an EBA, I don't have problem with finding buyers. My problem is finding properties that match the specification of buyers, that is why I send out communication to a broader audience to request for proposals from sellers. Office work involves conducting due diligence on proposals before presenting the clean ones to the ready Buyer.

HIGHLY RECOMMENDED cross reference: I blogged a discussion on Place of Business of salespersons and brokers at http://petalcorin.blogspot.com/2011/05/q-about-salespersons-and-brokers.html

10/13/2009

My Professional Services Menu

For Real Estate Buyers:
Exclusive Buyer Agent Service

In the Philippines, I am the first and only one broker specialized in the field of Exclusive Buyer Agent (EBA). This service is focused on protecting the interest of the buyer.

The workload includes (1) assistance finding a wide array of probable properties, (2) initial contact with sellers, (3) due diligence of property folder, (4) buyer-side counter-appraisal, (5) price negotiation, (6) property site inspection, (7) contract review, (8) closing a purchase, and (9) titling.

I provide advisories, due diligence, and background investigation about the integrity situation of real estate companies and service practitioners in the Philippines.

An Exclusive Buyer Agent service is ideal for first time home buyers. It is also highly recommended to be engaged in expropriation proceedings by Government and major land or business acquisition by Real Estate Investment Trust Corporations (REITS).

For Absentee Real Estate Owners:
Property Management Services

Property Management Service is my bread and butter. The usual clients are absentee property owners who immigrated abroad and left behind some properties in Metro Manila such as condominium or residential house.

The services is a package of the following: (1) property folder preparation, (2) signage installation and advertising to capture prospective lessees or tenants, (3) property presentation to each interested lessee, (4) facilitate the signing of lease contract, (5) periodic inspection and regular reporting to property owner about the condition of the property, (6) periodic collection and remittance of rent and maintenance of records, (7) coordinate major repairs and renovation, (8) contract termination and ejection, (9) renewal of lease contract or finding of new tenant, (10) proxy the owner during meetings of homeowners' association.

I charge one-month-rent for every accumulative year period of lease contract, or eight percent (8%) of the total income of a lease contract, whichever is higher.

For Real Estate Sellers:
Pro Bono Due Diligence Service

Pro Bono means free service, there is no need to pay. Clients who avail of this service are mostly real estate buyers, sellers, and agents.

Due diligence is free because I will only coach. It has to be the seller or his errand who will do the legwork of dealing with government offices like Registry of Deeds, BIR, and City Hall to secure the necessary documents to complete the due diligence process.

Integrity in real estate transactions is part of my advocacy under consumer protection. It is already an accepted fact worldwide that incidence of fraud is extremely high in Philippines and this scares everyone. The buyer has to exercise due diligence before closing any deal. To loosen up the scare, the sellers also have to spend extra effort in due diligence before offering their properties to the market.

The output of due diligence is a Property Folder, which contains documents about the property and its owner, duly certified as free of any form of fraud or anomalies.

If the client wants convenience and willing to pay for the errand, I can also help in making arrangement with part-timers who provide legwork services for a fee, most of them call this "documentation service".

Many brokers use due diligence service as a bait to get a listing agreement, this makes sellers hesitate to approach a broker, especially those who are unwilling to pay broker's commission. But I am different. Being an Exclusive Buyer Agent, I don't get into listing agreement with sellers. I encourage sellers to post their property in For Sale By Owner (FSBO) Philippines.

For Real Estate Brokers:
Deadlock Negotiation

A deadlock is a stalemate of negotiation. It is normally caused by conflict of interest, conflicting information, and deviation of the negotiation procedure. My services may be hired to troubleshoot the negotiation and loosen up the deadlock. I only charge 10% of the gross broker's commission.

For Part-timers:
Service Introducer

This Service Introducer position is real estate-related but you don't need a PRC or HLURB professional registration or license for this job. The educational requirement is very flexible, however you have to be outgoing, smart-looking, and outspoken. I don't accept application. I only handpick best people I know around for this very easy yet rewarding position.

The job preparation is simple. First, you get invited. Then we meet so I can answer all your question about this position. After you get accepted during your interview, you will bring home a script and memorize a standard 2 minute talk about my services as a Real Estate Exclusive Buyer Agent. After you memorize it, we meet again so I can answer more of your questions. This position is not salesmanship, there is no need to convince the client to shell out any cash to buy any real estate or any product.

When you meet with your friends, you only need to tell them the 2 minute talk that you memorized in a casual manner and get your listeners' name, birthday, email address, and pass the information over to me. I maintain a neat database of these people that you register to me and send them birthday greetings by email and a short reminder of my services as EBA. Whenever I earn compensation from transactions with these names you register get my services, you earn gratuity for each transaction, regardless of when the transaction is completed or how frequent it is repeated.

For Politicians, Government, Cause-Oriented Groups, Concerned Individuals, and Brand Managers:
Advocacy Messages Broadcast

This is all about advocacy communication and political exhortationism. I create original short advocacy messages and broadcast them in the internet such as Facebook and Google Blogger. One high-powered message has a length of at most 420 alphaneumeric characters and spaces.

This is also ideal for Companies who wants me to broadcast my honest review of their product. Of course they have to give me a free sample of the product first.

For every P1,000, I can create and broadcast one advocacy message. So if you have P20,000 then you'll get 20 advocacy messages.

For cause-oriented groups, marami ako advocacies. Indicate mo lang kung ano gusto mo.

1. Gun Control
2. Anti-Corruption
3. Voters Education
4. Marijuana Decriminalization
5. Real Estate Professionalization
6. Bangsamoro Independence
7. Environmental Protection
8. Human Rights and Anti-War
9. Consumer Rights and Buyer Protection
10. Poverty Alleviation
11. Etc. etc.

For questions and request for services, please feel free to contact me directly. Thank you. CONTACT INFORMATION

Directory of Dormitories - Philippines

This is a useful information for students and young professionals who are looking for a place to stay away from home. Prices quoted here are not price tags, but more of a price indicator. Please contact the dorm directly for updated information and availability. If you know a Dormitory that is not listed in this article, please email me, it's free to be entered here. May God Bless You!

xxxxx

xxxxx

PLUG-IN AD

Studio-type Condo For Rent at Cityland Vito Cruz Malate Manila. Fully furnished. P10,700/month. Please read more at http://sulit.com.ph/8935173.

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MANILA CITY

MANILA MONCHERE DORMITORY 923 Bilibid Viejo (LRT Recto), Quiapo, Manila. Rooms 1 to 8 beds (3k to 6k). Contact person: Dulce/Jane Tel/SMS: 0917 328 5063, Tel: 7082 250. Website: http://www.moncheredormitory.com Email contact@moncheredormitory.com

MANILA ANGEL'S DORMITORY 5621 Miguelin St. Sampaloc, Manila Monthly Rate: PHP 2,500 Contact Person: jef Contact Number: 09156321234

MANILA MATER DEI LADIES DORMITORY 874 Centro St. (near UST, Shakey's, Goldilocks -Espana side), Sampaloc, Manila Monthly Rate: PHP 1800 Contact Person: Ms. Bernales Contact Number: 0922-5085821

MANILA LEGARDA PLACE #2327 Legarda St.,(Accross Lrt Legarda station, beside Jolibee bustillos, Yellow and Blue Bldg., Sampaloc Manila Monthly Rate: PHP 3,750.00- 6,200.00 Contact Person: Lourdes Contact Number: 7346590/7344069

MANILA ESTEBAN BOARDING HOUSE #327 Prudencio St., Sampaloc, Mla Monthly Rate: PHP 1,500 Contact Person: Cathy/Jap Contact Number: #09206531619/h:707-3407;ofis # 578-0371; 531-4535

MANILA CORINTHIANS DORMITORY 299 Sta Teresita St. Sampaloc Manila. Monthly Rate: PHP 1800 Contact Person: GEMMA Contact Number: 7340207

MANILA MALATE DORM. 2272 B Leon Guinto St.,, Malate, Manila Monthly Rate: PHP 2750-3200 Contact Person: Lydia or Irene Contact Number: (02)5216623 or (0922)8176237

MANILA MADRIGAL DORMITORY 561 Magallanes Street, Intramuros, Manila City Monthly Rate: PHP 3500 Contact Person: Ms. Jenny Sarte/Jonna Bayhon Contact Number: 5212151 or 521-1123

MANILA RESIDENCIA 729 729 Sta Potenciana St., Intramuros, Manila Monthly Rate: PHP 3000 Contact Person: Marilyn Reyes Contact Number: 523-1349

MANILA DORMITORY(LADIES) FOR REVIEWEES Espana, Manila Monthly Rate: PHP 1,900 Contact Person: Ms. Sha Contact Number: 466-6884

MANILA ST. DOMINIQUE LADIES DORMITORY 622 Dalupan St. (formerly Gastambide St.), Manila Monthly Rate: PHP 2,000 Contact Person: Ate Jazz / Arman Contact Number: 0922-4431535 / 0917-3026927

MANILA PACIFIC POD UE, CEU, Manila Monthly Rate: PHP 2200 Contact Person: Pacifc Pod Contact Number: 02- 711 2717, 02- 743 9587,0922-8182167,0922-81843

MANILA YWCA LADIES HOSTEL & DORMITORY YWCA of the Philippines, 880 UN Avenue, Manila, Manila Monthly Rate: PHP 2800 Contact Person: Neri Contact Number: 02-523-1467, 02-524-7234

MANILA CAPATI'S PLACE 1407H Cor Maria Clara and A.H. Lacson Streets, Sampaloc, Manila Monthly Rate: PHP 2000/mo Contact Person: Jojo or Kat Capati Contact Number: 09209475770

MANILA MICKY'S GIRLS DORMITORY 1202 Maceda St. Sampaloc Manila, Manila Monthly Rate: PHP 3000 Contact Person: Kramer Contact Number: 09175710623

MANILA LA CASARITA 333 San Rafael Street, San Miguel , Manila Monthly Rate: PHP 3500 Contact Person: Carlo Tolentino / Lou Ann Dela Cruz Contact Number: 735-0366/ 5180004

PARANAQUE CITY

PARANAQUE VILLA ROSARIO LADIES DORMITORY J. De Leon Street, Villa Olivarez, Sucat, Paranaque City Monthly Rate: PHP 2000.00 Contact Person: Shirley or Mary Contact Number: 8202237 or 8257119 loc. 134

PARANAQUE ANGELINOS BOARDING HOUSE Sandil St. Dela Cruz Cmpd. Sucat, Paranaque Ciy Monthly Rate: PHP Php 3,000.00 Contact Person: Michelle Nabung Contact Number: (0916) 411-8950; 973-2880

QUEZON CITY

QUEZON CITY IT'S A DORM!!!! 10 min away from Eastwood City, Quezon City Monthly Rate: PHP 3500 up Contact Person: cong Contact Number: 09228987364

QUEZON CITY LADIES' DORMITORY 1 Sct. Ybardolazaa corner Sct de Guia, Kamuning, Q.C. Monthly Rate: PHP 7,000 Contact Person: Mina Alcantara Contact Number: 0928-6505-827

QUEZON CITY 559 LADIES DORMITORY 559 boni serrano, Libis, Eastwood, Cubao,QC Monthly Rate: PHP 2,200 Contact Person: abby Contact Number: 09223600968

QUEZON CITY GOLDEN PANDA DORMTEL 447 E. Rodriguez Sr. Avenue cor. Banawe, Quezon City Monthly Rate: PHP 5,000.00 Contact Person: Charity, Cristy or Marice Contact Number: 353-0888 or 743-9203

QUEZON CITY MY PLACE RESIDENCE HALL - THE FINEST! 22 Fabian dela Rosa St., Loyola Heights, Quezon City Monthly Rate: PHP 7K to 15K Contact Person: Mr. Win Marcella Contact Number: +63917-5561753 or (632) 433-0667

QUEZON CITY THE STUDIO 87 RESIDENCES 87 Xavierville Ave. Loyola Heights, Quezon City Monthly Rate: PHP 7.5k to 9K Contact Person: Ms. Joy Pimentel Contact Number: 0922-8863012

QUEZON CITY CASA LA NIÑA WOMEN'S DORM 41 Scout Castor Street, Barangay Laging-Handa, Quezon City Monthly Rate: PHP 2200 Contact Person: Beth/Leslie Contact Number: 7112256/4485852/0919-6210964

QUEZON CITY HOMESTAYCAFE DORM 13 Juan cor Ricardo St., Hayaville subd.,Project 6, Quezon City (near Trinoma and SM north Edsa) Monthly Rate: PHP 3,500 Contact Person: Ann Contact Number:

QUEZON CITY ABDM'S DORMITORY No. 6 Almon Street, Brgy. Claro, Quirino3B, Project 3, Quezon City, Metro Manila Monthly Rate: PHP 3000 Contact Person: cris Contact Number: 4350718

QUEZON CITY 8TH AVE-CUBAO LADIES DORMITEL # 74 8th Avenue, Murphy, Cubao, Quezon City Monthly Rate: PHP 1,500.00 Contact Person: Lea Lukban Contact Number: 437-4815/0915-3202715

QUEZON CITY DANGAY SUITES 99-a dangay street, project 7 qc Monthly Rate: PHP 1700 Contact Person: Mrs. Dionisio Contact Number: 5024253

CALOOCAN CITY

CALOOCAN PINILI'S PLACE 117 West 2nd Ave., Grace Park,, Kalookan city Monthly Rate: PHP 1500-1750 Contact Person: Ryan, Karen, Jimmy, Randy Contact Number: 09178222824/0922-8-PALABA

CALOOCAN JOVAN BLDG 60 Gen Luna St cor Lakas, Poblacion, Caloocan City Monthly Rate: PHP 1,700 Contact Person: Ylla Contact Number: (0916) 3864175

CALOOCAN AREVALO DORMITORY 31 Jala Jala Street, Maypajo, Caloocan City Monthly Rate: PHP 2000 Contact Person: Francis Sto. Tomas Contact Number: 09273007500

MAKATI

MAKATI DORMITORY IN BANGKAL MAKATI Bangkal, Makati Monthly Rate: PHP 1,300 Contact Person: anyone Contact Number: 09159507792

MAKATI GUADALUPE BLISS Guadalupe BLISS, makati Monthly Rate: PHP 1,500 Contact Person: mary or anyone Contact Number: 815-2939

MAKATI ROYAL DORMITORIES 9544 Akle St. San Antonio Village Makati City, Makati Monthly Rate: PHP 1000-5000 Contact Person: mr. zamora Contact Number: 09194449456

MAKATI RICHBELLE LADIES DORM IN MAKATI & STA. ANA AREA 525 Tejeros Garden Bliss H. Santos St.,, Makati City, Metro-Manila Monthly Rate: PHP 1,650 / 1,700 Contact Person: Ate Belle Contact Number: 895-66-67/ 09178223486

MAKATI ESPACIO UNO FEMALE DORMITORY/BEDSPACING 1677A Dian St. Makati Monthly Rate: PHP 3000 Contact Person: JINGGOY Contact Number: 09178055522 or Land 7565023

PASIG

PASIG KAPITOLYO Kapitolyo, Pasig Monthly Rate: PHP 4,500 Contact Person: anyone Contact Number: 620-7148

LAS PINAS

LAS PINAS LADY BEDSPACES Las Pinas, near Max / RFC Monthly Rate: PHP 1,300 Contact Person: las pinas bedspace Contact Number: 873-4029

LAS PINAS BEDSPACE FOR RENT Tidy Tips St. Talon Village Talon IV, Las Pinas City, Metro Manila Monthly Rate: PHP 1,400 Contact Person: Joy Contact Number: 0928-2774403

MANDALUYONG

MANDALUYONG DORMITORY / BEDSPACE Boni, EDSA Monthly Rate: PHP 4,300 Contact Person: Boni Dormitory Contact Number: 718-0485

MANDALUYONG EXECUTIVE DORM Plainvew Subd., Mandaluyong City Monthly Rate: PHP 4,500/person Contact Person: Joseph Contact Number: 533.2963 / 09175121258

SAN JUAN CITY

SAN JUAN VERONICA BOARDING HOUSE San Juan City Monthly Rate: PHP 2,500 Contact Person: VERONICA Contact Number: 7244916

SAN JUAN LADIES DORM SAN JUAN CITY 93 N. Domingo St., San Juan City Monthly Rate: PHP 2500 Contact Person: Jenny Uy Contact Number: 09229948369

ANGELES CITY

ANGELES DORMITORY NEAR HOLY ANGEL UNIVERSITY near Villa Theresa, Angeles, Pampanga Monthly Rate: PHP 1,100 ++ Contact Person: Anyone Contact Number: 0458870599

OLONGAPO CITY

ABC SPACE DORMITORY 10 fendler street extension east tapinac, Olongapo City Monthly Rate: PHP 2,000.00 Contact Person: Fina Contact Number: 0919-8196599

CAVITE

DASMARINAS SJS DORMITORY Villa Nicasia V, Dasmarinas Cavite (near De La Salle University, Emilio Aguinaldo College) Monthly Rate: PHP 3200 Contact Person: shyll Contact Number: email us at: sjsdorm@gmail.com

BACOOR PERPETUAL COLLEGE MOLINO - FOR FEMALE Molino Road, Bacoor, Cavite Monthly Rate: PHP 2200 Contact Person: Rommel Imperial Contact Number: (0922)7274910

BAGUIO CITY

BAGUIO VALERIO'S PLACE #300 Marcos Highway, KM. 5, Sto. Tomas Proper, Upper Tuba, Baguio City Monthly Rate: PHP 600/DAY FOR 2 PERSON Contact Person: RIC VALERIO Contact Number: (02) 253-7617, (02) 255-4643 or (02) 255-4190

CEBU CITY

CEBU CITY LADIES DORMITORY 15-E Elizabeth Pond, Cebu City, Cebu City Monthly Rate: PHP 1,500 Contact Person: Astrid Parilla Contact Number: 09198517556

Residential Clusters Near Train Stations

Below is my list of condominiums and subdivisions in Metro Manila that I sorted according to proximity to Train Stations and MiniCities. This will help you determine where to find a place to rent or buy. If you know something that I missed, please email me the information so I can edit this Blog and add it. If you need the exact address of the condo, please email me because I have a complete data with me. Thank you.

If there is anything else important that I forgot to include in this article, please email me. If you want to comment about this article, there is a provision for this purpose that you can find below. Thank you so much for visiting my site. May God Bless You!

MRT TAFT

Park Avenue Mansions Condo
Antel Seaview Towers Condo
Harrison Mansions Condo
Bay Garden Condo

MRT MAGALLANES

Oriental Gardens (Orchids and Lotus Towers) Condo
Cityland Pasong Tamo Condo
Cityland Dela Rosa Condo
Cityland Makati Executive Tower 1 Condo
Cityland Makati Executive Tower 2 Condo
San Lorenzo Village Subd
Magallanes Village Subd
Dasmarinas Village Subd

MRT AYALA

The Columns Condo
West of Ayala Condo
Cityland 10 Tower 1 Condo
Cityland 10 Tower 2 Condo
Gramercy

MRT BUENDIA

Salcedo Park Tower Condo
Classica Tower Condo
Westgate Plaza Condo
Manhattan Square Condo
Paseo Parkview Tower 1 & 2 Condo
Antel Platinum Tower Condo
Urdaneta Village Subd
Forbes Park Subd
Bel-Air Village Subd

MRT GUADALUPE

Joya Lofts and Towers Condo
Rizal Tower Condo
Hidalgo Place Condo
The Manansala Condo
Guadalupe Nuevo Village
Pinagkaisahan Village

MRT BONI

GA Towers 1 Condominium Condo
Cityland Pioneer Tower Condo
Pioneer Pointe Condo
Dansalan Gardens Condo
One Gateway Place Condo
Globe Telecom Plaza 1 Condo
Globe Telecom Plaza 2 Condo
Paragon Plaza Condo

MRT SHAW

Cityland Shaw Tower Condo
The Crescent Condominium Condo
Rennaissance 3000 Condo
Alexandra Tower D Condo
Alexandra Tower A Condo
Cityland Wack Wack Royal Mansion Condo
Lee Gardens Condo
California Garden Square Condo
Crisanta Tower Codominium Condo
Phoenix Heights Condominium Condo
Skyway Towers Condo
Valle Verde Tarraces Condo
San Antonio Village Subd
Kapitoyo Village Subd
Pleasant Hills Village
Highway Hills Village
Wack-Wack Subd

MRT ORTIGAS

AIC Grande Tower Condo
Cityland Mega Plaza Condo
Corinthian Executive Regency Condo
The Malayan Plaza Condo
Parc Chateau Condominium Condo
Parc Royale Condominium Condo
AIC Gold Tower Condo
Emerald Mansion Condo
Corinthian Gardens

MRT ANAPOLIS

One Beverly Place Condo
Tiffany Mansions Condo
LPL Greenhills Condo
Goldland Tower Condo
Goldland Plaza Condo
Avida Towers Condo
Platinum 1000 Condo
Annapolis Wilshire Plaza Condo
Greenhills Garden Square Condo
Platinum 2000 Condo
La Primera Casita Condo
White Plains Village
St. Ignatious Village
Greenhills Villages

MRT CUBAO

PYP Mansions II Condo
Theresa Condominium Condo
Regalla Tower Suites Condo
Prince Gregory Condominium
Manhattan Garden City Condo

MRT GMA KAMUNING

Atherton Place Condo
FSS Building 2 Condo
Prince Jun Condominium Condo
24K Mansion Condo
Mission Garden Condominium Condo
Lansberg Place Condo
Kamias Village
Pinagkaisahan Village
Timog-Morato Area Villages

MRT QUEZON AVE

Delsa Mansion Crystal Mansion Condo
Future Point Plaza 2 Condo
The Heart of the City Condominium Condo
Lourdes Condominium Condo
Lansdale Towers Condo
SJB Centro Plaza Condo
SJB Condominium Condo
Victoria Towers Condo
The Columbia Garden Residences Condo

MRT NORTH AVE

E&E Building Condo
Northridge Mansion Condo
Millionaire's Suite Condo
Kassel Residences Condo
Grass Residences

LRT1 MONUMENTO

LRT1 5TH AVENUE

First Amiji Mansion Condo
Howard Tower Condo

LRT1 BAMBANG

YTL Tower Condo
Broadview Tower Condo
Cathay Mansions Condo
Diamond Plaza Condo
S Tower Condo
Dynasty Tower Condo

LRT1 CARRIEDO

Regina Towers 1 & 2 Condo
Mandarin Mansion Condo
Galleria de Binondo Condo
Escolta Twin Towers Condo
UniverCity Convenience Flats Condo

LRT1 CENTRAL

Gotesco Tower A Condo

LRT1 UNITED NATIONS

Alpha Grand View Tower A Condo
1322 Golden Empire Tower Condo
Mayfair Tower Condo
Sunview Palace Condominium Condo
Royal Bay Condo
Ermita Area

LRT1 QUIRINO

Malate Crown Plaza Condo
Astral Tower Condo
Standford Tower Condo
Ocean Tower Condo
Le Mirage Condo
Boulevard Mansion Condo
Echelon Tower Condo

LRT1 PEDRO GIL

Malate Adriatico Grand Residences Condo
One Adriatico Place Condo
Two Adriatico Place Condo
The Providence Tower Condo
Alpha Grand View Tower B Condo
Malate Area

LRT1 VITO CRUZ

Asiawealth Tower Condo
Cityland VitoCruz Towers Condo
Torre Lorenzo Condo
Balagtas Villas Condominium Condo
Burgundy West Bay Tower Condo
Burgundy Transpacific Place Condo
Pacific Regency Condo
Ivy Hill Residences Condo
Grand Tower Condo

LRT1 BUENDIA (GIL PUYAT)

Bay Gardens Towers (Palawan, Mactan, Crystal, Anchor) Condo
IPI Buendia Tower Condo
Monaco Garden Tower Condo
Cityland 8 Condo
Somerset Mansion Condo
One Rockefeller Condo
Boardwalk Tower Condo

LRT1 LIBERTAD

LRT1 BACLARAN

Diplomat Condominium

LRT2 SANTOLAN

Marquinton Residences Condo

LRT2 KATIPUNAN

One Beatriz Tower Condo
Xanland Place Condo
One Burgundy Plaza Condo
Burgundy Place Condo
Residencia de Regina Condo
Prince David Condo
Loyola Heights Subd
Xavierville Subd
La Vista Subd

LRT2 ANONAS

Project 2 Subd
Project 3 Subd
Sikatuna Village Subd
Teacher's Village Subd

LRT2 GILMORE

Gilmore Heights Condo
Xavier Hills Condo
Golden Plaza Condo
Golden Tower Condo
Le Gran Condominium Condo
The Eisenhower Condo
Valencia Hills Condo
Swire Elan Condo
New Manila Village
Horseshoe Village
Green Haven Park Homes Subd

LRT2 J. RUIZ

Asia Crest Mansion Condo
Quadrillon Mansion Condo
One Wilson Place Condo
Royal View Mansion Condo

LRT2 V MAPA

Hamstead Gardens Condo
Mezza Residences Condo

LRT2 LEGARDA

Casa de Aviles Condo
CEV Mansion Condo
Oblamco Building Condo
University Tower Condo

C5 ROAD

Eastwood Lafayette 2 Condo
Eastwood Lafayette 3 Condo
Eastwood Excelsior Condo
Eastwood Palazzo Residence Condo
Eastwood One Orchard Condominium Condo
Eastwood Olympic Heights Condo
Cypress Towers Condo
Rosewood Pointe
Bonifacio Heights Condo
Mahogany Place Condo-Subd Mix
Royal Palm Residences Condo
Ridgewood Towers

FORT BONIFACIO (GLOBAL CITY) TAGUIG CITY

Fifth Avenue Place Condo
Fairways Tower Condo
Essensa Towers (Cameron & Lawton) Condo
Regent Parkway Condo
One McKinley Place Condo
Pacific Towers Condo
Serendra Towers (1,B,C,D,E,F,G) Condo

SOUTH SUPER-HIGHWAY ALABANG

Studio One & Two Condo
Burch Tower Condo
West Cedar Condo
La Vie Flats Condo
West Parc Alder Condo
Ohana Place Condo
Ayala Alabang Village Subd
Almanza Village
Pilar Village Subd
San Francisco Del Monte Subd
BF Executive Village Subd
BF Homes Subd
Southland Estate Townhomes Subd
BF Resort Subd

If there is anything else important that I forgot to include in this article, please email me.

Anomalies, Scams, and Schemes in Real Estate Deals - Overview

The objective of this blog about Anomalies, Fraudulent Schemes, and Scams in the real estate service sector is to warn the public and alert government authorities.

The foundation of this blog is knowing (A) the legality as to when should a broker accountable to the transaction and be entitled to a commission, and (B) the legality of conveying and acquiring real estate.

The three major elements to consider as broker entitlement factors are (1) Authority to Broker evidenced by license, (2) Authority to Represent a Client evidenced by a professional engagement contract with the client, and (3) Procuring Cause.

Aside from the brokerage contract or listing agreement that a broker signs up with a property owner, the broker must establish that he is significant to the Procuring Case of the sale.

The term "procuring cause" in describing a broker's activity, refers to a cause originating a series of events which, without break in their continuity, result in accomplishment of prime objective of the employment of the broker - producing a purchaser ready, willing and able to buy real estate on the owner's terms.

A broker will be regarded as the procuring cause of a sale, so as to be entitled to commission, if his efforts are the foundation on which the negotiations resulting in a sale are begun. The broker must be the efficient agent or the procuring cause of the sale. The means employed by him and his efforts must result in the sale. He must find the purchaser, and the sale must proceed from his efforts acting as broker.

We, Licensed Brokers are professionals, just like Doctors and Lawyers and Engineers and Nurses. We follow government procedures and Code of Ethics. In my opinion, anything that is being done by any person (brokers and non-brokers alike) that violates Government Procedures and our professional Code of Ethics are classified as Anomalies, Fraudulent Schemes, and Scams.

Anomalies, Fraudulent Schemes, and Scams are activities that is disadvantageous to government, disadvantageous to the general public or the real estate customers in general, and disadvantageous to the profession of real estate service.

The intent behind the dark heart of those who practice Anomalies, Fraudulent Schemes, and Scams is always associated with monetary gain.

ANOMALY

When I use the word anomaly in this blog, I don't always necessarily mean "absolutely illegal". Anomaly is something I refer to as is any occurrence or object that is strange, unusual, or unique. It can also mean a discrepancy or deviation from what is supposed to be the correct way of doing things according to an established rule or trend. In terms of gravity of violation, I would classify an Anomaly as a mild violation, but still has to be eradicated.

FRAUDULENT SCHEME

I use the term Fraudulent Scheme when it involves falsification of material documents, production of counterfeit/fake documents. In terms of gravity of violation, I would classify Fraudulent Scheme as serious crime that has to be exposed and stopped.

SCAMS

I use the term Scam when the massive scale deceit is involved. A scam is highly organized, systematic, and uses legitimate business as fronts. Most Scams are connected to corrupt government officials -- obviously those who are supposed to detect and stop the scam. Scams victimize not only individuals but population in wholesale numbers. When a scam is exposed, it normally reveals thousands of victims. In terms of gravity of violation, I would consider a Scam as extremely serious crime that has to be exposed and stopped.

If there is anything else important that I forgot to include in this article, please email me.

If you want to comment about this article, there is a provision for this purpose that you can find below. Thank you so much for visiting my site. May God Bless You!

10/12/2009

A Wish Market - The Lowest Price Possible

A Wish Market is one where the end consumer buys directly from the producer. This is a kind of market where buyers expect to get the product at lowest price possible. This is the perfect scenario wherein the price is low.

However, in reality, the wish market rarely exist for so many reasons, one being is the inability of the two ends to connect to each other because of gaps in space, time, and information. Naturally, that gap in the middle is filled in by exporters, importers, wholesalers, retailers, dealers, agents, and sub-agents. These gap-fillers compose a huge part of the whole economy and their existence is sustained by how much they get from the bottom-line market price, which is the premium or profit over and above the production price.

As a rule of thumb, buyers must always find a way to deal directly to someone closer to the source producer because it is where the price is relatively lower. But this rule does not apply to real estate, wherein the commodity in question is worth millions, wherein a 5% overprice is already thousands of thousands and even millions of pesos. When it comes to real estate, if the buyer wants to cut the chase to the lowest price possible, he has to engage the services of an Exclusive Buyer Agent (EBA).

Why is this so?

Unlike any other consumer product, Real Estate is so unique because the agent income is too huge it tempts the "greed" of everyone -- agents, sellers, and buyers. Real estate agents earns huge amount of money commission for a very little work -- and this phenomenon somewhat "annoys" most buyers and sellers. Most real estate owners who does not want an agent actually wants to get solely for himself that agent income. Most real estate buyers who does not want to engage an agent actually requests sellers for some rebate.

This greed that plays in the air is what makes it difficult for real estate sellers and buyers to establish the connection. This difficulty was long been seen and solved by the government, that is why the Code of Ethics and the Real Estate Service Act was put in place. But if you read these code of ethics and open your eyes to what is happening around, you will persistently wonder why is everyone not on board the law.

The bottomline is, in real estate, the only three that is fully capable of buying a property at the lowest price possible are (1) the banks at forclosure, (2) the real estate dealers, and (3) the Exclusive Buyer Agents (EBA).

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Conflict of Interest - The Worst Anomaly yet Most Ignored

Conflict of Interest happens when a person tasked to do a main job is in a circumstance wherein his personal interest or other professional interest could possibly run contrary to the main mission. The circumstances could be inherent or acquired.

A conflict of interest is Inherent if the person circumstances are pre-existing, such as personal relationships, prior professional engagement.

A conflict of interest is Acquired if the person just got into a new situation that may conflict his main mission, such as new employers, new contracts, new spouse, new relationships.

Real Estate Brokers are engaged as "Agents" by their clients, therefore they are also covered under the rules of agency and fiduciary trust. The most serious enemy of fiduciary trust is what we call Conflict of Interest, and although it is very common, most clients are not aware of it.

Ideally, the Real Estate Broker as an "Agent" should only have one principal client, must be 100% loyal to his client, and fully focused on accomplishing the mission defined by the client. If a broker works for a real estate developer, he must be 100% loyal to the developer and must avoid selling properties of other developers. If a broker signs up a brokerage agreement with an individual property seller, he must be loyal to that seller-client and never connive with the potential buyers in influencing the pulling down of the price. If the broker is an agent of a buyer, he must show all options to the buyer and always try his best to negotiate the lowest price possible.

However, many brokers rarely close contracts in any given consumption month, and honest earning is like a game of chance. For this reason, brokers tend to waive their loyalty, work on both sides, act like arbiters, negoiators in-between, and set aside the rule on fiduciary trust just to close the contract and earn a living. There is nothing bad in making a living, but it is not fair for clients if one earns out of conflict of interest.

Below are some of the instances of conflict of interest that I can think of.

There is conflict of interest if the Listing Agent signs up a Listing Agent Agreement with a property owner, but then later on connive with the prospective buyers to influence the reduction of the original listing price of the property.

There is conflict of interest if the Buyer's Agent signs up a Buyer's Agent Agreement with a prospective buyers, but then later on connive with property owners and present the property to the buyer with an overprice.

There is conflict of interest if a Listing Agent, who signed-up as in-house agent of a firm or developer, refers a prospective buyer to a property that is not listed in the inventory of the firm or developer.

There is conflict of interest if a Buyer's Agent have two simultaneous buyers who are seeking a similar property because he will have to present a "second best" to one of them.

Anna is a Broker who claims to a a Buyer's Agent. Benny is a Client. Client Benny sought the professional services of Broker Anna to help him find a warehouse in Binondo for his soap business. Client Benny’s purchasing budget is P100M and he agreed in writing, through a Buyer's Agent Contract, to give Anna P300T working allowance plus a promise of P700T over and above the budget if she can find and negotiate a purchase of the warehouse. In short, the total contract price of the services of Anna as Buyer's Agent of Cleint Benny is P1M. Anna was given three months to work full-time to find a property, and she was also given P50T allowance to start the first month work.

Broker Anna researched the newspapers, internet, and asked around Binondo to inquire if there is someone who wants to sell a warehouse. After a week, a certain Broker Charlie called Broker Anna telling her that he has a listing of a warehouse. Broker Anna inspects the property and it exactly fits the requirement of Client Benny.

Broker Charlie presented the property at P100M, he has Authority to Sell from the property owner that indicates he has 5% Commission if the property is sold and is willing to share it at 50/50 to any broker who can find a buyer. Broker Anna accepted the proposal of Broker Charlie on a 50/50 sharing of the 5% Commission. In short, if the property closes a sale at P100M, with a 5% commission at stake, Broker Anna would get P2.5M commission and Broker Charlie will also get P2.5M commission.

[Question: is it ethical for Broker Anna to accept the 50/50 proposal of Broker Charlie? I will answer this later when Client Benny came to me for an advice.]

So, after meeting up with Broker Charlie, Broker Anna presented the property to Client Benny with the highest recommendation, complete with explanation. When Client Benny personally inspected the property, he is not convinced that it should cost P100M because it is near a flooded canal that smells very bad. For some reason, Client Benny could not find the "bad smell" information in the research folder of Broker Anna. Client Benny directed Broker Anna to negotiate a 20% discount, meaning he is only willing to pay P80M for it.

Whatever the final price is, Broker Anna will get the P1M Buyer's Agent Fee from Client Benny – so with respect to her interest to the Buyer's Agent Fee, Broker Anna should not care about the final price.

However, Broker Anna became interested on the P2.5M share of the Commission if the property is sold at P100M. If the final price will fall to P80M, her share of the commission would only be P2M, a clear reduction of P500T from P2.5M share that she can get from Broker Charlie.

Even if Broker Anna will deny to death that there is no conflict of interest in her heart, the Client Benny would always think that he can no longer effectively use Broker Anna to represent him in the negotiation because Broker Anna "Acquired" a conflict of interest, as she rationally wants the bigger price so she can get a bigger amount of commission.

[Enter EBA John Petalcorin in the scenario]

Client Benny came to my office for an advice. I would tell him to immediately revoke her contract with Anna for reason of deliberate treachery for having defected to serving the interest of the opposing party of the transaction. Broker Anna's conivance with Broker Charlie on the split commission is a form of Conflict of Interest popularly known as Outside Employment, in which the interests of one job contradict another.

Broker Anna acquired a conflict of interest that has made her unworthy to represent Client Benny. When Broker Anna got the information that Broker Charlie is offering a 50/50 commission sharing agreement for a P100M priced property, she should have instead immediately counter-offered a P2.5M price reduction in favor of Client Benny. But what she did was accept the 50/50 sharing offer of a Listing Agent, and I don't know if she is aware that that offer looks like a "bribe".

In companies, an officer who is in charge of procurement can be terminated if he asks a commission from contractors who provide services for the company. In public service, they call this graft and corruption.

Questions and Answers on Conflict of Interest

QUESTION: Can Broker Anna insert a clause in the Finder’s Fee Contract that says she can get a share of the commission from the Seller Side over and above the finder’s fee?

ANSWER: YES she can if she has the nerve to fool Client Benny in front of his face. It is not unlawful, but it is very unprofessional.

QUESTION: Can Broker Anna and Broker Charlie keep their mouth shut about the 50/50 commission sharing deal?

ANSWER: YES they can, but ethically they SHOULD NOT because it is very unprofessional not to disclose interests such as this to the principal client.

Moral Lesson

Our loyalty to our clients must be 100 percent. We do not spare a little for our own pockets. We, professional Brokers, are not fly-by-night service providers. We put service and loyalty to our clients above personal interest. Greed should not cloud our judgment. Money will come and go. But reputation is a very important element of our personal success. We also cannot sacrifice the integrity of our profession.