Real Estate Service Coach [RESC]: Tips for Brokers

Showing posts with label Tips for Brokers. Show all posts

9/29/2014

Date of entitlement to commission

Question: Rltr. John, I have a question about my uncle was an old-time licensed real estate broker in PH. Is he entitled to the commission of a sale transaction that he previously worked on prior to the expiration of his license?

Answer: YES. His date of entitlement is the date he introduced the customer (buyer) to the client (seller or owner). If he was a licensed Broker during that date of entitlement, then he is fully entitled to the commission even if he is no longer a licensed broker at the time the transaction is completed.

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!

5/20/2014

Distinguish "Foreclosed Property" from "Acquired Asset"

When a property owner fails to pay his MORTGAGED PROPERTY, the property will be foreclosed by the bank and that property becomes FORECLOSED PROPERTY. A foreclosed property becomes an ACQUIRED ASSET of the bank after the release of the Court's decision to convey the ownership of the property in favor of the bank. The Court Order usually comes with an eviction provision if there are occupants that need to be evicted.

5/18/2014

Migration from licensed to unlicensed

MIGRATION FROM LICENSED TO UNLICENSED

For the best interest of survival, let's focus on migrating everyone from licensed status to unlicensed kasi mas mag survive tayo pag unlicensed tayo kesa sa licensed, kasi hindi naman protected ng GPH ang proprietary rights natin sa profession eh. GPH is still protecting the colorum (in fact protected by BIR). The CPE is exorbitant. The IPO is subjected to cronyism.

The broker-client relationship (including identity) is protected by professional proprietary privacy rights, hindi pwede i-disclose kasi ma-sulot ang client. Walang privacy guarantee ang BIR na ma protection nila ang client information natin.

Bumababa na ang registration ng Brokers and salespersons sa HLURB and this is a good momentum which is a result of our peaceful advocacy in the past 5 years. Nilalangaw na ang renewal department ng PRC kasi hindi na nag-rerenew mga Brokers ng license nila. When time comes to renew your individual license, alam na natin lahat na susulatan mo ang PRC and BIR and HLURB about these issues. If they ask kung saan ang pera, we tell them na kinita na nag mga colorum ang kita natin at binayaran na ng colorum ang tax na dapat tayo ang nag-bayad. If they would ask for an explanation of the non-renewal of license, refer my name to them. The GPH is most welcome to set an appointment for a dialogue with us -- which I will gladly represent.

Individually, let's make a firm decision not to be led into the slaughterhouse. Let's share our bad experience by telling all broker wannabee that it's not worth it. Let's scrap the RA 9646 for the good of everyone.

Everyone knows the sacrifices I have made in advocating RA 9646, but it just didn't work out. The GPH is corrupted and will never cooperate with our advocacy for professionalization. The GPH is just a leech.

8/03/2013

Request for Cancellation of Salesperson’s Registration with Negative Note

QUESTION: Rltr. John, my Salesperson violated the Real Estate Service Act of 2009 and I want to fire him. How do I write the request for cancellation of his PRC Registration?

ANSWER: See sample/guide below.

SUBJECT: Request for Cancellation of Salesperson’s Registration with Negative Note

ATTN: PRB-RES
Professional Regulations Commission
Manila

Please cancel the Real Estate Salesperson registration of [SalespersonName] with a negative note. I have forced him to resign and end his career as a real estate salesperson because he maliciously by-passed my supervisory function. Specifically, he solicited an Authority to Sell from a real estate owner named Daniel Gonzaga and kept the document secret from me; deliberately failed to have the Authority to Sell approved by me; and he offered the property for sale to a certain Lilia Sanchez. I discovered the anomaly after Lilia Sanchez contacted me to verify the legitimacy of the offer. Attached are the documents in relation to this case.

Sincerely,

Rltr. YourName
Real Estate Broker

6/27/2013

Transferring a Salesperson

QUESTION: Rltr John, I am a Broker. My Salesperson created a friction with the relative of the owners of the Developer. As a result, she can no longer work well with the Developer. Should I terminate her license for a cause?

ANSWER: Salespersons are somewhat jointly supervised by the Broker and the Developer. People are social beings, meaning, it is inevitable that we interact with other human beings. It happens all the time that Salespersons would run into conflict or even romantic intimacy with someone in the Developer side specially if there is a personality mismatch or match between the Salesperson and whoever she works directly in the company of the Developer. There is no need to terminate her license. Do not do unto others what you don't want others to do to you. Instead, PROTECT her means of livelihood and help her to finally get out of that conflict zone. All you need to do is transfer her to another Developer. It is a big world out there and there are a lot of Developers out there who would take her -- all you need to do is write a letter to the current developer to terminate her accreditation (without prejudice to commissions that may be due to her on hold-over clause) and then write an endorsement letter to the new developer where you want her to transfer to. Understand also that Developers don't like fall-outs of their sales force, so try your best to assign a replacement Salesperson.

6/26/2013

How to avoid developers from stealing your leads

When you advertise a property for sale, it generates sales leads. If you show the name of the developer or name of the project, the interested buyer who saw your Ad will most likely go to the website of the Developer. When prospective buyers inquire via website of developers, the inquiry form goes to the developer and not to you. As a result, the leads generated by your internet Ads and fliers are stolen.

The solution is simple, just advertise the photo of the house or condominium, the technical information, the location, and the price, but NEVER show the Project Name or Developer Name in your picture and in the text of your ads. Thank you.

As licensed Brokers and Salespersons, you must promote yourselves more as a professional and increase client/customer confidence on you and your profession instead of promoting buyer confidence on the developer. Remember, developers are competitors because they directly sell to buyers too and they have lots of in-house colorum agents. You don't want to lead your clients/customers to the colorum and you don't want your leads stolen.

6/25/2013

Freelance Broker and VAT Payment

QUESTION: Sir John, I am an independent freelancer Real Estate Broker. I have no Business Entity (Sole Proprietorship, Partnership, Corporation). I do charge (1) Professional Fee for documentation workload and (2) Percentage Commission when I successfully make a sale. I have Official Receipts. Without Official Receipts, how will I go about the BIR Rule that I have to charge VAT or Percentage Tax for my professional services and commissions?

ANSWER: You are the service provider. The entity (person or individual) who availed your service (for a fee) is called customer. VAT and Percentage Tax is always on the burden of the customer. You don't pay VAT for those services, it is the customer who pays VAT.

The term "VAT Remittance" and "VAT Payment" are two different things. Government captures VAT via Input Tax or Output Tax -- it cannot be both. Input Tax means the customer pays VAT (because you charge him VAT over and above your service fee) and you remit the tax directly to Government. Output Tax means customer pays VAT (because you charge him VAT over and above your service fee), but take note that he will not actually give you the VAT money because he will withhold it and he remits it directly to Government. Whether Input Tax or Output Tax, its the customer who pays the VAT. If Input Tax, you have the burden to remit the VAT to BIR. If Output Tax, the customer has burden to remit the VAT to BIR.

In your case as a freelance Broker who have no Official Receipt, you do the Output Tax procedure. When a customer pays you P10,000 (for example), you issue an Acknowledgement Receipt (AR). The contents of your AR must be clear so that it would show that you did not receive the VAT money, meaning the VAT money is not with you but is in the hands of the customer. If the BIR will run after the VAT money, there is record that the VAT money is in the hands of the customer because this is an Output Tax procedure.

Shaving Off Some Requirements to Practice

Been to BIR to return obsolete official receipts. First, you will be given a VERIFICATION FORM which requires you to go around a series of collector agent tables where they check for tax forms or payments you missed to submit in the past which they call "Open Cases". You have to settle the open cases before you get a clearance. I have open cases, just like all customers I fell in line with. We bottomed down to a compromise fee of P3,800 to close all my open cases. I was asked if I will be requesting for Authority to Print (ATP) official receipts, I answered "no" because I intend to shut down the real estate brokerage business for reasons that (1) PRC does not have a law enforcement memorandum circular, and (2) BIR and City Hall appears ignorant of RA 9646 and still accommodate the registration of colorums.

So, everyone, let's clear our open cases in BIR.

Here is the new procedure. We continue to serve customers on the following standard procedure:

(1) Without DTI-registered Business Name,

(2) Without City-registered place of business, and

(3) Without official receipts.

We will wait for PRC to issue memorandum on implementation of the Principal Place of Business provision of RESA as well as law-enforcement memorandum. Our LICENSING STRIKE is still active, which will only affect "renewal" of PRC license, HLURB-registration, and Business Tax Registration/Payment.

With PRC card and City-issued Professional Tax Receipt (PTR), we can continue practicing and servicing the customers. If we hit a sale and get commission, the payor of the commission have the obligation to "Withhold Tax", and we declare ONE TIME INCOME to BIR for whatever jackpot commission we earn (which is very seldom) as Brokers and/or Salespersons.

ATTN: Developers, Dealers, and Banks:

You may now remove the following requirements in accrediting INDIVIDUAL brokers: (1) DTI Reg Business Name, (2) City-hall Business Permit, (3) Official Receipts. In lieu of these things, you will only require PRC Card, HLURB Registration, and PTR. Whatever commission you pay to the Broker and/or his Salespersons, you withhold the usual 10% income tax and don't forget to issue (without delay before you forget) a Withholding Tax Certificate to the Broker/Salesperson.

Please pay the individual Broker or individual Salesperson even if his/her PRC license is expired while we are still on license renewal strike. The rationale of the Licensing Strike is the PRC to issue a Law Enforcement Memorandum Circular on RA 9646, because licensing is useless without it. PRC License Card of a practicing professional can be administratively renewed "retroactively" after payment of license fee and surcharge for all previous years that you failed to renew your license card. So I advise you only require the Registration Certificate (RC is the one that looks like a diploma) because the RC is lifetime. Please do not require them to show the updated or renewed PRC License Card during accreditation or during payment until the RESA Law Enforcement Memorandum is released and effective for implementation. The Salesperson have PRC registration receipts and still don't have PRC cards.

Also, please as a way to migrate those colorums to become PRC-registered, please revise your Accreditation Agreement with Brokers -- add a provision that will make it an obligation for Brokers to register Salespersons that you will nominate/give to them -- each Broker have 20 max per RA 9646. Take note, there will come a time that government will cross-refer its tax-withholding list against PRC registration list -- If you ever paid commission (as evidenced by withholding tax) to a person who has no PRC Registration (as a Salesperson or Broker), you are so screwed, the colorum will pay RA 9646 violation fine of P400,000 for every count of the crime and you are equally liable with another P400,000 fine for every count.

So, Developers/Dealers/Banks, the question is, when will you require DTI-reg Business Name and Official Receipt? The answer is simple. Ask the accreditation applicant first if he/she is getting accreditation for (A) his/her INDIVIDUAL PROFESSIONAL NAME or for (B) his/her BUSINESS ENTITY (whether sole, partnership, or corp). If the answer is "A", no need to require DTI-reg and Official Receipts. If the answer is "B", then require those two. Withhold 10% income for letter category A.

Withhold VAT or Percentage Tax for category B. Do not withhold the 10% creditable income tax for Category B. Take note, once you accredit a category B, it means you are automatically accrediting ALL real estate practitioners under that business entity and only get the TIN of the business entity.

For category A, each practitioner you must accredit EACH one and get their TIN individually. Do not withhold VAT or Percentage Tax from category A. Just withhold 10% creditable income tax for category A.

The confusion could have been resolved already if BIR and REALTER SOCIETY just pursued the Tax Workshop and Forum. Pero hindi natuloy for some reason. So mangangapa tayo nito.

6/10/2013

Verifying Salespersons in PRC Website

QUESTION: How do public determine if a person is a PRC-licensed Broker or Salesperson?

ANSWER: The public can verify if a person is a licensed Real Estate Broker, Appraiser, or Consultant via PRC website at http://www.prc.gov.ph
You can verify using two possible combinations: (1) first name and surname, or (2) license number and birthday.
You can only verify the supervising Broker of the Salesperson. Salespersons are not verifiable in the PRC website. It is for this reason that Salespersons must indicate their name and the verifiable information and contact number of their Broker in their marketing materials such as fliers, brochures, identification cards, business cards, and online advertisements. Example below is what you will see in the marketing medium of legitimate Salespersons that are verifiable in PRC website.

For inquiries, please contact:
Juan de la Cruz Ramirez*
Tel Nos. 02-1234567
Email: JuanDeLaCruz@Yahoo.Com
* PRC-registered Salesperson under
Real Estate Broker license of John Odonnell Petalcorin
Broker Tel No. 0921-7172040

Or

For inquiries, please contact:
Juan de la Cruz Ramirez*
Tel Nos. 02-1234567
Email: JuanDeLaCruz@Yahoo.Com
* PRC-registered Salesperson under
Real Estate Broker license number: 0010105, 09/15/1973
Broker Tel No. 0921-7172040

6/01/2013

Defining and Discussing Rebate

The old dogs say rebate is unethical. I say it is only a business policy by choice of some sellers (especially Developers) and it is just a matter of pricing policy to standardize a retail price; but it cannot be imposed as ethical standard for all businesses.

Prohibition of Rebate can be permitted as "internal policy" of a Developer or an Association, which affects all their accredited/member Brokers and Salespersons. However, it cannot be imposed upon everyone; hence it cannot be entered in the Code of Ethics and Responsibilities (CODER) for RESPs.

Brokers buying properties for their own selves must be automatically favored with something we call Fellow's Discount that is equivalent to the allocated Agent's Commission. This is the relevance of mandatory disclosure if a practitioner is buying it for his/her own. We could put this in the CODER with proper explanatory note. It's like in Doctors, they normally wave Professional Fee when the patient is a fellow or a parent or spouse of a fellow.

Robert Miraflores: Have a clean conscience....look at it as a discount everybody gives it...that's what it is...As for me...if I don't feel like giving a discount on my commission which is always the case, I simply drop the deal or ask either side to shoulder the discount...any way, we only get paid on percentages. The cardinal rule I have is ...I DONT BEG FOR MY COMMISSION BECAUSE MY SERVICE HAS BEEN RENDERED....NO MORE NO LESS..

Rltr John R Petalcorin: Wait wait wait. Do you understand what REBATE is? Rebate is you "return" a part of the whole amount that is paid to you.

EXAMPLE: A seller's agent gets paid commission by the Seller. The Seller's Agent returns part of it to the one who paid him (which is basically the Seller). That is rebate.

Another EXAMPLE: A buyer's Agent gets paid professional fee by the Buyer. The Buyer's Agent returns part of it to the one who paid him (which is the Buyer). That is rebate.

Another EXAMPLE: A Buyer pays the Total Contract Price to the Seller. The Seller returns part of the payment already made back to the Buyer. That is Rebate.

NOW, I want you to look at a different example I am about to explain and ask yourself if this is a Rebate. Buyer paid TCP to the Seller. Seller paid Commission to the Seller's Agent. The Seller's Agent paid SOMETHING to the Buyer, which is a part of the Commission. Is this "SOMETHING" a Rebate? NO this is not a Rebate because the Buyer is not the one who paid the Seller's Agent. It is a Rebate if the Seller's Agent returns part of the commission back to the Seller.

Fred Bautista: hindi naman siguro unethical kong balatuhan natin buyer ng commisssion natin or pati ang seller...halimbawa blowout sila sa eat all you can.happy yong dalawa sa bundat...

Rltr John R Petalcorin: A Rebate is a precondition prior to consummation of the sale. It is something that is obligated in written or verbal commitment. Gratuity (blow-out) is not a Rebate.

Fred Bautista: suki buyer binitbit k sa developer na nagustuhan...usapan hati sa commission aba'y payag na ako noon kesa mawala pa suki mo.parang sa palengke pag suki pwede tawad sa tubo...palagay ko it is not unethical yan..

Robert Miraflores: Korek ka John....a Rebate is always a precondition to consumate a sale...wherein you are obligated and usually a broker/agent is pressured by either the buyer or the seller against his will to offer that. In my case, I don't entertain rebates....TUMAWAD NALANG KAYO....I strictly work on percentages ....kung 5% eh di 5%, kung 3% eh di 3%, it would depend on me if I like to work a deal on a set percentage. But once the commission parameters are set, then THAT'S IT with me. I only care about the percentage....

Robert Miraflores: Fred Bautista, I guess it's not unethical, kung sa umpisa palang pinagusapan na ninyo ng buyer mo. Kasi may mga pagkakataon na ang regular investors ko tumatawag sa akin at nagpapaarange ng purchase ng isang property sa developer, pero inuunahan na ako na hahati sa commission. Sa akin okay lang yun, kasi hindi naman ako nag offer ng property, sariling research ng buyer ko yun...Pero hinding hindi ako pumapayag ng rebate sa mga properties na hawak ko na minamarket ko ng sarili. Ang parating sinasabi ko sa buyer ay "MAG OFFER NALANG KAYO", at sa seller ay, "Ibigay ninyo lang ang property sa price na mabibigay ninyo ang percentage na pinagusapan natin" usually 5%.. at most often, pag dating sa dulo ng negosasyon, ay tumatawad sa commission ang seller. Nasa iyo nalang yun kung magpapatawad ka...it's your decision...kung hindi ka payag, just DROP the deal, if you can afford it...ganun lang ka practical and simple yun..

Fred Bautista: "It is a Rebate if the Seller's Agent returns part of the commission back to the Seller." yong mga "old dogs" normal na yang rebates.karamihan na seller eh friend na nila. "benta natin conjugal property namin gagawin kita exclusive,hati tayo sa kita pang gimik ha?'...

Annalissa Gutierrez: for me, parang di naman unethical ang rebate... it is like discount in favor of the buyer or seller.. pinaganda lang, rebate..or ( co-mission")hehehe... palagay ko naman, mostly sa lahat ng industriya, meron ganyan... mapa doctor, lawyer, salesman, sa military , sa gobyerno lalo na... bakit ba pinalalaki nila yang issue na yan kung unethical o hindi... nasa tao yan at nasa usapan yan.. e ang legal nga, ginagawang illegal .. yan pa kayang ethical at unethical issue na yan.. in short, deal with your conscience.. peace... opinion ko lang po yon...

Ferdie Santos: John, as you define rebate as part of a whole amount. then it is in conflict on the example you also provide which has bearing on "who paid". malinaw ksi na yung comm is a part of the tcp, but in this case hawak ng broker instead of seller. I agree as you define it, irregardless of the flow of money, as long as it was a part of the whole, which finds its way back to who paid, that's rebate. It's common practice in house agents gives rebates to buyers ksi may quota sila at nakasalalay ang allowance nila sa benta. aba, we brokers can have this agents esp unlicensed out of business. we can give a much higher rebates to buyers... hehe kailangan lang i announce sa buyers. Rebate is a "returned" part of the whole amount. commission is a part, percentage of that whole amount. it was not mentioned in your definition that is has something to do with who handles the money but simply the flow back of a portion.

Rltr John R Petalcorin: Topic is about Rebate. Not about Refund.

Ferdie Santos: My 1st and 3rd post simply repost your definition of rebate and questioning your posts above. you define it as refund din pala. I didn't realize that the definition of rebate above as you define, which I'm trying to refute was all about refund. my bad

Rltr John R Petalcorin: Regarding "Discount on Commission". The Broker, as a seller's agent, have prior authority to sell or accreditation agreement with stipulation of how much commission is agreed upon. If the Broker is amenable to a reduction of commission per potential Buyer's request, then the Broker must disclose this agreement to the Seller and make necessary amendment to the Authority to Sell in writing. I said Amendment in ATS, not a Rebate Consent.

5/28/2013

Anomaly: One man Appraiser and Broker of same property

IS IT RIGHT FOR AN APPRAISER TO BE THE BROKER OF THE SAME PROPERTY?

QUESTION: Rltr John, I am selling my property. I got the service of an Appraiser and he says he can also be the Broker of the same property. There seems to be something wrong about it, I just can't explain. Can you help me?

ANSWER: It is damn straight WRONG to be the Appraiser and Broker of the same property. Appraiser is supposed to be impartial and objective. On the other hand, the Broker OBEYS and REPRESENTS THE INTEREST of the client. In your case, the Seller (owner of the property) is the client of the Broker, whose interest is ALWAYS to MAXIMIZE MAXIMIZE MAXIMIZE and MAXIMIZE the asking price. As an Appraiser, how could he not obey you if he is also the Broker?

If you happen to deal with me, I would assume that that Appraiser's price is higher that what it should be. Hence, I will surely trash that Appraisal Report and have it done AGAIN by someone else other than that guy.

Rebate or Discount

REBATE OR DISCOUNT?

QUESTION: Rltr John, a buyer goes directly to the Seller. Can he ask for a rebate or discount? If yes, how much?

ANSWER: A buyer can only ask for discount, not rebate. I call it Broker-Less Discount practically because he transacted DIRECTLY to the seller or seller's agent, which means he did on his own the workload of watching his own back in the transaction. Agent's Commission is shared 50%/50% between Buyer's Agent and Seller's Agent. Without a Buyer's Agent, the Buyer CAN DEMAND a 50% discount of the amount of Agent's Commission -- and this can be a reason to lower down the price.

5/22/2013

What? Meet the agents outside, and not in their offices?

QUESTION: Rltr. Petalcorin, please comment on this article titled How to Find the Right Real Estate Broker in a magazine Real Estate World (Dec 2012 issue) that says: "Meet agents in their working milieu, not in their offices. Good agents spend very little time at their desks. They are most likely to spend their time doing field works rather than staying in their offices doing nothing. So you must meet agents out in their working environment, not in their offices."

ANSWER: What? Meet the real estate agents outside, and not in their office? Well, it depends. Basic common sense in DUE DILIGENCE would practically incline to saying that first meeting MUST be in the office of the agent so you will know if he/she is lawfully obedient to the law governing the real estate profession. Having a PRC license card as a Broker or PRC registration as a Salespersons is NOT ENOUGH to be considered legitimate. The Real Estate Service Act of 2009 (RESA) requires Real Estate Practitioners (Consultants, Appraisers, Brokers and Salespersons) to have a Principal Place of Business where they are supposed to display their licenses and registration certificates where customers can see. Aside from having a professional license, having an Office shows that the agent is legitimate, active in the service, dedicated business-wise, and a successful practitioner because he can afford an office. An Agent who does not have an office means that is a mere "OPPORTUNIST". If the Agent cannot afford to maintain an office, where would you find that Agent later on for accountability or for help if something goes wrong with the deal? Successful Brokers have private offices as a Broker. So I repeat, as a consumer rights advocate, listen to me, the first meeting must always be (as much as possible) inside the office of the Broker and never outside. The second and subsequent meeting can be anywhere else.

Before you even talk to the Agent (Real Estate Broker or Real Estate Salesperson), know his/her full name and verify his/her professional status in the website of the Professional Regulations Commission (PRC) if he/she is legitimately licensed. If the agent is not licensed, don't deal with him/her -- 95% of the agents roaming around "outside" are colorum (unlicensed) and it is not good for you to deal with them.

2/03/2013

How IPORESP helps Broker business start-up

QUESTION: Sir John, I have no money to start-up a Broker's Office. All I have is a Broker license. Currently, I am a cell card salesman and income is very low. How can you help me start-up a Broker's Office?

ANSWER: That's a good question and I already have plans for that since way back 2010. Once IPORESP becomes AIPO, the first policy will be the imposition of the Professional Fees (PF). Then I will provide training modules on the PF Procedure to the CPE Providers. No licensed animal have ever seen or passed through this training module yet, so no one has bragging rights. The CPE Providers will have to READ the module and self-study on how to deliver the seminar and the ending exam. The training will be around 16 hours and will cost you around P3,200. Once you complete the training and pass the PF Service Qualifying Exam, you will purchase the PF Service Stamp Trodat from AIPORESP and you are already fit to serve the Professional Services and charge PF.

The next is to find you a place to set-up your work station. We will publish the list of "feasible areas", especially in municipalities where you cannot find any Broker. Business Associate Schemes (BAS) will also be established all over strategic city centers. In short, we want our Services to reach all over Philippines. This preparation will all happen within 3 months.

After you pass the PF training and have selected your place of business, we can sign as GUARANTOR for the nearest branch of LandBank to loan you business start-up fund so you can start it up. We are confident to guarantee because we are 100% sure that YOU WILL EARN GAINFULLY with the PF policy implemented and harmonized all over the Philippines!

What's preventing these programs from getting implemented is just those people sitting there in PRB-RES PRC.

1/30/2013

Not only Appraisers, but Brokers also qualify to become Assessors

QUESTION: Can licensed brokers qualify to get a position of Local Government Assessor?

ANSWER: YES. That is one of the loophole of RA 9646. Many are thinking that only licensed appraisers can become Assessors, and they are wrong. Sec 30 of RESA says: "Positions in Government Requiring the Services of Registered and Licensed Real Estate Service Practitioners. Within three (3) years from the effectivity of this Act, all existing and proposed positions in the local and national governments, whether career, permanent temporary or contractual, and primarily requiring the services of a real estate service practitioner, shall be filled only by registered and licensed real estate service practitioners."

INTERPRETATION: the term "licensed real estate practitioners" refer to Brokers, Appraisers, Assessors, and Consultants. So the answer to the question whether licensed brokers qualify to get a position of local government assessor is ---- YES.

Even the Civil Service Memorandum Circular No. 20 Series 2012 says that the "Qualifications Standards of Assessor and Appraiser Positions qualifications set must have RA 1080 eligibility. Required is Real Estate Licensure Exam."

QUESTION: Is there such a thing called Licensure Exam for Assessors?

ANSWER: No. There is not such a thing. The entry point to qualify to become a licensed Assessors are (1) you were an Assessor under the grandfather clause, (2) you are a licensed Broker or Appraiser or Consultant who is appointed to hold position of Assessor. Assessors have their own unique training in LGU and BLGF. There is no private sector that provides training for Assessors.

QUESTIONS FROM GOVERNMENT AND IPORESP ANSWERS

I am Engr. XXX of LGU XXX my email ad is XXX. My comment to this is that if the CHED has really implemented that last 2011 then perhaps my questions are:

1. It will take 4 years starting from 2011 to have a pioneer graduates with that course say by year 2015.

ANSWER: Yes. At the very least 4 years assuming there is a single student today who will graduate on time.

2. So what will happen now while PRC is still awaiting for those who are about to graduate?

ANSWER: PRC will still be PRC. Nothing will happen to them. They can schedule exam, but must not lower the qualification set by law – examinees must be graduates of 4yr BS REM. If no one will qualify, then the exam room is empty – we expect the empty room to happen at the minimum in the next 4 years.

3. Do we have an inventory of existing colleges and universities who have adequate number of enrolees?If yes, will the number be sufficient to really impose sec 14b without prejudice to those who can have practice real estate services from other related courses?

ANSWER: We don’t care to know what university offers BS REM because we are already licensed Brokers – but maybe CHED have that information. The onset of implementation of Sec 14B is not based on number of students or graduates, but the onset is based on the condition that as soon as the CHED curriculum is implemented which is at the beginning of School Year 2012-2013 (June 2012), the completion of BS REM becomes a requirement for taking the exam. The 14B prejudices non graduates of BS Real Estate – that is THE LAW. Any party who feel prejudiced may file a legislative agenda in PRC for PRC to forward it to Congress and Senate. As Convenor of IPORESP, with me is a long list of Legislative Agenda, and despite urgency, my position is that the law will apply while the law is not amended. Do you want to hurry the Legislative Agenda? If yes then you sign-up in IPORESP. Frankly, if you will not sign-up in IPORESP, we will not be able to sympathize with you, and we will block and oppose your legislative agenda.

4. What is the IRR for Sec14b? Can it not expressly allow those under allied courses and those who have Master's Degree in Land administration and Management to take Real Estate Exam for promotion purposes in those who are in government service like that of the LGU Assessment Offices?

ANSWER: For Government positions, Sec 33 will apply, “Within three (3) years from the effectivity of this Act, all existing and proposed positions in the local and national governments, whether career, permanent temporary or contractual, and primarily requiring the services of a real estate service practitioner, shall be filled only by registered and licensed real estate service practitioners.” Onset of implementation of Sec 33 would be July 29, 2012.

5. We will have a long backlog in the assessment department because under CSC MC No. 20 Series 2012 Qualifications Standards of Assessor and Appraiser Positions qualifications set must have RA 1080 eligibility RE: real Estate Licensure Exam.

ANSWER: We are aware of that. The solution is simple. Let your Human Resource Department do their job. Advertise the vacant position or get a list and address of licensed Brokers and Appraisers in PRC and send them invitation for the job. We have a lot of jobless licensed Brokers and Appraisers, more than enough to fill in your recruitment backlog. I myself is a JOBLESS LICENSED BROKER -- wanna hire me? I have a civil service professional eligibility certificate.

QUESTION: Rltr. John, I have a question. Do you see any problem in including the Assessors in RESA?

ANSWER: One of the difference between MO 39 and RA 9646 is the inclusion of Assessors in the Real Estate Service. They say I am a genius in justifying RA 9646, but honestly, I cannot think of a way on how to "harmonize" the Assessors with the other types of Real Estate Service licenses. If I were involved in the decision-making to whether include the Assessors or not in the RA 9646, I would have voted a NO and would argue that we study it further. Assessors, really, does not fit-in the Real Estate Services. There should be a Legislative Agenda to release the Assessors from PRC regulation. Civil Service Commission, as a regulatory body, is sufficient to regulate the Assessors.

If I would reason out, I would say that private interest is so different compared to public interest. With Assessors included in the realty service, there will be an ENDLESS debate in the development of the Code of Ethics.

QUESTION: Sir John, I am an Assessor, what other information we, Assessors and Assessor wannabes should know?

ANSWER: For the Assessor wannabes, tell them that I am inclined to remove the Assessors from the clout of RA 9646. We will do it by Legislative Agenda. Assessors are better regulated by Civil Service Commission only, not PRC. Assessors and Regional Directors of Registry of Deeds can avail of Realter Society membership for FREE. Membership in Realter Society will enable you to earn the right to use the Rltr title. Please read the Realter Society website.

QUESTION: Sir John, the PRC is giving Appraiser License to Assessors under the grandfather clause. Did they do the right thing?

ANSWER: No. It is wrong. Assessor is a SEPARATE license under RA 9646. PRC should give Assessors under grandfather clause a Assessor License, not Appraiser license, not Broker license. An Assessor who wants to become a licensed Appraiser or licensed Broker must take the licensure exam for Appraiser or Broker.

1/28/2013

Consumer Rights Advocacy, possibly a new specialization in real estate service

I hope that consumer complaints will all be prevented and fairly addressed in the future. I have two solutions for that,

(1) Developers to hire an external Consumer Rights Advocate as independent contractor on retainer basis who will resolve consumer complaints, and review and make recommendation for reforms in their business process; the mere fact that they would have Consumer Rights Advocate is already a bragging rights that can magnet consumers, (buyers and investors);

and/or

(2) Developers to test-drive the Realter-Society's JSA -- it already includes a Consumer Rights Advocacy package.

Almost all companies have Customer Care units such as malls, department stores, banks, etc. and they even spend a lot in Call Centers to serve their customer needs without necessarily meeting them face-to-face. Real Estate companies should also have such service providers. Consumer Rights Advocacy is one of the possible new specialization in real estate service. Count me in, first in the line-up.

1/23/2013

The legal way to avoid VAT - two steps only

I have been coaching here for over four years for free, with over 1,400 unique readers per month, but most readers could not even SUBSCRIBE to this blogsite. I rarely send a blog alert by email, so I did not notice this discrepancy until recently. Why not subscribe? It's not difficult, and it is free. Look at the right panel, there is a button there that says Subscribe [Step 1] Join this site and Subscribe [Step 2] -- I hate it when I notice a reader who is not in the subscriber's list! Please subscribe now, and when subscribe action is completed, you will receive the article titled: "The legal way to avoid VAT - two steps only" in the next RESC NewsLetter. I will send the article by email only to those I see in the subscribers panel.

The three types of broker-salesperson agreements

QUESTION FROM EMAIL: Rltr. John, what can a salesperson sell and not sell?

ANSWER: It depends on the agreement he entered with his Broker. There are three types of agreements: (1) Employer-Employee Agreement aka EEA, (2) Freelance Independent Contractor Agreement aka FICA, and (3) Joint Supervision Agreement aka JSA.

JSA

The JSA is a unique, innovative, copyrighted tripartite agreement that can only be availed if the Salesperson, Broker, and Developer are members of Realter Society. In JSA, the Salesperson pays the Broker P3,000 for annual training, minimum of P12,000 annually for the supervision, plus registration fees in PRC and HLURB -- but the Salesperson gets 100% of the commission. In JSA, the Salesperson sells only and exclusively projects that are carried by the Developer or Bank who signs his JSA booklet. In JSA, the Salesperson has a list of 56 Prospective Buyers (approved by the Broker and Developer) at the beginning of the JSA, the Salesperson will work on his Customer list for the entire year workload, and is paid by the Developer with a PF for each formal Sales Presentation plus Commission. The Salesperson under this JSA scheme is paid a PF for sales presentation because he trained hard through the sales presentation training course of the Developer and becomes an expert on a single project or two -- he can make a sales presentation with all the proper gestures without looking at any script. If the US Military have Navy Seals, the Developer have JSA Salespersons -- the ultimate sales machine who is 100% loyal to the Developer. JSA is a copyrighted agreement and has a warranty against defects. A fourth party, the founder of Realter Society, is the warranty provider, the supreme administrator, dispute judge, consumer rights advocate, and troubleshooter of the JSA.

FICA

In FICA, the Salesperson pays the Broker P3,000 PF for annual training, minimum of P12,000 PF annually for the supervision, plus registration fees in PRC and HLURB -- and the Salesperson and Broker makes an internal agreement on the commission sharing scheme. The FICA allows the Salesperson to sell whatever he wants, provided he will facilitate and get the necessary accreditation with the Developer/Bank for the Broker and for himself. Under this scheme, it is up to the Salesperson to negotiate his own agreement with the Developer, Bank, and Broker. A salesperson who wants self-determination, independence, and freedom is advised to choose this scheme -- he can maintain his PRC/HLURB registration and sleep all year without working as long as he pays the supervision professional fee of the Broker. Nevertheless, a Salesperson under this scheme can also seize the opportunity of freedom to maximize the span of his wings, maximize the listings and accreditation, and achieve unlimited income. No Developer would pay Sales Presentation Professional Fee (PF) to a FICA Salesperson. Disputes under this category will be resolved by IPORESP and may escalate to National Labor and to PRC.

EEA

Salespersons under EEA are trained by the Broker for free and paid by the Broker with minimum wage and standard government mandated benefits. In the EEA, the Salesperson is limited only to selling properties that the Broker is accredited or authorized to sell, except properties that the Broker have signed a JSA with another Salesperson within the Broker firm. Under this scheme, it is up to the Broker and Salesperson to internally come up with an agreement that will determine who pays the training, supervision, reg fees in PRC and HLURB, and the commission sharing scheme. Aside from doing salesperson job, the salesperson under the EEA scheme works 8 hours a day, so he can be ordered around by the Broker to render multi-task work as secretary, receptionist, book-keeper, documenter, errand, handyman, motorbike driver, lease presenter, cleaner, and even as in-house masseur of the Broker firm. No Developer would pay Sales Presentation Professional Fee (PF) to a EEA Salesperson. Disputes will be resolved in IPORESP, National Labor, and PRC.

BROKER'S SALESPERSON PORTFOLIO

Each Broker can only have a maximum portfolio of 20 Salesperson under the current RA 9646. Not all Brokers and Salespersons are born alike and in the same circumstances - there are those who wants to be a great salesman, those who just wants an employment badge, and those who wants wages. Each Broker will have to consider all factors around him/her and make a business decision on how to allocate his/her 20 Salespersons across the three types of broker-salesperson agreements: (1) Employer-Employee Agreement aka EEA, (2) Freelance Independent Contractor Agreement aka FICA, and (3) Joint Supervision Agreement aka JSA. In terms of Broker's workload, the heaviest is EEA, medium is FICA, and lightest is JSA. There is no promise as to which type will render the highest earning for the Broker; but in terms of risks associated with cost of operating a Broker's office , the safest is the JSA and FICA.

DIRECT PAY AUTHORIZATION FORM (DPAF)

QUESTION: Sir John, RA 9646 Sec 31 says, "No salesperson shall be entitled to receive or demand a fee, commission or compensation of any kind from any person, other than the duly licensed real estate broker who has direct control and supervision over him, for any service rendered or work done by such salesperson in any real estate transaction." My question is, can Salespersons receive commission directly from Developers?

ANSWER: It depends on what type of broker-salesperson agreement is entered into. The important thing is, as long as the Broker must authorize the payment, then it is perfectly legal -- there can be a Direct Pay Authorization Form (DPAF) for that purpose.

DPAF would be an internal form in the Broker firm and the form will specify the following: (1) the citation of the Agency Agreement that is used as legal basis of the compensation, (2) how much should the Developer pay to the Salesperson and how much should be paid to the Broker if there is a sharing scheme, (3) when should the payment be made, (4) the bank account information to where the payment should be made, (5) indication as to the type of tax to be withheld at source to be applied to the Broker firm such as income tax, percentage tax, or VAT, and of course (5) name, license number, PTR#, TIN# and signature of the Broker and Salesperson. By the way, whenever the Developer/Seller pays commission to the Salesperson or Broker, it should always issue a Withholding Tax Certificate; and take note also that persons with income below the taxable income threshold are exempt from income tax.

In JSA, the Salesperson is engaged only to one Developer, and it's rather simple because the Direct Pay Authorization is already incorporated in the JSA.

In FICA, it is complicated because the Salesperson is independent and engaged with several Developer/Seller, hence the Salesperson must have the Broker sign the DPAF each time he expects payment.

In EEA, the Developer can only pay to the Broker firm and never directly to any on its Salesperson employees. The Broker must issue Official Receipt for the payment.

PDAF eliminates the need for Broker to issue Official Receipt. Direct pay from Developer/Seller to the Salesperson is good because it prevents double taxation -- we don't want the Salesperson's compensation unfairly reduced by a two-layer taxation. The principle is, if the Broker authorizes it, then that's the manner the Broker wants the commission paid. If anyone or the BIR would counter my opinion, IPORESP can always have the RA 9646 revised on a rush via urgent Legislative Agenda.

1/21/2013

Here's a good deal for Salespersons

QUESTION: Rltr. John, what is your deal for the Salespersons?

ANSWER: Under the Garapata Regime, Salesperson pays around 15,000 for 120 hours Salesperson Seminar, and still has to find a Broker with whom he will share the percentage commission. There will soon be reforms.

Under the IPORESP system, Salesperson pays P3,000 for the required seminar because we will reduce it to 16 hours. Then Salesperson pays his/her own Broker P12,000 per year as Professional Fee compensation for the independent Salesperson Supervision and Management Contract. Under the Realter Society JSA, the developer is co-supervisor on the Salesperson and will have a free-hand on the deployment of the salesperson. Salesperson gets 100% of the commission from his/her developer of choice. A Broker with 20 Salesperson can survive as the Professional Fee for Salesperson Supervision will generate a sure bread-and-butter of P240,000 a year.

QUESTION: Bersabe Asis: do you man the broker will have no share on the sale of thier salesperson only 12,000 per year?

ANSWER: Under the Independent Salesperson scheme, the Salesperson gets 100% of the commission. If the Broker wants share of the commission, there is another scheme called employment scheme wherein the Salesperson is an employee of the Broker. The Broker have a choice on how to "diversify" his Salesperson portfolio. It depends on the Broker how many Salesperson employee he wants and how many independent salespersons he wants.

If I were to make a portfolio for myself, I would want to have 18 Independent Salespersons, one salesperson assigned to one Developer. And then I want to have 2 Salespersons working in my office on anything from errand, book keeping, secretary, documentation, and special brokerage operations.

The commission is theirs, 100%, but I need the 18 Independent Salesperson to bring in to my office all clients and customers so I will earn PROFESSIONAL FEES.

QUESTION: Sir John, how do you make sure the Broker actually supervise the salesperson?

ANSWER: That is very simple question. You read the Professional Fees. The Broker need to stamp clearance on Reservation Form, Contract to Sell, Deed of Sale, etc. Before a Broker stamps on the document, there is a strict IPORESP Due-Diligence Procedure. Any consummated transaction of Salespersons will end up into documents that would need a Broker's Stamp and so supervision will naturally come along with it. Of course there is Professional Fee for every stamping -- the customers will pay for that.

QUESTION: Is that Professional Fee rates fixed and mandatory? Could that go any higher or lower?

ANSWER: That is the minimum. It can go higher but never lower. For example, a Broker whose office is located in the Ortigas Business District is more accessible compared to a Broker with office in a far residential area somewhere in the mountains of Antipolo. Accessibility has a premium, so the Broker in Ortigas Business District may command a higher Professional Fees. We let the Salesperson choose.

Brokers pays for rent, overhead, electricity, water, VAT, business permits, license requirements, and daily work in office. The business risk is too high if the Broker's office will depend only on commissions. That is why Professional Fees are incorporated in the new set-up to ensure bread-and-butter and survival of Broker offices. Survival of the Broker, at the minimum, is one of the primary concern of IPORESP. On how to become rich, that's the Broker's free-hand to play the game of managing his Salesperson portfolio over and above the minimum survival line.

SHARING SOME THOUGHTS FROM EMAIL

PREVIOUSLY COLORUM, NOW A LICENSED. CHAT MESSAGE: "Dear John, I used to be a colorum for over 11 years. I studied and passed the exam and now I am licensed. Few years back you were my enemy when I read your crusade statement against colorum. But things change already. Now, I already feel the same way as you, irritated withso many colorum around. But I hate my colorum boss, she fired me immediately after I got my license. Out of pride, I started my own realty business, income is very low because there is no bread and butter, no professional fees. So I have to shut down my realty business and I'll go back to my old business as car dealer. The licensing strike that you are commanding is is good for all of us, hence I will obey. My wife says I will only go back to real estate when you succeed in pushing the professional fees. God bless!"

PROFESSIONAL FEES FOR SALESPERSONS?Question: Rltr. John, ako po si ____, salesperson lang po asawa ko, apat po anak namin. Colorum kami dalawa noon, ngayon salesperson na asawa ko. Nagbayad kami ng malaki para sa 120 hours na Salesperson seminar, pero okay lang kasi binigyan siya ng certificate kahit hindi na siya pumapasok sa Seminar, so nakatipid pamasahe. Pero masaklap kasi taon-taon daw ang Seminar so bayad kami ng malaki taon-taon para sa certificate. Ako housewife lang. Noon meron silang natatanggap na P150 allowance galing kay maam (developer) kada araw na mag manning sila doon sa gate ng subdivision. Ngayon po na madalang na po ang benta, natigil po ang allowance nila. Paano nyo po matutulungan ang mga Salesperson na magkaroon naman sila ng source ng bread and butter katulad ng Professional Fees?

ANSWER: Ang salesperson ay hindi "lang". Without Salespersons, walang mabebenta na real estate. Wow, okay yan, apwn na biyaya ng Dyos. Mabuti naman at legal na angpag bebenta ng asawa mo, hindi na colorum. Yan pong FRAUD sa seminar attendence ay source po yan ng hanap-buhay ng mga garapata na seminar providers, mga corrupt na nagpapahirap sa bayan natin.

Kahit anong profession, kailangan merong source ng bread and butter, aka Professional Fees. I will think it over kung papano i-insert sa Joint Supervision Agreement [JSA®] ang Salesperson Sales Presentation Fee na kailangan bayaran ng Developer sa Salesperson everytime na makarating sa point ng formal sales presentation ang Salesperson sa isang customer na naka-lista sa JSA®. Anyway, sa JSA®, 100% ng commission ay mapupunta na sa Salesperson. Ibababa din natin ang entry-level Seminar to 16 hours. Ang initial thoughts ko, kung nag train naman ang Salesperson on formal sales presentation ng project, I think we can include P2,000 Professional Fee na babayaran ni Developer to the Salesperson pag makapag actual na Sales Presentation siya sa customer na officially listed sa JSA® Booklet. So, 56x2000=P112,000 a year ay pwede na siguro. Iisipin ko pa eto ng maayos.

QUESTION: Sir John, magiging isang beses lang ba ang PF ng Salesperson kahit dalawang beses siya mag present? First time sa bahay/office ng buyer and second time sa tripping project site or show-room. Saka lang ba babayaran ang PF pag maka-benta? ANSWER: Good question. The Developer will pay PF in each presentation. Maybe the rate will be P2,000 for regular and P3,000 for presentation during tripping. Salesperson's PF has time, effort, and execution of trained skill, so it will have to be paid by the Developer/Seller whether the buyer signs a reservation or not.

QUESTION: Sir John, what can a salesperson sell and not sell?

ANSWER: I will answer that in a separate blog, titled: "The Three Types of Broker-Salesperson Agreements".

1/20/2013

CEOs of Top Real Estate Developers

When the blog titled, "How Law Enforcement Catch Colorum in Bulk" materializes, the tycoons can afford to pay their corporate penalties for engaging the colorum real estate agents. But how about the individual colorum persons? Can the small ones afford the fine and imprisonment?

FERNANDO ZOBEL DE AYALA
Chairman of the Board
Ayala Land, Inc
29/F, Tower One, Ayala Triangle
Ayala Avenue, Makati City 1226

DAVID M. CONSUNJI
Chairman of the Board
DMCI Holdings, Inc.
3rd Floor Dacon Building
2281 Don Chino Roces Avenue
1231 Makati City
Philippines

LUCIO C. TAN
Chairman of the Board
Eton Properties Philippines, Inc.
8th Floor, Allied Bank Center
6754 Ayala Avenue
Makati City, Philippines

ANDREW L. TAN
Chairman of the Board
Megaworld Corporation
28/F The World Centre,
330 Sen. Gil Puyat Ave.
Makati City, Philippines

FREDERICK D. GO
Director, President and COO
Robinsons Land Corporation
Level 2, Galleria Corporate
Center EDSA corner Ortigas Avenue
1100 Quezon City,
Philippines

MARCELINO C. MENDOZA
Chairman of the Board
Vista Land & Lifescapes, Inc.
Upper Ground Floor, Worldwide Corporate Center
Shaw Boulevard,
1552 Mandaluyong City
Philippines

HENRY T. SY, JR.
Chief Executive Officer
SM Development Corporation
One E-com Center, 10th Floor Harbor Drive
Mall of Asia Complex, CBP-IA
1300 Pasay City
Philippines