What is buying foreclosed property in the Philippines?
Buying a foreclosed property means bidding on a property such as a lot, house lot, or condo that is still under amortization or still being paid by the mortgagor. In other words, someone has already paid for the partial price of that property.
While paying for the remaining amounts, he decided to “foreclose” it or let the company find another person to assume the said property.
Where to look for foreclosed properties?
You can find acquired or foreclosed properties from the following:
- PAGIBIG or HDMF – by experience, it is better to go personally to PAGIBIG, ask for the map for you to check the property before bidding.
- Banks
- Banko Sentral
- Developers such as subdivision developers – as a real estate
- Youtube channels or social media accounts (but make due diligence to contact the mortgagee e.g. bank)
How to buy a foreclosed property
- First, look for listings from the providers listed above such as PAGIBIG or banks. Ask for the list best suited to your goals or needs;
- Second, don’t make photos as the major factor in making the decision. Better visit the property and realistically assess whether the house is in worse or good shape. Photos may lie. Consider the factors I listed down below. If the house or property is in decent shape, consider that a strobe of luck.
- Third, when you do the bidding, bid based on the most realistic assumption. Consider the factors below and do your due diligence such as researching the zonal and assessed value, market price, and potential for growth.
Things to consider in buying a foreclosed property
It is better to consider various factors if you assume the mortgaged property, your effort, and stress are worth the value or profit you will gain from the property. The operative word is due diligence and taking time wisely to consider the factors. But sometimes, shopping for foreclosed properties takes a bit of luck.
Before bidding, it is better to check the property personally. Check the following:
Repairs: Check the house’s condition to see if it is a house and lot. See if the need for repairs will not cost you more than the price you save from buying the foreclosed property. Tip: Bring an expert carpenter, contractor, or engineer with you to help you determine if the deal is worth it.
Neighborhood. Ask the neighbors if there is flooding in their area during the rainy season. Exercise due diligence by asking for reliable sources.
Ask them about security, peacefulness, and safety. Consider its distance to the key places of your life.
If there are squatters or problems that you don’t like, don’t touch them. Sometimes banks or PAGIBIG will be transparent in telling you that there are occupants.
Ask the occupants. Talk to the tenants or occupants if there are any. Many foreclosed properties still have tenants. Ask them if they are willing to leave once you assume the property. Ask them how long before they leave. There are cases where, during the bidding, there were no occupants in the house, but afterward, suddenly, there were occupants inside, and they had a challenging time having them leave the property.
Downpayment. If you buy a foreclosed property from a bank, ensure you have prepared for the downpayment to assume the property. After a few months, you can finance the remaining amount through the said bank. The interest in the bank is usually higher than that of PAGIBIG/HDMF. By experience, the foreclosed properties of banks no longer have occupants inside.
Assume via PAGIBIG/HDMF. I have heard testimonials where people reached out to their loved ones working inside PAGIBIG and let them do the bidding of the properties because they enjoy lower prices and rates.