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Nov 6, 2014

Five Questions every OFW should ask before buying a Property

With the Christmas season fast approaching, many overseas Filipino workers are readying their hard-earned cash to purchase their first home.

They say that Christmas is the season of giving. But for many overseas Filipino workers (OFW) returning home for the holidays, it is also the season for some serious home shopping.

In fact, according to Enrique Soriano III, Program Director for Real Estate at the Ateneo de Manila University–School of Business, many OFWs spend all year saving enough down-payment cash for their first home, and they usually remit this cash by December when their purchase decisions are finally made.

An observation Claro dG. Cordero, Head of Research, Consulting, and Valuation at JLL Philippines, shares: “More property transactions occur at the end of the year when many of these OFWs have performed oculars of the properties they’re looking into buying.”

With the Christmas season fast approaching, a great number of OFWs are already researching on their home purchase, and come December, many of them would be ready to buy. However, since a home is perhaps the most important purchase any person can make, it only make sense that due diligence should be made.

Lamudi Philippines has compiled the following questions to ask to make the decision easier for every OFW.

1. What do I Intend to do with the Property?

Will the property be used a primary residence for the OFW family or an income-generating asset? The OFW must first determine this in order to inform his or her decision on what type of property to buy, where to buy, and even when to buy.

When looked from the financial perspective, a home purchase makes a lot sense if the property will be used as the primary residence of the OFW family. Hence, the property should meet the requirements of the OFW’s family (size, location, type, etc.). Buying a home will give the OFW and his family a sense of financial security and watch their investment grow in the long term through capital appreciation.

However, buying property strictly as an income-generating asset presents a different challenge, which will be tackled in the next item.

2. Who Will Manage the Property?

If the OFW is buying a property to eventually have it rented out, then it is a different matter. A crucial question to ask should be, “who will manage the property while the OFW is out of the country.”

If the property is in Metro Manila and the OFW’s family lives in the province, then it will make sense to hire an agent that will double as a property manager. They will take care of finding and screening prospective tenants, scheduling viewings, collecting rent, and overseeing the property’s upkeep, among many others. According to Angela Manese, Residential Division Manager at estate agent KMC MAG Group, it is very crucial who looks after the property while the OFW is away. After all, that person will be key to making the investment property a profitable one.

3. Which Developer to Choose?

They say that due diligence can go a long way, especially if the OFW is buying a preselling property. Hence the importance of choosing the property developer cannot be overemphasized.

An OFW buyer can count on an established, publicly listed developer to deliver on its promise because it has a reputation to protect. In addition, established developers are generally well funded, so they are highly unlikely to default.

4. Should I Inspect the Property?

Whether it is a condominium in Makati or a house in Cavite, make sure that you have physically inspected the property before buying it.

Although this may mean making a trip or two back home, but the cost would be worth it. A homebuyer who does not inspect the property runs the risk of discovering major defects at a point when the deed of sale has already been signed—and the property can no longer be returned.

However, some OFWs will have to make do with asking someone they trust (a close relative, for instance) to do the inspection for them. If possible, make a to-do list for the appointed inspector, and even ask the person to send pictures or even videos of the property.

5. Should I Ready Extra Cash for the Closing Costs?

When buying a piece of real estate, the seller takes care of the capital gains tax and the broker’s commission, while the home-buyer takes care of the documentary stamps tax (1.5 percent of the property’s selling price), transfer tax (0.5–0.75 percent of selling price), registration fee (Php8,796 for properties whose selling price is Php1.7 million or lower, plus an additional Php90 for every Php20,000 in excess of Php1.7 million), and notarial fee (1–1.5 percent of the property’s selling price).

For example, an OFW buying a Php1.7 million property needs to ready approximately Php59,800 for the closing costs.

Launched in 2013, Lamudi is a global property portal focusing exclusively on emerging markets. The fast-growing platform is currently available in 28 countries in Asia, the Middle East, Africa and Latin America, with more than 600,000 real estate listings across its global network. The leading real estate marketplace offers sellers, buyers, landlords and renters a secure and easy-to-use platform to find or list properties online. For more information, please visit http://www.lamudi.com.ph


  1. I always like to read such post about the property investment.Choosing the best rental property is important thing before buying the rental property.this post will help the investors in selecting the correct property for investment...

    Investment Property UK .

  2. it is the genuine post about the real estate.

  3. thanks for the article

  4. Good point! Know first your intention then find a good location. Don't forget this aspect every time you are planning to buy house and lot or any property.


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