Can You Afford That Property?

There you are looking at the classifieds, searching for the perfect home for you and/or your family. You don't want to get the services of a broker because you thought you'd have to pay him/her (FYI, you don't) so you're going to take your chances and find something on your own, your pride depends on it!  Well, OK, sure, why not, it's your prerogative if you don't want to get the services of a broker, but just so you know, you don't HAVE to pay the broker/agent.  Let's clarify some terms before we move on to the meat of the story.

An agent may or may not be a licensed broker.  An agent is somebody utilized by the developer to market their properties.  In that sense, even a licensed broker may work as an agent for a developer.  However, a salesperson is somebody who works for a licensed broker.  So if you were looking to find a property that is no longer owned by the developer (resale properties), then you should not be talking to an agent, you should seek the assistance of a licensed broker or a salesperson who is accredited under a licensed broker.  So if you want a property that is still sold by the developer, talk to an agent working in-house for the developer, or find a salesperson with a broker who's accredited with the developer, or the broker himself.  If you want a resale property (property that's being resold), then look for a salesperson accredited under a broker, or a broker, not agents. 

Why look for a broker or salesperson accredited under a broker?  Well, the seller is the one who pays the broker/salesperson the commission, not the buyer.  Of course, if you want to give the broker/salesperson some incentive for helping you out, or you're so very happy with the service extended to you, then you may do so, but you are under no obligation to.  In fact, if the broker is being compensated by one party (either buyer or seller), he should make it known to the other party so the other party may choose not to pay the broker anymore.  So really, it's to your best interest to get the assistance of a licensed broker or an accredited salesperson (or an in-house agent) if you're buying property because IT'S FREE!

Now, once you find that dream property, how do you know if you can afford it?  It's really easy.  Well, I say easy in terms of computing for it, not in terms of affording it.  That's up to you!  If you know the monthly amortization, how do you know what your gross income should be to find out if you can afford the monthly payments?

• Monthly amortization / 30% = Gross income needed

If all you have is your gross income, how much can you afford in monthly amortization payments?

• Gross income x 30% = Monthly amortization

Let's have an example:  Your gross monthly income is P50,000.  How much monthly amortization can you afford to pay?

• 50,000 x .30 = 15,000

Another example:  The ad you saw says that the monthly amortization is P12,000 for 15 years.  Your gross monthly salary is P30,000  How do you know if your income can pay for that?

• 12,000 / .30 = 40,000 (Since you only make 30k a month, you can't afford it)

Now don't feel bad.  This isn't the end of the world.  You have other options.  One is to look for a bank or lender with lower interest rates.  Another is to look for a co-borrower.  One other option is to look for a lower-priced property.  You could also opt for in-house financing, if it's available.  Yet one more option is to marry a rich guy or girl... Just kidding!  If you can find an acceptable property priced just right, and find a lending institution that has low interest rates (preferable less than 10%) fixed for 10 years, then that would be great.  After doing your due diligence when looking for a good bank, make sure you ask your broker to help you figure out if it's the best deal.

Good luck!

Jon

Update: PRC Accreditation For Real Estate Salespersons

As promised, I'm back with the update on how to be accredited as a real estate salesperson with the Professional Regulation Commission (PRC).  This is known as PRB-RES (Professional Regulatory Board - Real Estate Service) Resolution No. 13, amendment to Section 31 of the RESA Law IRR (Implementing Rules and Regulations).  The major change is the deadline: from July 30, 2011 to December 31, 2011.  This deadline only applies to those who have been salespersons for 3 years or more AND are not at least 2nd year college level.  There is no deadline for those who want to be salespersons AND are at least 2nd year college level.  Without further ado...

The applicant shall follow these steps:

1. Submit the filled-up or accomplished application with supporting documents for pre-evaluation to the Office of the Secretary, PRBs or of the Assistant Secretary, PRBs (3rd floor, Main Bldg) at the PRC Central Office, or Regional Offices processing counters.
2. Proceed to the cashier for payment of fees - P600.00 (Ground floor, Main Bldg.)
3. Proceed to the Customer Service Center for metered documentary stamp (same)
4. Submit duly accomplished application form to the Office of the Assistant Secretary, PRBs (3rd floor)
5. Verify the status of your application at the PRC website: www.prc.gov.ph

Supporting documents for NEW or existing real estate salesperson with no DTI/HLURB registration:

• Original and photocopy of NSO birth certificate / Certificate of Live Birth
• Original and photocopy of NSO marriage certificate (for married females only)
• Original and notarized Certificate of Educational Attainment on the completion of at least two (2) years of college
• Original NBI clearance (valid for the current year)
• Original and notarized Certification of twelve (12) credit units on Real Estate Brokerage (12 CPE units)

Supporting documents for existing real estate salesperson with DTI/HLURB registration:

• Original and photocopy of NSO birth certificate / Certificate of Live Birth
• Original and photocopy of NSO marriage certificate (for married females only)
• Original and notarized Certificate of Educational Attainment (at least High School diploma)
• Original NBI clearance (valid for the current year)
• Original and notarized Certification from his/her DTI-licensed real estate broker or HLURB-registered real estate developer
• Original and photocopy of DTI/HLURB Certificate of Registration as Salesperson
• Original and notarized Certification of at least One Hundred Twenty (120) hours of training and seminar, to be issued by the employer or provider (60 hours classroom lecture or seminars and 60 hours of training or fieldwork)

Supporting documents for existing real estate salesperson with at least three (3) years of active practice:

• Original and photocopy of NSO birth certificate / Certificate of Live Birth
• Original and photocopy of NSO marriage certificate (for married females only)
• Original and notarized Certificate of Educational Attainment (at least High School diploma)
  
• Original NBI clearance (valid for the current year)
• Original and notarized Certification from his/her supervising licensed real estate broker or HLURB-registered real estate developer
• Original and notarized Certification of at least One Hundred Twenty (120) hours of training and seminar, to be issued by the employer or provider (60 hours classroom lecture or seminars and 60 hours of training or fieldwork)

Some more information about the accreditation:

• The Registration Division shall notify the accredited salesperson to enroll their names in the Roster of Accredited salespersons after they shall have paid the prescribed fee.
• Within a reasonable period, the enrolled accredited salespersons shall be issues their identification cards (ID), containing the data or items that are material to the use thereof in their practice as real estate accredited salespersons.
• The said ID shall be renewable every year for a period of one (1) year from his/her birth month.
• The Board (PRB-RES) and the Commission (PRC) shall have the right to cancel, withdraw, confiscate, or not to renew such ID upon violation of any law or rule or non-compliance with the conditions or obligations set forth therein.

There you have it, the implementing rules and regulations for getting accredited as a real estate salesperson with the PRC.  I'm sure some people will be saddened by the fact that the PRB-RES specified only existing salespeople with a high school diploma are eligible to get registered until December 31, 2011.  We can only hope that they'd see fit to amend it once more and soon, at least until the deadline.

Finally, many thanks to www.foreclosurephilippines.com for this.  For more information about real estate and foreclosures, visit Jay Castillo's site, too.

Happy Selling!
Jon

Real Estate Salespersons: What Do You Need To Know?

So you want to be a real estate salesperson?  Great!  Before the RESA Law (Republic Act 9646), things were simpler, and you could dive right in and start selling real estate.  It's different now, especially with the advent of the RA 9646 and its implementation.

For your information, according to the RESA Law (R.A. 9646), real estate agents can only be accredited under a licensed real estate broker:

Section 31. Supervision of Real Estate Salespersons. - For real estate salespersons, no examination shall be given, but they shall be accredited by the Board: Provided, That they have completed at least two (2) years of college and have undergone training and seminars in real estate brokerage, as may be required by the Board. Real estate salespersons shall be under the direct supervision and accountability of a real estate broker. As such, they cannot by themselves be signatories to a written agreement involving a real estate transaction unless the real estate broker who has direct supervision and accountability over them is also a signatory thereto. No real estate salesperson, either directly or indirectly, can negotiate, mediate or transact any real estate transaction for and in behalf of a real estate broker without first securing an authorized accreditation as real estate salesperson for the real estate broker, as prescribed by the Board. A real estate broker shall be guilty of violating this Act for employing or utilizing the services of a real estate salesperson when he/she has not secured the required accreditation from the Board prior to such employment.

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. (this means that the broker will be the one who will collect payment and then pay you.) 

No violation of this provision shall be a cause for revocation or suspension of the certificate of registration of the real estate broker unless there was actual knowledge of such violation or the broker retains the benefits, profits or proceeds of a transaction wrongfully negotiated by the salesperson. 

In other words, once you're accredited under a licensed broker, all your real estate activities will be under the broker, including your listings and commissions.  If you decide to break away from the broker, you will have to file for accreditation with the PRC again under a different broker.

For simplicity's sake, here's a table I made to show you the requirements for PRC accreditation:

In case you can't see it, feel free to right-click on it and download it for your convenience.

If you'd like to see what topics might be included in a 12 CPE units seminar, check out Urban Institute's page.  Typical costs for taking the 12 CPE units training range from 1,500 to 1,800.

I can't give you any info yet about how much PRC accreditation will cost as they have not released any information regarding that.  I will update this blog post as soon as I get information.

Additionally, after accreditation, you need to:

• Get registered with the HLURB - this is required if you are going to engage in project selling such as condominiums, townhouses, etc.
• Get acquainted with the different taxes that you are required to pay such as withholding tax, income tax, percentage tax and e-vat.  Check out the BIR's page for more information.

For now,  if you want to be an accredited salesperson, find a licensed broker, take the 12 CPE units seminar, order your NSO birth certificate and NBI clearance, and get everything else in order.  Once the PRC releases the final guidelines, you'll be ready! 

By the way, I'm a licensed broker hehe!
Jon

Flyering: Are You Tough Enough?

Okay, so a couple of weeks ago I sent out a survey to get a good feel of what people thought of sales agents doing the usual marketing activity fondly called flyering.  For most, flyering is an activity that is met with derision, dread, shame, and even downright fear.  For some, the "tough as nails" sales people, it's a walk in the park.  I daresay you have to experience flyering at least once if you're in sales, just to be in their shoes, and to better drive home the point that yes, sales is an "in your face" occupation.  The faint-hearted and the timid will definitely cringe at the thought of handing out flyers, just as I used to.  Past-tense?  Not quite there yet.

My first booth-manning session to market Tropicana Garden City at SM Marikina went by uneventfully, with me just sitting there chatting with the battle-tested folks I was blessed to be with.  I was too scared of rejection, and too shy to approach strangers, so I just sat there and watched them do their thing.  Well, I figured I was gonna have to get my feet wet sometime...  So today was my 2nd manning schedule at Blue Wave Mall in Marikina.  Again, I was sharing the booth with Tita Fe, the 70-year old lady (whose life story I already know haha!) and I was determined to finally stand up and reach out!  I stood up, and with my flyers in hand, I smiled, greeted the person who was passing by, and handed the flyer.  I couldn't believe how easy it was once I decided to just do it!  I gave out 5 flyers total, and not one rejected me.  Yeah, 5 flyers, hardly anything to be proud of at this stage of my career, but hey, it's a good start!  Let me share the results of my survey here, the reason why I was more confident:

• Dress well, be presentable.  You'd probably shy away from a stranger dressed shabbily too, wouldn't you?  No t-shirts and slippers, please.
• Once you approach, approach with a smile and a greeting.  People will find it hard to ignore you once you approach with a smile and a simple "Good afternoon sir/ma'am" while offering the flyer.
• Don't be pushy.  If the person asks for more information, that's the only time you should attempt to ask for contact details.  If the person refuses, don't be persistent, just ask the person to contact you anytime once they're willing to find out more.

Here are the full results of my survey, so you can judge for yourself.

So am I tough enough for sales?  I'm getting there my dears, I'm getting there.  Soon, maybe I'll even actually get to sell something!

Want to buy the moon?

Jon

Real Estate: Why Should You Bother With Licensing or Accreditation?

I guess many unlicensed real estate agents/brokers are thinking: "Why should I bother with licensing/accreditation?  It's not like anyone's gonna do anything about it anyway."  There are sales managers and directors that aren't licensed when they should be, and sales agents that aren't accredited because their manager isn't a licensed broker.  So, why indeed should they bother?

Well, it's a LAW.  In case you didn't know, the Real Estate Service Act Law (RESA Law), otherwise known as Republic Act 9646, was passed in June 2009, seeking to professionalize the real estate industry, to protect consumers as well as licensed professionals from the "unscrupulous" practices of unlicensed practitioners.

Should you be worried?  After all, it's been almost 2 years and nobody has gone to jail for being unlicensed or for not being accredited.  See if this strikes you as menacing enough:

Article V, Sec. 39.  Penal Provisions - Any violation of this Act, including violations of implementing rules and regulations, shall be meted the penalty of a fine of not less than One hundred thousand pesos (P100,000) or imprisonment of not less than two (2) years, or both upon the discretion of the court.  In case the violation is committed by an unlicensed real estate service practitioner, the penalty shall be double the aforesaid fine and imprisonment. 


So without a license or accreditation, under the pain of imprisonment and/or a fine, practice real estate at your own peril.

How does this affect those sales managers and directors working for developers?  Let me state the pertinent provision:

Article IV, Sec. 32.  Corporate Practice of Real Estate Service
a)  No partnership or corporation shall engage in the business of real estate service unless it is duly registered with the Securities and Exchange Commission (SEC), and the persons authorized to act for the partnership or corporation are all duly registered and licensed real estate brokers, appraisers or consultants, as the case may be.  There shall be at least one (1) licensed real estate broker for every twenty (20) accredited salespersons.


b)  Divisions or departments of partnerships and corporations engaged in marketing or selling any real estate development project in the regular course of business must be headed by full-time registered and licensed real estate brokers.


There you have it, very clear and straight to the point.  Do yourselves a favor and get licensed, so you can get your salespersons the necessary accreditation for them to continue selling for you.

Think you have time?  At the recent oath-taking ceremony, the Professional Regulatory Board of Real Estate Service (PRB-RES) mentioned that by 2014, a Bachelor's degree in Real Estate Service might be implemented by the Commission on Higher Education (CHED).  If and when that happens, the Professional Regulation Commission (PRC) will make that college course mandatory before you can take the licensure examination.  If you don't want to go back to school just to get your broker's license, I suggest you take the 120 CPE units now, and take the next licensure exam this coming November 2011.

Or, you can continue thinking that you can get away with it and not do anything.  As Forrest Gump said, "Life is a box of chocolates, you never know what you're gonna get."  Pray it's not a fine of P200,000 and a 4-year prison term.

Hopefully,
Jon