If you are interested to purchase a foreclosed property, all banks have a different approach but the majority of them are required to submit the signed Offer to Purchase/Buy Form together with initial requirements.

The standard requirements are

• Two (2) valid government-issued ID’s

• Income document like ITR or COE with compensation, Marriage Contract, or Certificate of No Marriage (CENOMAR) for single.

In case the buyer is a corporation:

• SEC registration, Articles of Incorporations, by-laws, Board Resolution / Secretary’s Certificate Authorizing the purchase of the property.

Some banks if applicable are required earnest money in postdated checks of 5-10% of the indicative price. The Offer form can be given during property showing or via email.

Yes, for Anti-Money Laundering Act (AMLA) compliance. The management will give equal treatment for both cash and loan transactions.

Our suggestion, if we are looking for faster turnover of the property and processing of the loan. It would be better to apply for a loan from the bank where we shall buy the foreclosed property. If the foreclosed property is from BPI, then we should apply for a loan from BPI.

The majority will just require a duly filled out Offer to Purchase/ Buy form together with initial requirements, though some banks may require 5-10% of the offer price earnest money in post-dated check.

We will help you to apply the home loan application, and we will do it directly to the head office for swift process of the application.

Upon receipt of the completely filled out Offer Form with initial requirements we have 2-5 working days depending on the bank, clearing period of the Offer. Should there be other offers received for the same property within the time period, the highest/ best offer shall be endorsed to the management committee for approval, or the bidding process may take effect. If there are no other offers received, the only offer will be submitted to the management committee for approval. BPI is the only exemption, they conduct bidding usually every month for their new properties. All their regular properties for sale are first come first serve basis offers. The entire process of approval including the loan is usually 2-3 months more or less if cash transaction 1-2 months more or less.

We can assist you in the transfer of the documents under your name at a minimal service fee only.

No hidden charges, just the standard government taxes, and fees of 4-6% of the contract price. The bank will also settle the 6% CWT / CGT up to its contract price only.

1. Find a Broker specializing in foreclosures.

2. Get pre-approved for a mortgage, and submit a Letter of Intent to buy, subject to bank approval

3. Study the sale prices of comparable homes in your area.

4. Bid the Higher price, if homes sell quickly

5. Remember, the home is sold "as is where is" basis, do your due diligence.

6. Find a contractor/skills worker who can assess and repair damage

What are the other expenses or other responsibilities of the client?

Buyer shall shoulder the ff:

• Title Registration fees,

• Documentary Stamp Taxes,

• Transfer taxes and other relevant expenses are on buyers' accounts.

• Who will evict once the property has an occupant?

• The property is occupied and as an interested buyer, we are reminded that all property is being offered for sale on an “As-is, Where-is” basis "The buyer is buying a property in whatever condition it presently exists and that the buyer is accepting the condition of the property" and are advised to conduct their own due diligence.

• If the property you bought is occupied by the former owner or illegal settlers (the person who defaulted on the mortgage and lost the house to foreclosure), the bank sends a notice to vacate and address the occupants/ illegal settler's name at the property.

• That's why we encourage the buyer to make an ocular inspection first to the property and these are sold on an “As is, Where is” basis.

• (The same with properties with the case, the buyer will shoulder the present condition of the property)

• Disclaimer:

• The sale shall be on an “as is where is” basis

• All offers are subject to change to Management Approval

• Availability of units and prices are subject to change without prior notice

• Misprints should not be construed as misrepresentation of the property

In general, only Filipino citizens and corporations or partnerships with at least 60% of the shares owned by Filipinos are entitled to own or acquire land in the Philippines. Foreigners or non-Philippine nationals may, however, purchase condominiums, and buildings, and enter into a long-term land lease.

K&C assists foreigners, expatriates/ex-pats, former Filipino nationals, OFWs, Balikbayans, and corporations purchasing and acquiring real property in the Philippines and can provide relevant information on Philippine laws and regulations regarding property purchase and acquisition, reviewal of general contracts, asset protection contracts, deeds of sale, taxes, and entire estate planning. In addition, we can introduce you to local real estate brokers to assist you in finding the type of property you are looking for in the Philippines.

Can a Foreigner Own Land in the Philippines?

Ownership of land in the Philippines is highly-regulated and reserved for persons or entities legally defined as Philippine nationals or Filipino citizens. For this purpose, a corporation with 60% Filipino ownership is treated as a Philippine national.

Foreigners or ex-pats interested in acquiring land or real property through aggressive ownership structures must consider the provisions of the Philippines’ Anti-Dummy Law to determine how to proceed. A major restriction in the law is the restriction on the number of foreign members on the Board of Directors of a landholding company (which is limited to 40% foreign participation). Another concern is the possible forfeiture of the property if the provisions of the law is breached.

Are there any exceptions to the restriction on foreign land acquisition?

Yes, there are. The list of exceptions to the restriction is as follows:

• Acquisition before the 1935 Constitution

• Acquisition through hereditary succession if the foreigner is a legal or natural heir

• Purchase of not more than 40% interest in a condominium project

• Purchase by a former natural-born Filipino citizen subject to the limitations prescribed by law (natural-born Filipinos who acquired foreign citizenship is entitled to own up to 5,000 sq.m. of residential land, and 1 hectare of agricultural or farmland).

• Filipinos who are married to aliens and able to retain their Filipino citizenship (unless by their act or omission they have renounced their Filipino citizenship)

Can a Corporation Own Land in the Philippines?

Foreign nationals, ex-pats, or corporations may completely own a condominium or townhouse in the Philippines. To take ownership of private land, residential house and lots, and commercial building and lots, they may set up a domestic corporation in the Philippines. This means that the corporation owning the land has less than or up to 40% foreign equity and is formed by 5-15 natural persons of legal age as incorporators, the majority of which must be Philippine residents.

Can a Foreigner Lease Real Estate Property in the Philippines?

Leasing land in the Philippines on a long-term basis is an option for foreigners, ex-pats, or foreign corporations with more than 40% foreign equity. Under the Investor's Lease Act of the Philippines, they may enter into a lease agreement with Filipino landowners for an initial period of up to 50 years renewable once for an additional 25 years.

Can a Foreigner Own Residential Houses or Buildings in the Philippines?

Foreign ownership of a residential house or building in the Philippines is legal as long as the foreigner or expat does not own the land on which the house was built.

Can a Foreigner Own Condominiums or Townhouses in the Philippines?

The Condominium Act of the Philippines (RA 4726) expressly allows foreigners to acquire condominium units and shares in condominium corporations up to 40% of the total and outstanding capital stock of a Filipino-owned or controlled condominium corporation.

However, there are very few single-detached homes or townhouses in the Philippines with condominium titles. Most condominiums are high-rise buildings.

Can a Foreigner Married to a Filipino Citizen Hold a Land Title in the Philippines?

If holding a title as an individual, a typical situation would be that a foreigner married to a Filipino citizen would hold the title in the Filipino spouse’s name. The foreign spouse’s name cannot be on the Title but can be on the contract to buy the property. In the event of the death of the Filipino spouse, the foreign spouse is allowed a reasonable amount of time to dispose of the property and collect the proceeds or the property will pass to any Filipino heirs and/or relatives.

Any natural-born Philippine citizen who has lost their Philippine citizenship may still own private land in the Philippines (up to a maximum area of 5,000 square meters in the case of rural land). In the case of married couples, the total area that both couples are allowed to purchase should not exceed the maximum area mentioned above.

Can a Former Filipino Citizen, Balikbayan, or OFW Buy and Register Properties Under Their Name?

Former natural-born Filipinos who are now naturalized citizens of another country can buy and register, under their own name, land in the Philippines (but with limitations in land area). However, those who avail of the Dual Citizenship Law in the Philippines can buy as much as any other Filipino citizen.

Under the Dual Citizenship Law of 2003 (RA 9225), former Filipinos who became naturalized citizens of foreign countries are deemed not to have lost their Philippine citizenship, thus enabling them to enjoy all the rights and privileges of Filipino citizens regarding land ownership in the Philippines.

How to Gain Dual Citizenship in the Philippines

• If you are in the Philippines, file a Petition for Dual Citizenship and Issuance of Identification Certificate (pursuant to RA 9225) at the Bureau of Immigration (BI) for the cancellation of your alien certificate of registration.

• Those who are not BI-registered and overseas should file the petition at the nearest embassy or consulate.

Requirements:

• Birth Certificate authenticated by the Philippine National Statistics Office (NSO)

• Accomplish and submit a Petition for Dual Citizenship and Issuance of Identification Certificate to a Philippine embassy, consulate, or the Bureau of Immigration

• Pay a processing fee, schedule, and take an “Oath of Allegiance” before a consular officer

• The Bureau of Immigration (BI) in Manila receives the petition from the embassy or consular office. The BI issues and sends an Identification Certificate of Citizenship to the embassy or consular office.

If a former Filipino who is now a naturalized citizen of a foreign country does not want to avail of the Dual Citizen Law in the Philippines, he or she can still acquire land based on Batas Pambansa (BP) 185 and RA 8179, but limited to the following:

For Residential Use (BP 185 – enacted in March 1982):

• Up to 1,000 square meters of residential land

• Up to one (1) hectare of agricultural farmland

For Business/Commercial Use (RA 8179 – otherwise known as the Foreign Investment Act of 1991):

• Up to 5,000 square meters of urban land

• Up to three (3) hectares of rural land

Month 1 – Day 1 to Day 30: Submission of Requirements (Please refer to Requirements Section)

Month 2 – Day 5th or 20th: 1st Monthly Equity or Down payment

Month 2 to 16: Monthly Equity or Down payment

Month 25 –House Inspection and House Turn-Over

What is a Reservation?

Reservation is from Php 10,000 to Php 30,000 depending on the house model.

It is non-refundable but will make as part of your down payment.

It can be transferred to another unit or person provided it is from the same agent and developer. (Valid within 120 days from Reservation) A transfer fee will be charged to the buyer. 1 to 2 weeks approval.

When will the 1st Equity/Down Payment Make?

The first monthly Equity or Down payment will start either on the 5th or the 20th hit date of the following month upon Reservation.

Example: Reserved a unit on Jan. 1. First monthly equity or down payment will start on Feb. 5. Succeeding payments deadline will be on every 5th of the month.

When do you start to pay the Monthly Amortization?

First Monthly Amortization will start a month after finishing payments of monthly equity/downpayment. It will not coincide with the downpayment. (Hindi po magsasabay)

The amount and duration will depend on the loan and term applied for.

How do we go about the turnover of the unit?

The buyer will receive a Clearance for Inspection (CFI) from the developer stating that the house is ready for inspection. The buyer will be given 2 months to inspect and make a repair request for the house. (Under Developer Listing)

The buyer will issue a letter of acceptance when everything is well.

(Please refer to your chosen property developer policy)

Yes, there is. Aside from 2 months to make repair requests for the house upon completion, the buyer will also be given one whole rainy season to inspect the house. If found to have a leak, the Developer will make repair FREE of charge. (Please refer to your chosen property developer policy)

1. Get the Monthly Amortization based on the sample computation regardless of years.

2. Then divide the MA by 30% = Required Income

Sample: 14,500 / 30% = 48,000 required income

1. Regular employee or owner of a profitable business for at least 2 years.

2. Has no Credit Management Association of the Philippines (CMAP) Credit Score finding.

3. Has no pending court cases.

4. For further info, kindly search “Basis for bank Housing Loan Approval”

• Capital Gains Tax

A capital gain occurs when you sell something at a price higher than you spent to buy it.

Capital gains tax or CGT is a type of tax levied on the earnings gained from selling capital assets. In order to determine whether a property is a capital asset, it should not fall under any of the following definitions: (a) stocks held by the taxpayer in trade or inventory; (b) properties for sale in the ordinary course of business; (c) any property used in business that the taxpayer claims for depreciation; and (d) real property used in trade or business.

Capital gains tax is equivalent to six percent of the fair market value based on the Bureau of Internal Revenue(BIR) zonal value or fair market value as appraised by the provincial or city assessor, whichever is higher. These values are currently being updated by BIR in line with the Tax Reform for Acceleration and Inclusion” (TRAIN) Law.

• Real Property Tax

Real Property Tax or RPT is simply an annual due for owning real property (land, building, improvements, and machinery). RPT is imposed by Local Government Units (LGUs) as a way to increase their revenue to fund basic public services.

The base of the tax is only a fraction of the actual market value of the property, and the taxable fraction or the assessment level depends on the use of the property(whether commercial, residential, agricultural, etc.). For example, a residential property has an assessment level of 20 percent (which means only 20 percent of the property’s value is taxable), while for a commercial property, it is 50 percent.

These values are currently being updated by BIR in line with the Tax Reform for Acceleration and Inclusion” (TRAIN) Law.

• Documentary Stamps Tax

Documentary stamps tax or DST is the tax charged on documents, instruments, loan agreements, and papers evidencing the acceptance, assignment, sale, or transfer of an obligation, right, or property.

When a property is transferred through sale, DST is imposed on the Deed of Absolute Sale, whose tax rate is 1.5 percent or Php15 for every Php1,000 of the property’s selling price, zonal value, or fair market value, whichever is higher. For example, if a property’s selling price is Php3 million (and if this amount is higher than the property’s zonal value or fair market value), the DST will be Php45,000.

• Transfer Tax

The Bureau of Internal Revenue defines Transfer Tax as the tax imposed on any mode of transferring the ownership of real property, either through sale, donation, barter, or any other mode. The rate varies from 0.5 percent to 0.75 percent of the zonal value or selling price of the property, whichever is higher and depending on the municipality where the property is located.

• Donor’s Tax

Donor’s Tax is a tax on a donation or gift (in this case real property) and is imposed on the free transfer of property between two or more persons (whether strangers or related) who are living at the time of the transfer.

The donor’s tax for each calendar year is now at a uniform rate of 6 percent under the Tax Reform for Acceleration and Inclusion” (TRAIN) Law.

• Estate Tax

Estate Tax (more colloquially known as Inheritance Tax) is a tax imposed on the privilege of transferring property upon the death of the owner to the lawful heirs. In addition, Estate Tax is based on the net estate, which is the difference between the gross estate and allowable deductions. Ownership of real property cannot be transferred from the decedent to his or her heirs without the filing and payment of the estate tax.

To know how to compute Estate Tax, visit the BIR website. These values are currently being updated by BIR in line with the Tax Reform for Acceleration and Inclusion” (TRAIN) Law.

The following is the basic information you should know about Direct Housing Loan:

Eligible borrowers are Filipino citizens. Foreign nationals are allowed for condominium purchases only. However, a purchase of house and lot or vacant lot will be considered if a foreign national is married to a Filipino citizen and an Affidavit of Support and Waiver of Rights over the collateral property are executed by the foreigner.

Borrower’s age should be at least 21 but not more than 65 years old upon maturity of the loan for locally employed. Not more than 60 years old for OFW.

Principal borrowers must have an income source as a regular employee or from a business with a minimum profitable operation of 2 years.

The amount of loan you can borrow depends on your income (capacity to pay) and the appraised value of the property.

The interest rate that will be applied to your loan will be the prevailing Bank rate at the time of loan release.