Client: Juan, how do bank-financed purchases work? Do I have to pay the seller 20% upfront? What if something goes wrong—do I get my money back? JPRE: For bank-financed purchases, the buyer pays the equity portion, usually around 20% of the purchase price, while the bank finances the remaining 80%. The bank does not release the 80% immediately. Instead, it issues a Letter of Guarantee—essentially a promise to pay the seller once the title is transferred to the buyer's (your)

Once upon a time, a broker was about to close the sale of a property. They were already at the stage of signing the Contract to Sell (CTS) and receiving the earnest money — usually one of the final steps before the transaction moves forward. The sellers, siblings who inherited the property, agreed to meet the buyer at a bank. The broker did what brokers normally do. She reminded both the buyer and the seller the day before and again on the morning of the meeting. The broker e

What is a “hurdle rate,” and what does it have to do with real estate investments? A hurdle rate is the minimum return an investor requires before deciding to pursue an investment. If the expected gain/return is below that threshold, the investor simply turns down the investment. In real estate, investors often compare their hurdle rate against a property’s rental yield—the annual rent divided by the purchase price. If the yield meets or exceeds the hurdle rate, the property

One useful trick in real estate is learning how to estimate the size of a space just by looking at it. Here’s a simple method. Step 1: Use a car as your measuring stick Imagine a Toyota Fortuner. A Fortuner is common enough that most people can picture its size. Step 2: Place the car in the space Mentally park the Fortuner inside the area you’re trying to estimate. At the corner. If it helps, imagine standing beside the car: • the driver’s door • the back seat • the trunk Onc

Continuing yesterday’s story, here are the practical lessons: 1. Earnest Money: Size Matters There’s no fixed legal rule on how much earnest money should be. In institutional deals, 10% of the purchase price is common. But in private transactions between individuals, the absolute amount may matter more than the percentage. The larger the earnest money, the larger the risk if something goes wrong. Its purpose is to show commitment — not to create financial damage. Sometimes, a

Once upon a time, a broker was about to close what looked like a relatively smooth deal. After weeks of negotiation, the buyer and seller finally agreed on the price. To formalize the deal, the seller required 10% of the purchase price as earnest money — amounting to several million pesos. The buyer pushed back. The broker, fearing that asking for another concession might derail the sale, explained that 10% is common practice in many transactions, especially when the seller w

Here’s a practical tip I picked up from a fellow broker on how to minimize notarial costs when closing a sale — without cutting corners. The situation When you submit a Deed of Absolute Sale (DOAS) to the BIR, many RDOs require a separate document called an Acknowledgment Receipt (AR) stating that the seller has received the full consideration indicated in the DOAS. Technically, most DOAS templates already contain a clause like: “Receipt of which is hereby acknowledged by the

If you ask most lawyers whether they’re knowledgeable in real estate transactions, they’ll likely say yes. But in practice, not all lawyers operate at the same depth. Real estate is one of the most regulation-heavy areas of law in the Philippines. Tax rules evolve. BIR issuances change. Court rulings reinterpret old principles. What worked five years ago may already be outdated. That’s why I prefer lawyers who specialize in real estate — not those who just “handle” it occasio

Client: Juan, how do you price a land lease? JPRE: What exactly is being leased? Client: It’s a portion of land inside a larger commercial compound we developed in XXX. There’s already an existing commercial building in the compound, but this specific tenant wants to lease an undeveloped section and construct their own structure. How should we price it? JPRE: There isn’t a single, market-standard formula for pricing land leases like this. Unlike condos or office spaces, where