Almost all websites about Cebu with information about real estate will try to sell you properties; the following is probably the only objective non-commercial guide to real-estate in Cebu City. Since Wa'y Blima! Cebu received a disproportionately large amount of email on this subject, this section was overhauled in January, 2005, and will continue to be expanded with more detailed information as we find the time.
The price of housing in Cebu is far lower than in comparable cities in the West. Conditions are also considerably different from Manila. Our capital city is an oversized metropolis like New York or Tokyo, where condominiums are a viable option due to the time it takes to commute to the suburbs. Cebu is different; while there are some condominiums in Cebu, it makes much better sense to live in a house. Condominiums do not offer any advantages in terms of location - since commuting times are measured in minutes rather than hours - and the Cebuano lifestyle is hard to fit into a condo.

That leaves renting or buying a house. Renting a house in Cebu is far easier than in Manila, where landlords commonly ask for payments of one years worth of rent in advance. The standard in Cebu is two or three months in advance, and two months deposit. Rates are quite low; 50,000 pesos (US $1,000) per month will easily get you a multi-bedroom, multi-bathroom house with a pool. One disappointing aspect may be the yard; Filipinos, spoilt by the richness of the natural environment, do not attach much important to gardens. As a result, the lot will often be taken up almost entirely by the building.

One thing to watch out for when renting a house is the security deposit. Most contracts stipulate that this should be returned to the tenant when the tenant moves out and no major damage has occured. However, for some reason landlords in Cebu have a hard time letting go of money already in their bank accounts. Very often, landlords will use all manner of tactics to hang on to the security deposit; the most common one is stalling. Sadly, in a suprisingly large number of cases, the only way to get it back is to have your lawyer send a demand letter threatening legal action. This usually does the trick - though legal cases take a long time to resolve and are terribly expensive to pursue, the mere existence of the suit would cause sufficient blemish to the landlord's reputation.

The cost of building a house is lower, too. Quality architects and civil engineers abound, and the supply of skilled carpenters and masons remains plentiful even though many have gone to Manila and overseas. Thus, even though the price of cement went through the roof in 2004 - thanks to Senator Mar Roxas, who headed the Department of Trade and Industry at the time and signed into law protectionist measures - a high quality concrete-based dwelling can be built for just a few million pesos.

Unlike houses in, say, Japan, the houses in Cebu do not differ wildly from those in the West. There are just a few minor things to note.

One is the bath. Europeans may be disappointed by the scarcity of houses with bathtubs; Filipinos shower regularly and often - at least once a day - but will not immerse themselves in a bathtub (although they may refer to the act of showering as "taking a bath"). Moreover, the showers are most often cold. It is ironic that visitors from northern climes will complain about the fact that the showers lack water heaters or that the hot water from the flimsy gadget attached to the showerhead - the supposed heater - is tepid at best. In Cebu, the expression "hot shower" is best translated as "cold to moderately lukewarm shower."

The other is the kitchen. Well, the kitchen itself will probably be normal, but there will be another one nearby, called a "dirty kitchen." A dirty kitchen is usually not within the house itself, although it may share a wall or two. If you have a servant or a cook, the dirty kitchen will be where most of the cooking will actually take place, in addition to the plucking of chickens, the barbecuing over hot coals, etc. The lack of a dirty kitchen in condos is one reason condos do not mesh easily with the Cebuano lifestyle (although some condo occupants do start barbecueing in the hallways).

Note that Cebu does not have a sewage system, so toilets drain into a septic tank. In case you're not familiar with that, a septic tank holds solid waste that will not liquify, and is emptied by a pump truck about once every ten years. Do NOT open the lid of your septic tank; the methane gases are fatal. You'll know that your septic tank is full if you get backflow from your toilet, or CR as toilets are called in Cebu.

Electrical sockets are of the same type as those used in the US and Japan (which look like this: I I ) but the juice itself comes in the form of 220 volts at 60 Hz. Sometimes - usually at nighttime - it will be less, and sometimes it will be more, depending on overall demand from your neighborhood; one of the first investments you should make to protect your expensive and sensitive first-world appliances is to buy a gadget known as a voltage regulator. These retail between 1,500 and 10,000 pesos, depending on the capacity (mine cost about 3,500). Momentary power outages are common, so if you have a desktop you'll also need a UPS (uninterrupted power supply). These cost at least 5,000 pesos.
Appliances sold in Cebu are designed for 220 volts, but the plugs are often European (round) or British (humongous). So when purchasing an electrical appliance check the plug, and, if necessary, also get an adaptor.

While wood continues to be a favored construction material even in countries such as US and Japan, it is advisable to opt for concrete in Cebu. Because of the prevailing climate a cooler and more comfortable house can be built using concrete rather than wood - unless one opts for a traditional nipa or buli shack made from bamboo, which is superbly cool and comfortable (the name of the hut refers to the type of thatching for the roof). In addition, the quality of appliances and wiring is often substandard, and a concrete house is much more fire-resistant than a wooden house. In Cebu, most but not all high-end housing is built using concrete. Concrete curtain walls are constructed using cinder blocks - known as concrete hollow blocks or CHB's - which may be either 4 inches or 6 inches wide - and strength is often provided by reinforced concrete beams and columns rather than beams or columns of pure steel. This is standard practice even for high-rise buildings.

Lastly, it should be noted that the living room or sitting room is known as the sala in Cebu, even when conversing in English.

The traditional type of Cebuano house is on a street somewhere near the center of the city and has a big iron gate. This type of housing, while still abundant, is becoming less popular, as those who can afford it move into the suburbs. In any case, houses of this type that still do exist have been occupied by the same family for generations, and are hardly ever for sale or rent. You might as well discard it from your list of options.

That leaves the new arrival with a choice of living in a condo or a subdivision. There are broadly speaking three types of subdivision, and all three are referred to as a "village" by Cebuanos.

First, there is the classic gated community, with a security guard at the entrance and a residents' association which employs a team of janitors to keep the streets immaculate. Residents are required to put stickers on the windshields of their cars, and visitors have to leave their driving licenses at the guardhouse. The developer of the subdivision will have constructed the streets but not the houses, which will have been built by the residents themselves. In the interest of clarity, this type of village will henceforth be referred to as a "subdivision."

Second, there is a classic gated community that has deteriorated into an ordinary neighborhood. The security guard will have long gone, and the guardhouse itself may no longer exist. In most instances, it will not be obvious that the neighborhood was once a village except by the comments of residents referring to it as such. This type of village will not be covered here, though perhaps I should mention a few: there's Singsong in Mandaue, Fairlane in Guadalupe, and St Martin's, also in Guadalupe.

Third, there is the gated community in which all houses will have been built by the developer of the subdivision. Such housing is usually aimed at the lower income bracket, and can be surprisingly small in scale - just a few units of tiny houses. The houses are usually identical or one of several types. The cookie-cutter subdivision will henceforth be referred here as a "development."

Since Cebu is a long and narrow island, residential areas can be broadly divided into North, Uptown, and South. Anything near the Capitol is Uptown. Whereas in Mactan the upscale residential areas are clustered along the sea, in Cebu City they are clustered along the hills. In the north there is Apas, Banilad and Talamban. In the south is Guadalupe, Labangon, and Pardo.

There are people living in areas other than these, of course, and there are even villages all over the city, but the upscale areas which the upper to middle income Cebuanos prefer, and which most expats choose to live in, are largely confined to these areas.

The Cebuano lifestyle does not fit easily into a condo, and there are plenty of houses available within a few minutes from the city center. Hence, there are very few condos in Cebu City, and most condominiums are favored by expatriates from Manila or overseas. It must be said though, that most condo units offer a spectacular view of the city and the sea, ironically because there are few tall apartment buildings messing up the skyline.

The oldest condos are the Winland Towers, located within a few hundred yards from the Capitol. There's two of them. Being the oldest, their value has fallen. Another set of two towers is Park Towers 1 and 2, in the Cebu Business Park (by the Ayala Center). These are somewhat shorter but very prestigious. The third set of towers is the Citylights Towers, located in the hills near the defunct Cebu Plaza Hotel. I hear that most of the units are occupied by Japanese expats. Citylights will be expanded to included towers 3 and 4, though these haven't broken ground yet (as of January, 2005).

If you're looking for a condo, brokers will probably offer you a unit in the Trinity, on Escario Street, which is on its way to become an urban slum and has a lot of vacant units.

The Buenaventura is grand condo complex in Guadalupe; units are spacious with at least 150 square meters and much in demand.

In Banilad, right next to the flyover, is the Sentinel, owned by Santa Lucia. Sophia Suites, also in Banilad, is located behind the Gaisano Country Mall. Both are luxury developments. I believe Sophia Suites have long-term stay plans for visitors staying a few months.

On Mactan, there's the Hilton Towers. Although the complex is far from completion, the two residential towers may have become fully occupied by the time you read this. I hear the aftermarket has already got underway. Much older than the Hilton is the condotel next to the Quantum Resort.

The three most prestigious subdivisions to live in are Beverly Hills, Maria Luisa Estate Park, and North Town Homes. While high-end housing can be found in other subdivisions, these three developments are characterized by the density and depth of high-end houses.

All three are in an elevated areas, on the western or northern border of the city, but the views are best in Beverly Hills and Maria Luisa. Beverly Hills is located in the hills above Lahug. It's not particularly large, but almost all houses are properties at the top end of the market, with market prices of 30 million pesos or higher. If you manage to find a place for rent in Beverly Hills, it should cost you at least 120,000 pesos a month. Some of the properties are spectacular; five stories of glass-fronted luxury that would not look out of place in the Californian town of the same name.

Maria Luisa, meanwhile, is a bit farther from the city, in Banilad, with a gate not far from the Gaisano Country Mall. It is much larger, and has grown from the original development (now known as Phase 1) far into the hills. In fact, it now has a back gate opening directly on the trans-central highway, in the mountain barangay of Busay. Phases 1 and 2 are on level ground, near the gate; it is considered, for some reason, a good thing to be near the gate. However, the traffic of cars going to deeper areas of the subdivision never abates, and it is much hotter due to the lack of altitude. Therefore, it would be preferable to find a place in the extension phases. Lots are still for sale in Phases 4, 6, 8 and 11, but most of these are in valleys where there is no cell phone signal, view, or breeze. Due to the sheer size of the subdivision, there will always be lots for sale and houses available for sale or for rent in Maria Luisa. While Maria Luisa was developed and is managed by the imperious Aboitiz and Osmena clans, Maria Luisa is unquestionably a prestigious and comfortable place to live. Water pressure is always strong and garbage collection is private.

Capitalizing on the success of Maria Luisa, Aboitiz recently launched a second luxury project in the hills on the other side of the city, in Guadalupe, called Maria Luisa South. Some rather attractive properties are starting to sprout there. In addition, the Maria Luisa brand is being used for some lower income developments.

Northtown Homes, located in Talamban, is the newest of the three, with wide streets and spacious lots. While not as prestigious as Beverly Hills or Maria Luisa, and slightly further from the city center, Northtown Homes is a neighborhood on par with the best the West has to offer. The subdivision has a huge and beautiful activities center, as well as a pool, but most private houses have pools too. There is a little known development of townhouses inside Northtown, with its own security - a development within a subdivision. Prices are reasonable but all units are of the same design.

The developer of Cebu's classiest mall, the Ayala clan, recently broke ground on a luxury subdivision in the sky, so to speak: Ayala Heights is located in the mountains, past Tops, about 13 kilometers from the city. The view is stunning and the location, by internatioanl standards, is excellent. But for Cebuanos Ayala Heights is still too far out from the city, and hardly any lots have been sold.

Near Maria Luisa are two high-end subdivisions on level ground, Paradise Village and St. Michael's Village. Both are extremely conveniently located, about five minutes from Ayala and fronting the Cebu Country Club golf course. Don't be worried about flooding; the street outside the subdivisions is prone to flooding but drainage within the villages is good.

Sunny Hills in Talamban is one of the oldest and most pleasant subdivisions. There are some nice houses there; I personally know of a superluxurious 50-million-peso mansion owned by a Belgian expat. But a lot of the houses are small and dingy.

Right next to Sunny Hills is Silver Hills, a compact high-end subdivision. Further down the road, heading towards the city, is Doa Rita, another excellent place to live, on moderately hilly ground. Across the road, on flat ground, is the huge Santo Nio village. You can find the most expensive mansions as well as fairly average housing there.

Behind Talamban, near the spanking new North General Hospital, is Mary's Village. A few kilometers further down the road is Mira Monte. These are still on flat ground but the terrain becomes hilly as one progresses further from the city. A large number of subdivisions are starting to sprout in the hills of Talamban, in the barangays of Bacayan, Pit-Os and Pulangbato. While access to that part of town used to be horrendous, the road has been improved lately, perhaps because of Cebu International School (located in Pit-Os) and the completion of the large-scale and luxurious Golden Haven Memorial Park, located about 30 minutes from Talamban proper in the mountain barangay of Binaliw.

Let's now take a look at the southern side of Cebu City.

There are quite a few subdivisions in Guadalupe. Apart from Maria Luisa South, there is the similarly named South Hills. Nearby are Guadalajara Subdivision and Nichol's Park, developed by Taft, the properties arm of the Gaisano Metro supermarket chain. Paseo San Ramon is a high-end subdivision; although all units were built by the developer of the subdivision, care was taken to ensure that the houses do not look identical.

Along the south road are three subdivisions developed by Santa Lucia: Altavista, Newtown Estates, and Vista Grande.

There aren't many subdivisions within the city. In Mabolo, at the end of the Ayala Access Road (aka F Cabahug Street) is San Vicente Village, on level ground and within 5 minutes from Ayala. Also on F Cabahug are Villa Aurora and Cassals Village.

You can check out these links for detailed lists of subdivisions in the Metro Cebu area.

Here is a very rough guide to the kinds of prices you'll be paying. Market prices are changing constantly, and - needless to say - prices vary considerably according to the individual characteristics of the lot or house in question. The information here should not be considered as more than a very rough indication of the relative valuations of the different areas in the city.

The most expensive real estate is still in the downtown area, traditionally the commercial heart of Cebu City. Prices peak along Colon and Magallanes Streets, at 70,000 or perhaps even 80,000 pesos per square meter. Average prices in the area are about 50,000. In contrast, in the upscale Banilad area, prices remain at around 15,000 pesos per square meter along Arch Reyes (aka Banilad Road), down from a peak of 27,000 prior to the Asian financial meltdown in 1997. Prime commercial land in the Cebu Business Park is still affordable at 25,000 - 28,000, and I'm told the minimum height requirement has been shelved.

Industrial land in the Reclamation Area, suitable for warehouses and distribution centers, ranges between 5,000 and 8,000.

Residential property is cheaper than prime commercial property. Probably the most expensive residential property is undeveloped land in the first two phases of Maria Luisa Estate Park, which goes for around 10,000 pesos per square meter. Although cooler and more comfortable, lots in the hilly phases retail between 4,000 and 6,000 pesos, depending on the view.

This is pretty much average for the higher end s. At Santo Nino village the prices also peak at 6,000 pesos per square meter, although not much of a view is available there. In the south, Altavista retails for around 5,000 - 6,000, New Town for slightly less, and Vista Grande for around 4,000.

In Mactan, the inland portions seem to be trading at around 1,000 per square meter.

Of the condos, the Park Towers are probably the most expensive, at 45,000 pesos per square meter. Winland has fallen to around 20,000 and Trinity is down to about 15,000.

Market prices are a bit hard to gauge in Cebu because brokers prefer to keep details of transactions to themselves - probably to avoid having the BIR (Bureau of Internal Revenue) come looking for them. Even professional assessment firms often have a hard time gauging the fair market value of a property.

In any country, buying real property is not simply matter of shaking hands, handing over the cash, and settling back with a cigar. In the Philippines, the process of purchasing real estate is particularly highly evolved.

For starters, you might not be purchasing real estate, per se. A lot of property developers, both reputable and fly-by-night, will try to sell you your house or condo, even though, technically, it doesn't exist. This is called pre-selling. The practice of pre-selling is so common that the brokers will often forget - not through guile, but genuine oversight - to tell you that you are buying a promise and a right, as opposed to bricks and mortar.

A sure sign of a pre-sale is that instead of photos, only drawings or computer-generated images are available. You can tell that the housing market, particularly in the middle and lower end of the market, is fairly tight in Cebu, because almost all brokers have exclusively pre-sale properties on their websites. Perhaps this situation will change as some major developments - both subdivisions and new condos - hit the market in 2007 and 2008.

Surprisingly, perhaps, most buyers do not worry too much about whether the property is a pre-sale so long as the company is reputable; in Manila, entire skyscrapers are pre-sold within months of being announced. And, it must be said, most of the time, the properties do get built. Eventually. Sort of. Sometimes, development is halted as the developer goes bankrupt, or gets embroiled in a legal battle with the local authorities about drainage or land rights.

Consequently, since the risks of a pre-sale are insanely high, and the whole ordeal is enough of an adventure for the visitor without throwing the idea of pre-selling into the equation, we strongly recommend against purchasing any non-existent properties. As with any purchase, it is best if you can touch, feel, and smell what you are buying, particularly if it will cost you your life's savings. And you need not worry - if you find the right broker, there will be plenty of actual, existing properties on the market for you to look at.

Now, on to the technical stuff.

The paperwork is deceptively simple: a real estate deal is closed with a Deed of Sale and a contract. The Deed of Sale must be an Absolute Deed of Sale. The contract should include a map (a technical description, produced by a surveyor), and must be signed on the margins of all pages by both parties and witnesses, as well as on the last page.

If you are a foreigner, there is the matter of not actually being allowed to own property. Although there are a few exceptions, you can not own any more than 40 percent of any lot. A condo can be owned outright as long as the total amount owned by foreigners is less than 40 percent of the entire condo. This is both good and bad; it's great to own something entirely in your own name, but risky since your property can easily be confiscated if for some reason foreign ownership has climbed - through oversight, bribery or simply imbalanced appreciation/depreciation - past 50 percent. But, as mentioned above, if you are settling in Cebu permanently you ought not to consider a condo anyway. In case of flatland houses and lots, you can either put the property in the name of your friend or spouse, or form a corporation. Though most expats - ignorant and impatient - opt for the former, I strongly recommend the latter; there are dozens and dozens of instances where differences unions have disintegrated with the foreigner left holding absolutely nothing. There was one instance in the newspaper recently in which a marriage fell apart and the husband was forced to rent a room from his ex-wife. Of course, there are countless partnerships still going strong after many decades, but if the statistics say that there is a chance that you'll get kicked out from your own house, why take a chance? Forming a corporation takes a little time but isn't that difficult.

A big issue is whether the lot in question is titled or not. In Cebu, some areas, particularly in the more rural areas, are not titled; i.e. no deed exists for the property. Buying an untitled property is more risky than buying a titled property, and this is reflected in the price. All other things being equal, a titled lot should command a much higher price than an untitled lot. Once purchased, a lot can be titled, but this takes a long time - between one and two years. The transfer of a title from one owner to another, on the other hand, can be done in as little as a few days.

Needless to say, if you buy an untitled lot, you should have it titled. Note that the Solicitor General, who works in conjunction with the Registry of Deeds, is tasked with reviewing the titling of properties and ensuring that landowners do not end up with more land than allowed, and that foreigners do not end up buying Philippine property. If it is obvious that the property is being bought by a foreigner, the issuance of the title may be delayed, or even denied. If you plan to have an untitled lot titled after purchase, this is one aspect to take into consideration. Although you can get your untitled lot titled, it is easier to get something that's titled to begin with.

Titles, sometimes known as patents, are issued by the Registry of Deeds, which in Cebu is located at the Capitol. Although situated within the seat of the provincial government, the Registry of Deeds is an entity within the national administration and is part of the Land Registration Authority, itself under the Department of Justice. This Registry of Deeds is where to check if titles are clean. Although a titled property is safer than an untitled property, there may be various problems even with a titled property. A title may be encumbered - mortgaged - or it may be a subject of dispute in the law courts. The LRA does record encumberances and liens but titles are as yet not computerized, and the type-written titles are often hard to make head or tail of. You should definitely have a trusted and experienced lawyer or a third-party consultant check out the title.

The situation is made more difficult by the problem of fake titles. They're hard to spot because they're not forged, just fake. In other words, the paper, the watermark, and the signature may all be real, but the lot referred to by the title will not exist in this universe. The only way to make sure that your title is genuine is by checking things out on the ground, as is the case for an untitled lot.

In common parlance, lots can be either titled or tax declaration. A broker may say something like: "That lot's just tax dec." This is because, if the lot is not titled, the ownership is based on the relatively flimsy concept of tax payments, i.e. who has been paying the real estate tax for that property. The real estate tax is payable to the municipal government (such as Cebu City or Mandaue City). Taxes are payable to the Office of the Treasurer. Tax Declarations - the equivalent of titles for untitled properties, often abbreviated to "tax dec" - must be verified with the Office of the Assessor. (Few people know this, but the Assessor's Office, though run by City Hall, is actually under the jurisdiction of the Department of Finance.) Of course, most rural land in Cebu is not titled, and some uninhabited remote areas don't even have tax declarations.

In addition to checking up on the tax payments, a copy of the absolute deed of sale by which the property was purchased by the seller should also be demanded from the seller (your seller will be the buyer on that deed of sale). That's just the paperwork. Especially in case of an untitled lot, it is of paramount importance to conduct an investigation on the ground, verifying with neighbors and caretakers who owns the land, what its boundaries are, and its history.

That brings me to the issue of caretakers. A good number of rural properties and even some urban properties will have been entrusted by the owner to a caretaker, who is to all intents and purposes a serf. This caretaker is expected to work the land and, in return for the right of abode, provide the landowner with a share of the harvest, which may range from 20 to 50 percent. Now, a caretaker may not necessarily be just one person. It may start off with one person, who will then bring a wife to live with him, who will in turn bring her siblings, parents, and cousins, and within the space of one generation dozens of families will be living on the property in question. If you do not like a clan of caretakers sharing your lot, it is, as a buyer and new lord of the fiefdom, entirely within your rights to ask the caretakers to pack up and go, even if they were born on that lot and grew up there. However, according to Philippine law and culture, alternate residences must be provided for any tenant of a property which has been the subject of a sale. This cost must be calculated and taken into consideration in addition to the nominal price of the lot.

Incidentally, one reason a feudal system does not exist despite these conditions is that, since independence, enlightened Philippine governments have passed laws to get rid of haciendas and hacienderos. The most amount of land any Filipino can own is 5 hectares. Of course, a lot of wealthy folks get around this by putting titles in the names of their children, cousins and maids, and corporations create lots of subsidiaries to own numerous parcels of adjoining land. The lack of computerization makes it hard for the authorities to hash out who owns exactly how many hectares. Interestingly, although authorities are often clueless, people on the ground do inevitably know who the real owner is. "That's all owned by So-and-So," they'll tell you, even if not even one of the many lots comprising the area is in So-and-So's own name.

Getting back to the issue of buying real estate, if you're purchasing an undeveloped lot in the hills, you should definitely do a background check to see if it is within a watershed area. Large tracts of land in the highlands may not be sold or developed; this is decided by CENRO (Community Environment and Natural Resources Office), run by the DENR (the national Department of Environment and Natural Resources) - not to be confused with PENRO (Provincial Environment and Natural Resources Office). In Cebu, Cenro is located not in the DENR building in Banilad but in the Reclamation Area, near Pier 3.

The Bureau of Lands, located in Banilad, meanwhile, is where to double-check the technical description of a lot; the Bureau of Lands is the depository of offical lot plans, and where to get permission to have a lot subdivided.

It is also essential to check that the purported seller has a right to sell the property in question. While some crooks try to pass off someone else's property as their own, the most common problem is spouses selling - whether intentionally or inadvertently - conjugal property without their partner's consent. The instution of marriage is solid and strong in the Philippines; one spouse may not sell off property or take out a loan without the consent of the other. Therefore, the consent - in the form of a signature on the contract and deed of sale - of the other spouse is required when a property is sold. Unfortunately, some couples are not on speaking terms, or one spouse may be overseas; in either case, the process can be delayed considerably.

The issues discussed thus far are just some of the major issues buyers need to be aware of. There are potential problems that you cannot even begin to imagine, often specific to a particular individual or corporation. In some cases, large-scale s have ground to a halt, for various reasons. For example, one of the largest developers, Santa Lucia, own a basketball team as well as developments all over the country, but units in some of their developments were recently frozen from resale due to irregularities in Santa Lucia's accounting practices. Some of their s never got of the ground - leaving those customers who had already paid for their lots stranded. In another, the developer of a in the south of Cebu City got entangled in a legal dispute about drainage, and a judge ordered the project halted - again, even though a number of units had already been sold. Such things are hard to foretell by visitors to Cebu, and it is not just advisable but essential to work with someone with experience and plenty of local knowledge.

The worst-case scenario would be having to recover your money through the law courts - though the Philippine legal system does work, it is painfully slow.

In conclusion, it is essential to have a broker who has been around for a few years to guide you through the process and help ensure that you do not end up with nothing, that you do not get overcharged, and that your property doesn't get tied up in a legal or administrative problem.

Lastly, there is the matter of closing costs. In case the seller is a corporation, a withholding tax of 7.5 percent applies, in addition to Value Added Tax (VAT) worth 10 percent of the gross sales price (the amount that goes on the Absolute Deed of Sale). For an individual seller, the capital gains tax is 6 percent, and no VAT applies. Meanwhile, buyers have to pay pony up roughly 2 percent of the sales price (documentary stamps worth 1.5 percent, a transfer tax of about 0.5 percent, and registration fees worth about 0.1 percent). The closing costs are often split between the buyer and seller by previous agreement.

Brokers typically receive 3-5 percent commissions; if multiple brokers are involved this is split between the brokers.

The real estate market in Cebu is somewhat underdeveloped. For starters, there is no real estate firm. Oh sure, there are plenty of developers only too eager to show you model units of their own particular developments. But there is no real estate corporation which you can walk into, look at data of a bunch of properties you like, and have an agent take you to the property.

There are plenty of lone-wolf brokers, but none have a decent office; almost all work out of their cars. Just about all of them will try to sell you a house at double or triple market value, simply because you are an ignorant foreigner with money coming out of your ears.

Consequently, finding a good broker is hard. You may be tempted to deal directly with the lot or house owner; I strongly recommend against this. In this country, there are issues you can't even begin to imagine, and you should definitely have someone knowledgeable check out the details of a deal, even if you managed to find the property directly.

Unfortunately, the majority of real estate brokers in Cebu are part-time realtors trying to make a quick buck, while running some other business. In fact, most of them are not licensed. Once it is known that you - a walking dollar sign to begin with - are interested in purchasing or renting a property, everyone and his mother - from waiters to taxi drivers to masseuses - will start offering you properties for sale. Moreover, the incompetent majority is supplemented by the crooked minority; quite a few purported brokers are unscrupulous characters who will not hesitate to pull one over for you.

Even many of the more honest brokers will not think twice about overcharging you, the rationale being that all's fair in love, war and the real estate business. One tell-tale sign is the first question they will ask you, usually not: "Do you prefer the hills or the sea?" or: "How large is your family?" or: "Will you be driving a car?" but more often than not: "How much is your budget?"

If you are silly enough to honestly answer this question, the common real estate agent will not strive to find something you will like and within your price range, but attempt to sell one of the properties in his portfolio for slightly higher than that amount. This is such common practice that when a broker manages to sell a cheap property to an ignorant foreigner for an outrageously high price, the common reaction is envy rather than disgust. For instance, at time of writing (late 2004) people were talking about how a certain broker with a high-profile website and a leadership position in an industry organization suckered an American client into paying 8 million pesos for a 4 million property in Maria Luisa.

Often, the seller and broker will know each other. This is not necessarily a bad thing, but in some instance they may band together to screw you, since you're the walking dollar sign. The broker may pretend to pressure the seller, even though both have agreed at which price to sell the property to the unsuspecting buyer. There was even one instance where the seller and broker connived to not only jack up the price, but also include part of a common area - the hallway - in the square footage of a condo unit. The buyer only found out when reselling the property years later.

The smart thing to do is to bring the broker around to your side by promising her a cash bonus if the price is brought down below a certain level - but this is only possible if the buyer has an accurate assessment of the fair market value of the property.

I should alert the reader about what to expect when discussing requirements with a broker. All Filipinos - not just real estate brokers - are for some reason prone to hyperbole. Someone in your town whom you may or may not have met is referred to as a "neighbor." A casual acquaintance is a "best friend." So it's not exactly a question of deceit if a broker tells you that a plot of land in the mountains is "rolling" (mildly hilly) even though in actuality it consists of jagged peaks and a crevace.

I once spoke with a friendly, earnest foreign national whose experience is fairly typical. He wanted to settle in the Philippines but wasn't quite sure where. Initially considering Bagio, he called up someone in that city who had placed an ad in a Manila newspaper regarding a house for rent. Inquiring about the house, the foreigner went to great lengths to describe his requirements in detail - talking about his family and his pets and such - and repeatedly told the owner that he needed a large house with a large garden. He was assured that the property was perfect for his needs. "When are you coming?" Worried that someone else might snatch up this rare mansion, the foreigner hurried to Philippines. The trek to Bagio was arduous. After driving for 8 hours from Manila, he arrived at 4 pm, dog tired and eager to see the house before sunset. Of course, the house turned out to be a small pension house replete with paying guests from Norway, and the "very big garden" turned out to be a few weeds sprouting next to a dumpster on the parking lot.

It must be said that housing in Bagio is more cramped in Cebu, but hyperbole is common in Cebu as well. "Right on the beach" could mean "several hundred yards from the beach". "Very near the beach" could describe any property in the lowlands. "Overlooking" could mean that the house provides a gorgeous vista of the cityscape from every room, or that a moderately pleasant view of a scraggly hillside can be had from a back window.

Rather than intentional misrepresentation, these are instances of hyperbole. The foreign visitor about to fly in to Cebu to look at properties would be advised to, rather than take any broker's statements at face value, gather as much information as possible beforehand, by requesting photographs or by having a third party take an independent look at the property. In addition, try to line up as many potential properties as possible from competing brokers.

Maria Luisa Estate Park house
Phase 7 of Maria Luisa Estate Park
Ayala Heights in Cebu
Sunny Hills in Talamban, Cebu
Santo Nino Village in Banilad, Cebu, Philippines

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