Investing in properties anywhere is a massive undertaking. The costs and the steps needed are all a huge load to bear and many people are always looking for ways to make it easier and cheaper.
One thing that people have done before to overcome some of the challenges that come from investing in real estate is by investing in some of Pag-IBIG’s acquired assets. Although you can do it, not many people have ever considered buying a foreclosed house from Pag-IBIG to turn it into an investment because they don’t know whether it’s a good investment.
In this article, we’ll answer the question of whether or not you should consider investing in a Pag-IBIG foreclosed house and lot.
What is a Pag-IBIG Foreclosed Property?
A Pag-IBIG foreclosed property is similar to a bank foreclosed property, except it’s Pag-IBIG and not the bank that acquires the property. The reason why Pag-IBIG gets the property is that the original owner likely failed to pay off the monthly amortization of the housing loan that they got from Pag-IBIG.
Of course, the Pag-IBIG Fund still gives the previous owners a chance to get back the property and pay it off. Even the tenants get a chance to buy back the property. If they can’t, that’s when new buyers get the chance to buy them.
At first, the property goes through a bidding process (that you can attend if you want). However, if the property fails to be sold during the auction, it will be put up for a negotiated sale afterward.
What are the Pros and Cons of Buying a Pag-IBIG Foreclosed House and Lot?
Now that you know more about what Pag-IBIG acquired assets are, you might be considering getting one to invest in for yourself. However, it pays to do some research and identify the pros and cons are of buying such property before you ever purchase a property from Pag-IBIG.
Advantages of Purchasing a PAG-IBIG House for Sale
Let’s first cover the advantages of buying a house from Pag-IBIG would usually be.
1. Properties For Sale are Available for a Lower-Than-Their-Usual Market Value Price
One of the main reasons why people are buying property to invest in by going through the properties that Pag-IBIG acquired is because of the price.
It can be surprising just how cheap and affordable you can get a property from the foreclosed houses that Pag-IBIG has. Of course, some of them come with their issues, but if you’re buying property as a business investment, you can account for the costs and easily turn a huge profit margin because of how affordable the property was in the first place.
Another factor that can lower the costs of the property even more than its initial price would be the payment option that you choose to purchase the property.
If you pay with cash, you’ll get a considerable discount. If you avail of the 1-year installment, you’re getting a moderate discount. The lowest discount that you can get is if you pay with a housing loan. Thus, you’re reducing the costs of the property even more.
2. It’s a Great Alternative to Buying Property Located in a Prime Location
Location is a critical factor that affects the overall profitability and market value of your property investment. With that said, buying property from a prime location is a challenging aspect because you can expect that the options are limited and usually expensive. However, a great alternative to that would be by buying Pag-IBIG acquired properties.
You can narrow down your choices of properties to look through based on the city or area that you want them to be in so you can find a fairly affordable property that many people are likely looking over. It’s an excellent alternative that will give you huge returns because your property is in a strategic location.
Disadvantages of a PAGIBIG Foreclosed House and Lot
To better prepare your expectations, it’s good to know what are the disadvantages of buying a house from here.
1. Potential Conflict with Previous Homeowners or Occupants
One difference between bank foreclosed and Pag-IBIG acquired foreclosed homes is that banks would assist in the evacuation of the occupants of a foreclosed home. Pag-IBIG, however, does not, which is why it would usually fall under the responsibility of the buyer.
This instance can be really stressful, costly, and time-consuming since many people might not want to leave their foreclosed homes. Although this can happen, you can easily prevent this by doing a site visit before you even consider bidding or purchasing the house to see if there are still occupants living there.
By doing that step, you can skip all of the headaches and avoid any unnecessary tribulations when investing in a foreclosed home.
2. House Has No Improvements or Maintenance
Another disadvantage of buying a foreclosed home from Pag-IBIG is the fact that the property has not been maintained or fixed the entire time it was in the inventory of Pag-IBIG. Therefore, the properties that are much older would likely be at a less than appealing state, depending on the state they were left before they went into foreclosure.
Therefore, if you want to make sure that the house you’re investing in is at a state of decay that is workable for you, it’s always a good idea to look at the age of the property in foreclosure as well as go to the sight physically to see for yourself what work it needs.
Should You Consider Investing in a Pag-IBIG Foreclosed House and Lot?
As you can see from the pros and cons of investing in the acquired properties of Pag-IBIG, they all come with both advantages and disadvantages that can sway or dissuade you from investing in them.
However, just as with any type of property investment, or investment in general, it all comes down to knowledge and approach.
If you plan on investing in foreclosed homes to make the most out of its affordability, then you have to have a clear plan regarding what you want to do with it. You should then know whether a foreclosed house is a worthwhile investment for your property investment goals that way.
After all, plenty of people have had great successes converting their foreclosed homes into a profitable venture. Thus, make sure that you acquaint yourself well with what comes with buying a foreclosed home from Pag-IBIG before investing in them. That way, you give yourself the highest chances of success at gaining a profit from them.
What to Do Before You Buy a PAGIBIG House for Sale
Since many people may be unfamiliar with the process of buying a house from Pag-IBIG’s inventory, it’s a good idea to know the preparations you need before taking it on.
Here are a few things that you need to do first before buying a house from Pag-IBIG.
Identify the Reason Behind the Foreclosure First
One step that people need to take before buying any foreclosed house no matter where it came from is to identify why the property was foreclosed in the first place.
Knowing the reason why can help give you an idea of potential issues that you’re going to encounter upon viewing the property. It will also let you know whether you are equipped to handle whatever these issues may be.
Of course, this information won’t come easy so make sure to do thorough research first to unearth the real reason why it was foreclosed. Don’t forget to ask the neighbors as they can help paint a better picture.
Check If the Property Has an Unsettled Pending Balance
Another thing you have to double-check is whether the property has any unsettled payments that would transfer to you if you do end up buying the property. You don’t want to account for a specific budget in mind only for unexpected fees and expenses to come your way, lessening and lowering the possible profit you can gain from your investment.
That’s why you should check to make sure whether the property has any unsettled balances that you have to pay out of your pocket. That way, you can have a clear idea of what the true expenses are going to be and how much you may get based on your initial investment.
Check the Property’s Location
The location of a property is critical in determining what the potential market value of the investment will be. There’s no point in buying a foreclosed property for a dirt cheap price if there’s no high demand for real estate in the location of the property. That’s why you should ensure that the location of the property is marketable and profitable for you.
The convenience of travel is another factor that can mark up the possible value of your property investment, which is another reason why location is valuable.
See If the Property’s Papers and Titles are In Order
Usually, if a property is in the hands of Pag-IBIG, you should have a pretty good guarantee that the paperwork and the property title will be in order and are good to go upon transfer of ownership. However, it doesn’t hurt to double check.
The last thing you want to stumble into is to find out that the paperwork that you got aren’t legitimate so your investments end up being a loss for you.
Set a Budget
Even though a Pag-IBIG foreclosed house and lot is already pretty affordable, it helps to set a budget in mind so that you don’t go overboard and get too excited with finding the many other foreclosed homes available.
Having a clear plan and goal for your investment property really helps you identify what your budget should be. Make sure to account for costs of repair, renovations, and other fees upon ownership of the property as well.
View the Property Itself Directly
Although photos of the property are a nice preview of it, there’s no replacing a tour of the place directly and physically. That’s where you really see the potential of the place, as well as what possible issues the listings don’t show you.
It will also let you know better whether a property is worth purchasing or not because this is a chance to ask around about the state of the property. It’s also a chance to see if there are occupants living in the foreclosed property.
Ask the Opinions of a Real Estate Expert
You should ask the opinion of a real estate professional before purchasing a Pag-IBIG foreclosed house and lot. A real estate professional will be able to tell you if the house is worth buying or not.
Pag-IBIG foreclosed houses are usually in bad shape, so it’s important that you know what you’re getting into before purchasing one. It’s best to consult with a real estate professional who can give you more information about the property and its features and its potential profitability.
Where to Find PAGIBIG Foreclosed House and Lot for Sale?
Now that you know what to prepare, it’s time to find out where to buy these houses. Well, you have two options: the Pag-IBIG website or through a Pag-IBIG regional office near you.
If you go to the latter, you can get a list of properties within your area that are foreclosed and that you can buy. On the other hand, you can go to the Pag-IBIG Fund website to see what their acquired assets are online if you don’t want to have to travel to find them.
How to Bid For a Pag-IBIG Foreclosed House and Lot Through a Public Auction?
There are two ways to buy a home from Pag-IBIG and one of them is by bidding through a public auction. Here are the steps you take to buy through bidding.
Prepare the Requirements
You can go to the Pag-IBIG Fund website to find the assets that are up for bidding as well as the schedule of public auctions.
Once you find a schedule and property that works for you, you have to prepare the required documentations: the bidder’s fund, and two accomplished forms of an Offer to Bid form. If you’re not going to be there yourself, then you will need a Special Power of Attorney and Acknowledgement Note as well.
Check Whether the Property You Want to Bid On is Still Up for Bidding
Sometimes, there are mistakes in the list of properties up for bidding, so make sure to check on the day of the auction whether your desired property is on there. After all, you wouldn’t want to wait a long time only for you not to find the property you wanted in the first place.
Go to the Actual Bidding
Now it’s time to go to the actual bidding, present your documentation and requirements, and bid on your property.
If you don’t win the bidding, you’ll get back your bidder’s bond as well as an acknowledgement receipt. However, if you do win, the bidder’s bond will serve as your downpayment on the property.
How to Purchase a PAGIBIG House for Sale
Another way to buy a foreclosed house and lot from Pag-IBIG is through a negotiated sale after it fails in the auction. In this case, the steps you need to take are the following:
- Reserve the property you want to buy. Do so by preparing a proof of income as well as one valid ID.
- Fill out the Offer to Purchase form as well as the Reservation Form.
- Choose your mode of payment. Pay the non-refundable Reservation Fee.
- You can choose to pay with Cash, One-Year Installment, or through a Housing Loan.
- If paying through a house loan, you have to submit the complete documents within 30 days of paying the reservation fee. Aside from that, you have to pay the Processing Fee and Documentary Stamp Tax. After that, you should receive a Notice of Approval of Loan and you have to pay the one-year advance premiums within 30 days.
- Execute a notarized Deed of Sale for the property as well as your other mortgage documents if any. Submit.
You should then be on your way to buying a negotiated sale foreclosed house from Pag-IBIG this way.
Buying a foreclosed property or acquired asset from Pag-IBIG shouldn’t be a closed-off venture for you if you’re investing in property.
The possibilities that you can get from buying foreclosed properties from them is endless, and if you do your strategies right, you should be able to turn a huge profit from them.
No worries if you can’t find a property from Pag-IBIG that you think is worth investing in. You can also find plenty of foreclosed house and lot for sale available in the Carousell website that is also a great choice of property investment.
Good luck with the search and may you find the right property for you!