Today’s news in Philstar.com states that “Banks tighten real estate loan norms” by Kathleen A. Martin. She wrote: “Local banks implemented stricter credit standards on commercial real estate loans in the fourth quarter last year, according to a Bangko Sentral ng Pilipinas survey”.
“The net tightening of overall credit standards for commercial real estate loans was attributed by respondent banks to stricter oversight of banks’ real estate exposure along with banks’ reduced tolerance for risk. In particular, respondent banks reported wider loan margins, reduced credit line sizes, stricter collateral requirements and loan covenants, increased use of interest rate floors, and lower loan-to-value ratios for commercial real estate loans,” the BSP said.
The new reporting system will cover loans to developers of socialized and low-cost housing, and to individuals, and credit supported by non-risk collaterals or Home Guarantee Corp. guarantee.
Banks were also mandatory to report investments in debt and equity securities financing real estate activities.
As what I have forecasted two years ago in my blog, “Gong Hey Fat Choy! Gong Xi Fa Cai! Kiong Hee Huat Tsai!– A Developer in Greenhills claims to be building the tallest, best, most luxurious condo in the “Belly of the Dragon”; well, it’s sad to say but –that poor Dragon will end up with ‘indigestion’.” Where “indigestion” means unsold. Cuervo said last January 22, 2012, two years ago.
Banks are realizing the obvious oversupply of condominiums priced between P20-60 Million mostly located at Central Business Districts. Because of this, banks are weary by tight competition, pricing wars, and the noted shift from condominium units for sale to rent or rent-to-own.
That’s why Real Estate Brokers are facing this new year with more difficult and challenging times. The practice of Real Estate Brokerage has become very competitive. To survive this situation, a Real Estate Broker must be able to maintain one’s momentum and gain a necessary financial and economic rewards in the practice of their profession.
My advice for my fellow practitioners is that we need to sharpen our areas of competence, specialization, expertise, location, among others. It will be advantageous to come up with contingency plans so us to supplement other means of income by advancing in education, skill development, training, and knowledge. The objective is to build once reputation, prestige as an outstanding real estate professional and build a “brand name identity”.
The number of Real Estate Brokers is continuously increasing, if I’m not mistaken, they are now more than 20,000. And the level of competition is also increasing, with younger, better educated, well trained, equipped with skillful computer literacy and master of how to use gadgets and other tools in their performance as real estate brokers. It is my observation that these young real estate brokers can do multi-tasking and are very good with networking, and have a inner drive, multivated and somehow more aggressive than the “mature senior citizen real estate brokers”. The advantage of new graduates is their expertise in using technologies. These new generation of real estate brokers capitalize on using the Social media, Digital marketing and other innovations and creativity.
There are some tips that I wish to share to all real estate brokers whether they be young, mature, or “senior citizens” like myself. I’m a firm believer that for a real estate broker a mature experienced professional still has a better advantage than a young aggressive one, particularly in areas of specialization, expertise, competence and prestige that can only be achieved after several decades of building up a good reputation and “brand name”.
Indispensable for a successful real estate broker is his integrity, honesty, and the practice of good moral behavior and ethical standards. In building up a prestigious brand name, it is important, that a real estate broker must understand the long-term implications of one’s character, personality, and behavior.
Harmonious and good relationships will necessarily bring with it, and attract valuable clients. Networking with a few equally reputable real estate brokers is very important in the practice of our profession. Our cordial, respectful, and courteous dealing with co-brokers must always be on a professional level, agreements in writing and follow that the standards set by our real estate associations or institutions.
In areas where we should advance in continuous education is in a better knowledge on new taxation rules and regulations that seem to pop-up every now and then. A competent real estate broker must learn to use mathematics of investments, finance, and should also know the “ins and outs” of how to deal with mortgages, estates, the register of deeds, tax assessors, and documentation.
Moreover, the real estate broker must be familiar with macro and micro economic trends, understand the banking system, and how to acquire PAG-IBIG loans. The idea is a real estate broker is “a jack of all trades” because of the demands of clients, both sellers or buyers. Both sectors will always try to get the best deal possible, bargains, value for money and will require the help of a real estate broker’s guidance.
It is advisable to network with professional appraisers, and ask for help when a professional real estate appraisal report is required.
To be an attractive real estate broker, one must develop a professional personality and build a reputable identity. A “professional personality” is one who develops and forms personal character by the practice of human virtues, good habits that attract clients. The formation of a successful real estate broker requires time in daily struggle to be better.
A practical suggestion is to improve in one’s good in oral and written english. Excellent communication skills is an advantage in the practice of the real estate profession. This is because in real estate we normally deal with persons, family and corporations who are financially well-of, educated, and could be demanding making us go an “extra mile” in our services.
It is also true that in our work we will encounter all sorts of characters, some abrasive, and difficult to deal with. There are different types of people, from different places, upbringing, values and diverse cultural background.
A “must-know skill” is good salesmanship. Because the Filipino style of buying and selling requires a personal touch. Some kind of “Romance” which is warm & friendly. Filipinos are known for being hospitable, cheerful, and caring, but also very sensitive. That is why having a good relationship with our client is a must.
Due to serious concerns about weather conditions, a real estate broker must learn basic geohazards sciences, how the environment affects the Physical aspects of land.
When it comes to raw lands and rural properties, I always advice to network with Geodetic Engineers or Surveyors.
Real estate brokers must know all aspects of the land and property laws like Land Reform, Condominiums, Real Estate Investment Trust (REIT), Coops, Family Code, Etc.
To conclude, a Filipino Real Estate Brokers can Ride the 2014 “Wooden Horse” and win prosperity, success and prestige for 2014 if they focus on a particular location, neighborhood, city or barangay, where they have an advantage.
In this year of a “Mary-go-round rocking horse”, it will be wise to focus and choose a specific type of property be it in the rural agricultural area, residential sector, industrial use, commercial properties, or rental and income producing real estate. This way, the real estate broker will need to concentrate and eventually develop an expertise in the chosen field. But of course, always try to be innovative and creative so us to become more efficient, effective, and successful broker at par with international standards and ready to meet the competition of foreign “giant” competitors who are already here practicing the real estate services “illegally” but somehow are getting away with it because of the weak implementation of the real estate service act 9646 and the misunderstanding of “corporate practice” of real estate, resprocity clause, with excuse that we are gearing towards the ASEAN Integration and therefore must be “open” and “tolerant” to these foreigners, for they too are taking a enjoyable ride in their wooden “Trojan Horse”.
Cuervopropertyadvisory: Gong Hey Fat Choy! Gong Xi Fa Cai! Kiong Hee Huat Tsai!