Foreclosed Vacant Lot

Among the different kinds of real estate properties, vacant lots are unique. This is simply because they don’t have structures or buildings for you to deal with. Most of the time, vacant lots used to be occupied by houses or office spaces that got demolished or were left unattended. There are also plenty of vacant lots that have been repossessed by lenders and banks. Of course, there are also vacant lots that are intentionally left empty. For example, there are subdivisions and other developed land that keep a handful of vacant lots to give the buyer more freedom to design buildings.

Vacant lots, especially foreclosed or repossessed vacant lots, are considered unproductive assets. Moreover, there are locations where vacant lots can be exploited like being used as a dumping ground for trash. In turn, this can lower the property value in the area. That’s why Robinsons Bank and other sellers of vacant lots are always looking for parties who want to lease or buy these real estate properties.

There are two different ways to acquire vacant lots in the Philippines: leasing and buying.

Leasing is similar to long-term renting that usually lasts for 5 years or longer. You’re not going to own the lot but you are free to use it for any lawful purpose for the duration of the lease contract. The contract will contain provisions the covers your responsibilities as the lessee (you may also be called a “tenant”) like the payment of taxes and insurance.

Buyers who lease vacant lots typically use the space for business purposes like office buildings, parking lots, and commercial establishments like restaurants. However, in leased lots, any improvements you’ve made to it will belong to the owner of the lot when the lease period is over.

Meanwhile, buying a vacant lot is simply owning a lot in exchange of money. After you’ve paid the agreed upon price, the lot is already yours and you can begin using it as you please. Most of the time, people who buy vacant lots plan to use it to build their homes. Buying an empty lot as opposed to a house and lot offers more flexibility, since you aren’t confined to a pre-existing design and architecture. You also don’t have to demolish an existing structure if you want to start from scratch.

As mentioned earlier, there are some subdivisions and villages that have vacant lots available for purchase. Acquiring a vacant lot within communities means that you have to construct a residential building. If you want to buy a vacant lot for business use, it’s best to search outside of these subdivisions or villages. However, you’re usually free to build apartment units for rent. Of course, you have to clear this up with the management of the subdivision or village.

Finding vacant lots in the Philippines that you can lease or buy has been made easier, thanks to the internet. Banks like Robinsons Bank have a list of repossessed and foreclosed properties, including vacant lots on their websites. If you’re interested, you may contact the bank for inquiries or visit a branch to do these in person. You may also check the websites of lending companies, real estate groups, and land developers for listings of vacant lots in the Philippines or selected provinces and cities.

You can also acquire repossessed vacant lots and other foreclosed properties from government agencies like the Home Development Mutual Fund (HDMF) or PAG-IBIG, Social Security System or SSS, and even the Land Bank of the Philippines. They usually hold auctions for various kinds of repossessed or foreclosed real estate properties.

Other places you can check for listings include real estate websites, which collect and collate information from various sources. You can also go around the areas where you want to buy a vacant lot, although this may be a more time-consuming method than simply searching online before going on-site.

Choosing to lease or buy a vacant lot depends on whether you want to build a commercial/business or a residential structure. No matter the purpose you have in mind for the vacant lot, the things you have to keep in mind remain the same. Here are just a few key considerations for leasing or buying a vacant lot, so you can make the most out of your hard-earned money.

• Location.This is one of the most important factors when choosing a vacant lot. You don’t want to buy a property in a place where it easily floods when it rains or one that sits near a fault line. Being near schools, hospitals, malls, and the like are more likely the better choice in location. This is especially true if you’re aiming to put up a commercial or business establishment. It simply goes against good sense to be too far from your clients, employees, and tenants. If you choose a less-than-ideal location, far from major roads and with limited transport options, you might end up losing money.

  An exception to choosing an out of the way location is when there are on-going developments in the area. If this is the case, the value of the property is more or less guaranteed to increase. Just remember that you may end up waiting for a while before these developments are finally completed. For vacant lots intended for commercial or business purposes, this means you’ll have to wait longer to see some ROI. For vacant lots intended for residential purposes, note that you may not have neighbors for a long time.

• Zoning and Surveying.Sometimes, repossessed vacant lots being sold may have zoning issues and other concerns. This means that you may not be able to build within your preferred specifications or may not even be allowed to build at all. Make sure to check the zoning of the property before you commit to buy. In relation to this, don’t skip a land survey. This will help you determine the lot’s boundaries and right of way, as well as find out if there are any potential restrictions on the property.
• Condition of the lot.Vacant lots can sometimes be overgrown with weeds and plants which you’ll need to clear before you can start building. If it used to be the location of a house or an office, you might also be left with runias of a demolished building. There may also be underground pipework that might get damaged when you dig for foundations. These could be considered minor inconveniences that you can work around. Still, you must also factor the effort you need to exert and the money you need to spend before you’re able to actually start building.
• Legal issues.The vacant lot you’re looking to purchase may be at an ideal location and meet your budget but there could be informal settlers occupying it. It’s also possible that the lot may have pending legal cases with regards to land use, property boundaries, and debts. The latter is common, almost expected, with repossessed vacant lots and other foreclosed properties.

  These kinds of details are often included with the listings. Make sure you’re prepared to deal with these matters if you’re persistent on purchasing the lot. Even if there’s nothing indicated, it’s still a good idea to try and find out if there are any legal entanglements and other issues. Ask assistance from a broker if you must. This way, you won’t get blindsided.

• Money.Note that buying a vacant lot as opposed to a house and lot may cost you more, since you’ll also shoulder full construction instead of just repairs. Moreover, you may be asked to pay a higher down payment for a vacant lot than for a house and lot or other real estate properties. Make sure to confirm everything with the seller or with your broker so you can prepare enough ready cash.

Leasing or buying repossessed vacant lots and other foreclosed properties can be summarized into three steps.

1. Find the property you want to buy and contact the seller to make an agreement.
2. Prepare all necessary documents and pay all fees and taxes.
3. Pay the full amount or agree upon the payment terms with the seller.

Of the three, the second one requires the most effort. You’ll need all documents sorted out in order to proceed, including the transfer certificate title or TCT, deed of absolute sale or DOAS, and other documents. You also have to pay transfer taxes and other applicable fees. Note that in the Philippines, foreigners cannot own land but can own condo and apartment units. The most viable option here is to lease the land, which can last up to 50 years and is renewable for another 25.

It’s not required for you to work with a broker, but it can make the process much smoother. They’ll help you every step of the way, especially with acquiring the legal requirements that might take up much of your time. In addition, they’ll be able to explain to you any legal jargon in much simpler terms.

When it comes to acquiring vacant lots and other foreclosed properties in the Philippines, Robinsons Bank is your reliable partner. RBank has a wide selection of real estate properties, along with filters like type, lot area, location, and selling price to help with an easier search.

Get in touch with Robinsons Bank today. Visit our Customer Care page and send your inquiries via email at C3@robinsonsbank.com.ph, or call 8637-CARE (2273) or 1-800-10-637-CARE (2273).