This “awakening” is the good thing which was brought about by this law. Somehow, the government was able to catch their attention and show that they really mean business this time. I still remember our lecturer telling us that we are a lucky batch because starting “next year,” real-estate brokerage will already be a profession and aspirants to be practitioners will already have to take a four-year course! This was 20 years ago! And every year they say the same thing over and over again just to get enrollees to their seminars and reviews.
However, people were still caught by surprise when this act was signed into law on June 29, 2009. The surprise turned into fear when they learned about the limiting provisions of this law. This fear turned into anger when they realized that they were practically “cornered” by this law, seemingly helpless at present since there were no provisions for a smooth transition. These people I am referring to are the in-house sales people of most of the bigger developers. They have the impression that they are being forced into a situation where they have no choice but to turn to the few licensed brokers who were fortunate enough to renew their licenses just before the deadline last June.
Most developers feel that this law, with all its good intentions, only favors the existing active licensed real-estate brokers now but have neglected the existence and importance of the in-house sales organizations who are actually the ones who have played a major role in bringing Philippine real estate to where it is right now by bringing in the dollars through international sales and also promoting pre-selling real-estate investment locally as I have mentioned in Part 1 of this article.
The main reason for this is that there is nobody representing the sector of the in-house sales people during deliberations in real-estate councils like RESCOP, in the Congress and in the Senate during its public hearings. Presently, there are no existing associations or organizations which can act as the voice of these highly productive but unfortunately unrecognized workers. We consider the OFWs as the new heroes of the economy for being dollar earners, but we fail to recognize these agents who have significantly helped to convince these OFWs to invest their dollars in Philippine properties.
I have had several discussions already with some of the heads of the sales departments of the major developers and they have realized the need to have a formally organized body not only for proper representation for the practitioners categorized under the RESA law as the Real Estate Sales Person but also to eventually professionalize this level of practitioners by setting higher standards and observing their own Code of Ethics.
Last October 5, we signed the Memorandum of Agreement for the formation of FRESA or the Federation of Real Estate Associations. Parties to this include PAREB, REBAP, IPREA, PARA, IPREC, PARCS, CREBA & NREA. These are all associations of real-estate brokers, appraisers and consultants. All these practitioners are actually the direct beneficiaries of this law. Ironically, the sector of the Real Estate Sales Person which is duly recognized in the RESA law as one of the five classes of real-estate practitioners, and the one which is most adversely affected by this law, especially the existing in-house agents, have no official representative to present and defend their official position.
The good news is that something is being done to have a smoother transition from the current practice to the new RESA law. DTI and PRC are already close to finalizing a MOA to achieve this objective. We have submitted additional recommendations which we can just hope will be considered. Concerned readers of this column may also send their comments or suggestions through e-mail so we can forward them to the agencies involved. You may also send an e-mail expressing your interest to support the move to form an association of registered (once available) in-house sales persons to act as the voice of the agents.
Unless DTI and PRC finally sign the MOA for a smoother transition to the RA 9646, people will remain restless about RESA. I promise to keep you updated on this issue here in my column next month.

(Editor’s note: the author is currently the National President of the National Real Estate Association. For comments and inquiries, you can send your e-mail to andymanalac85@yahoo.com)

Recently, on June 29 to be exact, a new level of protection for our beloved real- estate investors has been signed into law by President Arroyo, which took effect on July 31. This law intends to protect the buyers, even before they get involved in a real-estate transaction, by assuring them that they are only dealing with competent, professional, duly licensed and registered practitioners whose standards of practice and service shall be globally competitive and who are subject to stiff penalties for certain violations and malpractice. This is Republic Act 9646, or now more commonly referred to as the Real Estate Service Act (RESA).

This new ruling basically requires all real-estate service practitioners to be licensed and registered with the Professional Regulatory Board of Real Estate Service ,which is under the supervision and administrative control of the Professional Regulatory Commission. Prior to the effectivity of this law, these licenses were secured only from the office of the Department of Trade and Industry (DTI). Except for the real-estate salesperson, all levels, meaning the broker, appraiser, consultant and assessor are required to undergo examinations to be given by the board as a prerequisite to licensure and registration. However, a real-estate salesperson is still required to secure a license and can only work under a licensed broker who will have to be a signatory in all the transactions of the salesperson.

Another objective is also to elevate the standards for the practitioners by setting higher requirements for the applicants, especially for the level of the real-estate brokers and salespersons. Until the availability of a Bachelor’s Course on real estate, which will be a prerequisite to get a brokers license, applicants should have completed a four-year college degree. In the case of the salesperson, they should have taken at least two years in college. In this broker-salesperson arrangement, a broker can only accredit a maximum of 20 salespersons. In divisions or departments in partnerships and corporations engaged in marketing or selling any real-estate projects, the heads must be full-time registered and licensed real-estate brokers.

While these sounds all too good for the buyers, it will actually benefit the real -estate brokers who have existing licenses the most. Moreover, if we take a closer look at the implications it will have on the existing structures of real-estate sales and marketing organizations, this law might require major movements which will definitely adversely affect their current operations. This is especially true for companies involved in marketing low-cost and socialized-housing projects, but it does not mean that corporations selling high-end projects are exempted from it. At present, maybe more than 95 percent of the in-house agents of real-estate companies are not licensed salespeople. The same percentage for the department or division heads who are not licensed brokers although most of these people have worked for their respective companies as productive sellers for 5, 10, 15 or more years. In the existing structures of these sales organizations, there can be one head for a division with more than a hundred sales agents with middle managers in the layers. Will all managerial levels be required to be headed by licensed brokers when the law only requires the one directly supervising the salesperson to be a licensed broker? That is just the tip of the iceberg. Many of the sales heads, especially in low-cost housing sales organizations who have worked productively for years in their respective companies, may not even qualify to apply for their broker’s licenses since most of them do not have a four-year college degree although they know the industry extremely well. Will they have to be demoted to mere “coordinators” or “referrers” as some advocates of this law suggest?

It really seems that the in-house sales organizations were not considered in the deliberation of this law, when we should actually give credit to these agents who were responsible for bringing the Philippine real estate to where it is right now and also for bringing in the very useful dollars from abroad through their efforts to sell to the international market.

More of its impact willbe discussed on the second part of this article. Incidentally, this topic will be discussed more lengthily by no less than the chairman of the PRC, Nicolas Lapeña, in the 14th NREA-DCC National Convention on September 24 and 25 at the Makati Sports Club. You may contact the NREA office at 913-4463 to reserve seats.

It is these times of uncertainty that often provide the opportunities for those who have visions…or at least see things differently. Come to think of it, the stock market would not even exist if everybody wins and nobody loses. It is the way they look at things. It is their bet on the outcome of their forecasts…or guesses. In one of the books I’ve read, there was an experiment done on Wall Street comparing the success of the tips on the stocks taken based on the random hits on a dartboard versus the forecasts of expert analysts, and they almost have the same success rate, with the dartboard scoring a little higher. With the current downward trend now, some people may just be waiting for it to really dive to its lowest level and then start coming in again. Some win, some lose, but they both think they are astute.

Well the good news is that we are sure now that there is money around but it is not being traded in the stock market. Players have massively pulled out from the game of portfolio investment. Just like the children’s game of passing the ball while the music is playing then they stop passing when the music stops, the music in the stock market just stopped. Someone, somewhere is holding on to the cash. Someone, somewhere is thinking about where to put his cash, thinking of other alternative investments, thinking of other business ventures, or thinking of how he will take his sweet time to enjoy his money while watching the rest of the world in chaos.

For some of the well connected and well informed real-estate practitioners, they know who and where these people are, and they always have some great opportunities to offer. The more experienced investors know that this is a very good time to buy and they know exactly what and where to buy. However, for those who are new in the game, my advice is to get the professional services of licensed and well-informed real-estate professionals and not just be carried away with impressive ads. Like what I always preach, in these modern times, it is no longer location, location, location to consider in real estate, but Location, Information (advanced is better) and Timing!

This is the reason why most of the broker’s organizations like REBAP, PAREB, NAR, developers’ associations like CREBA, SHDA, OSHDP & NREA conduct regular business meetings where they discuss not only the hottest issues but the best opportunities for their clients. While these organizations recognize the realities of the issues at hand, they try to look at the positive angles of the situation where more favorable outcomes can be expected.

In the case of NREA, or the National Real Estate Association, its membership includes developers, real-estate brokers, appraisers, real-estate consultants, marketing experts, trainors, real-estate lawyers, real-estate tax consultants, architects, engineers, contractors, interior designers, suppliers and manufacturers of construction materials, etc. This provides a broader discussion during meetings with each of the allied industries and services properly represented. The dynamic exchange of relevant information also helps the members in their planning.

From the experience we had from the past two boom-and-bust cycles, we have learned to look at things positively. Let us be clear that it is not the intention of this writer to convince people to stay positive and look for the silver lining, but then again we all have a choice: you can either sulk, worry, scrimp and live in fear of what is going to happen next, or look at it as nature’s way of correcting things to be able to distribute the opportunities to more people…including you.

Yes, after the property crash in the US and the closure of some of the biggest financial institutions in the US, some “experts” have started to predict that we should prepare for possible gloomy days ahead. Well, being ready for the rainy days is something that we should really practice, but expecting bad times to come is another story. Come to think of it, the subprime issue started already middle of last year and if you will just look around, the Philippine real estate is not just surviving; it is very much alive and active. Even when the prices of construction materials started soaring since the second quarter of this year, several huge projects of different developers have been launched. And how is the take-up? New phases are scheduled to be launched again. Those in the know are aware that even the most ridiculously expensive projects are being sold (take note, pre-sold!) in record time. By the way, did I mention that the payment terms for these pre-sold projects were on either cash or deferred cash basis and not high-financing just like in the US? Actually, the difficulty of access to financing in the Philippines is one of the main reasons why it is very unlikely that a crash similar to the US could happen here. I have been telling this to my clients since one of my first mentors, a Singaporean investor, told me these 19 years ago.

So, is there still a market? Why? Have the people stopped dreaming? Have the population stopped growing? Ask our developers about their buyers’ profile and you will be happy to find out that most are either end-users or first-time investors who intend to just rent it out for the meantime but use it themselves in the future. We still have very few people who can afford to just speculate. While it may be true that some areas may already seem to have an oversupply of condominium units, but then real estate does not only refer to condominiums.

Most developers now know not only what projects to build, where to build, what concepts will sell and what price can be absorbed but also and most importantly where they can sell it. The market now is no longer limited to the Philippines. The world is our market and we now have the ability and the capacity to reach out to these markets either by sending our sales ambassadors to the different countries and doing roadshows, advertising in international media or doing transactions online. We can simply follow the money trail and sell there. Incidentally, you might be interested to know that the biggest OFW market around the world came from the Central Luzon area.

A very big market now and will always be there is in affordable housing. For first-time home buyers, they are not only buying a house, they are fulfilling a dream. There are a lot of incentives now from the government for developers catering to this particular market as there are also several special programs prepared for the buyers. These were actually discussed during the national real-estate convention of NREA (National Real Estate Association) and HUDCC ( Housing and Urban Development Coordinating Council) held on September 24 and 25, 2008.

So, are we seeing a sustained boom? Or are we expecting the bubble to burst soon? I say good times ahead for developers who know how to position well and market their projects properly. I may be wrong. But I’d rather be wrong than be right to predict that it will be a bust.