REAL ESTATE APPRAISAL SERVICES Because much private, corporate, and public wealth lies in real estate, the

determination of its value is essential to the economic well-being of society. It is the job of the "Professional Appraiser" to determine these values by gathering, analyzing, and applying information pertinent to a property. Unquestionably, the professional opinion of the appraiser, backed by extensive training and knowledge, influences the decisions of people who own, manage, sell, purchase, invest in, and lend money on the security of real estate. And because the appraiser is trained to be an impartial third party in the lending process, this professional serves as a vital "check in the system," protecting real estate buyers from overpaying for property as well as lenders from over lending to buyers.

Realty Services is able to offer a complete appraisal service to our customers. Rodolfo D. Leonen, our Senior Partner, is a Licensed Real Estate Appraiser and Licensed Real Estate Consultant and such can provide a detailed
Asian Homes

property appraisal service for both buyer and seller. If you would like to view an example of a "Full Property Appraisal" please Please note this file is 2.13 MB in size and is a total of 15 pages in length.

The physical inspection of the real property being appraised can take from approximately fifteen minutes to several hours, depending upon the size and complexity involved. After the initial inspection of the property the appraiser spends time touring through the neighbourhood or area. The purpose of this tour is to search for comparable sales (other properties that are similar to the property being appraised) that have sold within the last six months to a year or so. When the field work is finished, the appraiser completes the report at our office. The report can consist of a short form report (typically under ten pages) to a long narrative report which can sometimes exceed a hundred pages. A short form report usually takes between three to six hours to complete. A narrative report can take weeks or sometimes even months, depending upon the complexity of the assignment. Our appraiser gets his information from a wide variety of sources, including the local Multiple Listing Service, local tax assessors records, local real estate professionals, county courthouse records, private public record data vendors, interviews with sellers and buyers, appraisal data co-operatives and his or her own personal knowledge or

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office files from previous appraisals. The quality and reliability of each piece of information is considered by the appraiser. Typically, an appraiser needs to document the condition of the property, both inside and out, from the layout and features to degree of modernization including any updates as well as the overall quality of construction. This information will help to assist the appraiser throughout the valuation and comparison process. The appraiser estimates the square meter (GLA - gross living area), by measuring the exterior of the home. Non-living areas, such as garages or covered porches, aren't included in GLA, but are accounted for and considered in value separately. Finished basements are also calculated separately from the above-ground GLA. The local market will dictate the contributory value of the finished basement, which can be influenced by governmental regulations, the degree of modernization, the quality of the finish, and other factors. The appraiser will generally consider only permanent fixtures and real property. Because many above-ground swimming pools and small sheds are not permanent structures, they typically usually aren't included in the valuation. Depending on the specific installation process and local custom, however, an above ground pool or small shed might be considered part of the real property. In our complex society, you may need and use the services of a professional real estate appraiser for a variety of reasons. Asian Homes Realty Services can provide all of the following services: Appraisals - Residential or Commercial; Counselling and Consulting; Evaluations; Expert Witness Testimony; Litigation Preparation; Feasibility Studies; Market Analysis; Market Rent & Trend Studies; Tax Assessment Review and Advice or Zoning Testimony. A certified appraisal is a formal, impartial estimate or opinion of value, usually written, of an adequately described property, as of a specific date, and supported by the presentation and analysis of relevant data. It is prepared as a result of a retainer, for reliance by identified parties, and for which the appraiser accepts responsibility. Only a certified appraiser can provide a "Certified Appraisal". A comparative market analysis or brokers price opinion is an informal estimate of market value, based on comparable sales in the neighbourhood, performed by a real estate agent or broker. You can do your own cost comparison by looking up recent sales of comparable properties in public records. These records are available at local recorder's or assessor's offices, through private companies or increasingly on the Internet.
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The most important difference between a certified appraiser and broker or real estate sales agent is their motivation. A brokers typical goal is to obtain a listing and earn a commission. Although most brokers and agents are honest some might tell you what they think you want to hear. A certified appraiser is independent and has no axe to grind. They have no ulterior motives. Their only concern is to deliver a fair, accurate objective appraisal. The appraisal process is an orderly and concise method of reaching an estimate of value. The process has six major steps which include: definition of the problem, preliminary survey and appraisal plan, data collection and analysis, application of the three approaches to value, reconciliations of value indications, final estimate of defined value. This process assists the appraiser in reaching a sound conclusion. The major phase of this process involves the application of the three approaches to value which include the Market Data Approach, the Cost Approach and Income Approach. The three approaches are reconciled and the value via most applicable approach, in the opinion of the appraiser, is selected as the final estimate of value. In most residential appraisals, particularly those of single or two family dwellings, the direct sales comparison or market approach best reflects the actions of buyers and sellers and is the most convincing and defendable approach to value. The market or direct sales comparison approach to an estimate of value is a process of comparing market data, that is, prices paid for similar properties, prices asked by owners, and offers made by prospective purchasers or tenants willing to buy or lease. Typically a comparison grid is used and adjustments are made to each of the comparable sales used for major differences between the comparable and the subject property for such items as location, gross living or building area, lot size, condition/effective age, market conditions, degree of remodelling, construction quality and significant amenities, i.e.: fireplace, Jacuzzi, in ground pool, garage, deck, patio, porch and central air conditioning etc. In the market approach, the appraiser attempts to both gauge and reflect the anticipated reaction by a typical purchaser to the subject property. A comparable sale is a property, that is similar to the subject property in most respects, is located in a similar (nearby) location, and has sold recently at arms length. The selection of comparable sales is in most residential appraisals, the single most important determining factor in establishing value. It is the appraisers responsibility to adequately research the local real estate market and determine which comparable sales best represent the value characteristics of the subject property.

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An arms length transaction is one in which both seller and purchaser act completely independently of each other and have no connection or relationship to each other. Market value or fair market value is the most probable price that a property should bring (will sell for) in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised; (3) a reasonable time is allowed for exposure to the open market; (4) payment is made in terms of cash or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. The cost approach combines an estimate of land value with an estimate of depreciated reproduction or replacement cost of the improvements. The principle of substitution is the basis of the cost approach, in that no rational person will pay more for a property than the amount for which he can obtain, by purchase of a site and construction of a building, with undue delay, a property of equal desirability and utility. The income approach is based on an estimate of net income from the operation of an income producing property and the selection of the property capitalization rate from market indications of similar properties. The principle of anticipation is the basis of the income approach and affirms that value is created by the expectation of benefits to be derived from possession, operation and/or capital gain at resale. Typically, highest & best use means the use or utilization that provides the most profitable return on investment. It is that use, selected from reasonably probable and legal alternative uses, which are found to be physically possible, appropriately supported and financially feasible to result in the highest possible land value. Summary Of Appraisal Services Provided: Land Building Plant Machinery & Equipment Furniture & Office Equipment
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Land & Water Transportation Equipment Valuation Of Intangible Assets Business Enterprise Shares of Stock Title Search Title Verification Feasibility Study Market Study Sale Acquisition Financing Dacion en Pago Merger Joint Venture Insurance Accounting Compliance with SEC Immigration Litigation (i.e. Estate Partitioning) Expropriation/ Just Compensation Swapping LEGAL SERVICES

Buying or selling a home is one of the most important decisions that a person will ever make. For many, it represents the fulfillment of everybodys dream. For most, it is the largest single financial investment of a lifetime. It is usually accompanied by a financial sacrifice at the time of purchase, as well as heavy commitment extending long into the future. Obviously, it is a decision that should be carefully planned. Whether one likes it or not, many complexities affect the title to real estate complexities that can have a profound impact on the buyer or the seller. These complexities include mortgages, deeds, taxes, zoning, coastal zone management permits, restrictions, protective covenants, future interests, attestation and recording, insurance, surveys, utilities, property descriptions, easements, access consideration, warranties (or lack of warranties), leaseholds, joint ownership and construction liens, just to name a few.

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It is very essential to regularly check the title of your property in the Philippines: To verify that the property is still registered in "Your Name" and has not been sold or transferred without your knowledge. To find out if there are any liens (voluntary or involuntary), encumbrances, mortgages or any other annotations on the title that you, the owner, may not be aware of. It is also important to pay the real property tax up to date: To avoid a lien by the government for unpaid taxes. To prevent other parties making the tax payment and claiming ownership on the basis that they are the ones paying taxes on the property. Our Title Verification services consist of: 1. Verifying the title of your property at the local Registry of Deeds where the property is located. By thoroughly examining the certified true copy of the title, we can determine if the title is in the name of the supposed owner which is free and clear of any objectionable liens and encumbrances, including those liens imposed against the property without the knowledge and consent of the owner. 2. Providing you with a certified true copy of the title, summarizing and reporting to you any conditions and annotations on the title that will be revealed by title verification. 3. Any title defects or irregularities that might require the services of a lawyer or other professionals will be highlighted in our report to you. It will be your decision whether or not to take any action. Should you wish to engage the services of a lawyer, we have preferred law firms that we can recommend to you. Our Fees: US $ 250.00 per TCT (Transfer Certificate of Title) within Metro Manila and $450 outside Metro Manila. For multiple TCTs, add US $ 20.00 per additional TCT (applicable only if in the same name, in the same Registry office, verified at the same time). Title Verification service, Asian Homes Realty Services is pleased to be able to provide a comprehensive range of property related legal services to our customers, which we know will assist you in smoothing the process of both buying or selling a property.
In addition to our

The property related legal services we are able to assist you with are as below. Asian Homes Realty Services hourly rate being $40.00 per hour plus travelling expenses.
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FOREIGN OWNERSHIP

For all our foreign owners who are looking to buy property in the beautiful Philippines, we have listed below additional information on "Philippine Real Estate Ownership Laws", which we are sure you will find very helpful. The general rule is that only Filipino citizens and corporations or partnerships, at least 60% Philippine owned are entitled to acquire land in the Philippines. As an exception to this rule, an alien acquisition of Philippine real estate is allowed in the following cases. Acquisition before the 1935 constitution. Acquisition thru hereditary succession if the foreign acquire is a legal heir. Purchase of not more than 40% interest as a whole in a condominium project. Purchase by a former natural born Filipino citizen subject to the limitations prescribed by law. Filipinos who are married to aliens retain their Filipino citizenship, unless by their act or omission they are deemed to have renounced their Filipino citizenship.

Dual citizenship is now newly available for the following. Dual citizenship means having two citizenships and passports from two different countries. 1) Former Filipino citizens born in the Philippines, but that have immigrated to another country and obtained citizenship of that country. 2) A foreign spouse married to a Filipino citizen. Dual citizenship allows the
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citizenship holder full rights of possession of Philippine real property. Currently this is a new law and it is still unclear as of the procedures involved to implement it. Check back for updates.

If holding title as an individual, a typical situation would be that a foreigner married to a Filipino citizen would hold title in the Filipino spouse's name. The foreign spouse's name cannot be on the Title but can be on the contract to buy the property. In the event of death of the Filipino spouse, the foreign spouse is allowed a reasonable amount of time to dispose of the property and collect the proceeds or the property will pass to any Filipino heirs and or relatives.

Foreign nationals and or corporations may 100% own a Philippine condominium or town home. For private land, residential home with land lot and or commercial building with land lot ownership, the foreign national and/or corporation forms a Philippine Corporation to take ownership of the property. A Philippine Corporation by law will be a maximum of 40% foreign owned, and a minimum of 60% Filipino owned with a minimum of five incorporators. The corporation by law shall have a main bank account tied to it upon incorporation. A foreign national may be the sole person on the Philippine corporation bank account. Thus allowing the foreign national total control over the funds derived and paid out from the Philippine Corporation and from the income or sale of the asset or real estate property.

"Balikbayan", who is a former natural born Filipino citizen, and now is a citizen of another country is entitled to own for residential purpose 1,000 square meters of residential land, and one hectare of agricultural or farm land. For business purpose 5,000 square meters of urban land or three hectares of rural land.
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A foreign national and or corporation may enter into a lease agreement with Filipino landowners for an initial period of up to 50 years, and renewable for another 25 years. Or lease the property in your Philippine Corporation name for an unlimited period.

Buyer's transaction or closing costs include the following. Documentary Stamp Tax - P5.00 per P1,000 of contract price, or zonal value or fair market value, which ever is higher. Transfer Tax - P5.00 per P1,000 of contract price, or zonal value or fair market value, which ever is higher. Registration Fee - P1.50 per P1,000 of contract price, or zonal value or fair market value, which ever is higher. The seller is responsible for transaction closing cost of capital gains tax.

The "Deed of Sale" is the document showing legal transfer of real estate property ownership. The deed of sale is then taken to the Registry of Deeds to be officially recorded. "Tax Declarations" are sometimes used but are not very enforceable in court because there may be many others with a tax declaration claming ownership of the same property. A property may be Titled by taking the Tax Declaration to the Registry of Deeds to process to be officially titled. Always purchase property with a proper deed of sale if possible, and if there is not one, a tax declaration is your last choice. Owners must be active in enforcing their property rights. Possession is 90 percent ownership. If the property owner can only show a tax declaration as an evidence of ownership, that means the land is untitled and not registered under the Torrens system, the buyer will not get as much protection, as his title will not be absolute and can yield to one who has a better right, like the person actually possessing and occupying or tilling the land, and who subsequently applies for the titling of the land in his name. It is possible for two or more tax declarations issued to different persons with exactly the same technical description, or referring to the same property.
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Acquisition is the act of procuring or getting a hold of real estate property. Disposition is the manner of alienation, transfer of possession and ownership thereof as prescribed by the Philippine law. The acquisition and disposition of real estate is embodied in written agreements or contracts voluntarily entered into and subscribed by the selling and buying parties thereof, before a public officer designated as the Notary Public of the City or Province where the subject property is located. Thereafter, the instrument embodying the particular real estate transaction is required by law to be recorded in the Registry of Deeds in the City or Province where the real estate property is involved and located. The Philippines uses the "Torrens" system of real estate ownership. See below for more information.

An adapted form of the "Torrens" system of land registration is used in the Philippines. The system was adapted to assure a buyer that if he buys a land covered by an Original Certificate of Title (OCT) or the more familiar Transfer Certificate of Title (TCT) issued by the Registry of Deeds, the same will be absolute, indefeasible and imprescriptibly. The registered owner will never lose his ownership to squatters no matter how long such land was illegally occupied.

Presidential Decree No. 957, which regulates the sale of subdivision and condominium developments, and providing penalties for violations thereof. The National Housing Authority has exclusive jurisdiction to regulate real estate trade and business, a function, which is presently exercised by the Housing and Land Use Regulatory Board (HLURB). Certain conditions are required before a license to sell condominium development units and or subdivision development lots and homes is issued to a Filipino or Foreign owned individual or corporation. The requirements include a certificate of registration, a performance bond, and an approval of the
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building plans and specifications. Violation of these rules could mean fines, cancellation of license and or imprisonment.

Capital gains tax 6% of actual sale price. This is paid by the seller but in some cases it might be expected that the buyer pays. This percentage could differ if the property asses is being used by a business or is a title owned by a corporation, in this case the percentage is 7.5% Document stamp tax 1.5% of the actual sale price. This is paid by the seller but in some cases it might be expected that the buyer pays. Transfer tax 0.5% of the actual sale price. Registration fee 0.25% of the actual sale price.

Capital gains tax 10% of actual sale price. This value might be expressed as part of the sale price and it is worth checking. Document stamp tax 1.5% of the actual sale price. Transfer tax 0.5% of the actual sale price. Registration fee 0.25% of the actual sale price.
INVESTORS GUIDE What "CNN International" says about the Philippine Real Estate Market...

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The Philippines stands strategically at the crossroads of Asian and international trade, making it an important port of call for both the East and the West. It is within the immediate reach of its Asian neighbours, 2 hours by air from Taipei and Hong Kong, and 4 hours from Tokyo and Seoul. The Philippines is one of the fastest growing economies in Asia. Moreover, the abundance of highly-skilled, English-speaking workers presents investors the opportunity to readily begin business operations. The governments progressive economic policies have resulted in a most hospitable business climate for local and foreign investors. Generous tax incentives and simplified investment procedures assure investors of highly attractive returns on their investment.

The Philippines is blessed with an abundance of disciplined and well-trained personnel who can effectively meet the most demanding requirements. Philippine Universities and other institutions of higher learning are known to produce proficient managers, engineers, technicians, and support staff, who are generally fluent in English, welleducated and technically competent. Moreover, their high productivity and low turnover ensure business momentum.
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Because of the growing population of the Philippines the demand for housing has continued to rise which guarantees a steady stream of interested buyers and tenants as a home is always a rewarding investment as it gives one a sense of pride and ownership. Real estate in prime locations is always an excellent collateral security against loans, and allows financing to be secured anytime. Property in projects that are being sold pre-development generally appreciate in value when the project is finished. Property in projects that are near malls and other such high traffic areas are very easy to rent out. The US Dollar has a higher investing value because of its 125% increase vis--vis the Philippine Peso. Property developments are designed using international standards and concepts, of which the majority are developed near Shopping Malls, Schools, Hospitals and Churches for example. Because of the effects of the 1997 Asian economic downturn, prices are very affordable with many different payment options and financing terms being offered by both large and smaller developers respectively. Static's show that Philippine property appreciates at an average of 10% per year, which is higher than the US property market, thus giving a far higher return on your investment.

Exemption from corporate income tax up to eight years. After an initial 8-year period, a minimum corporate tax of only 5% of gross income, instead of the normal 34% of net income. Duty free importation of capital equipment, construction materials as well as raw materials used in production. Tax credit for import substitution. Exemption from wharfage dues, export tax impost, fees. Tax credit on domestic capital equipment. Tax and duty-free importation of breeding stocks and generic materials. Tax credit on domestic breeding stocks and genetic materials. Additional deduction for training expenses (labour and management). Additional deduction for labour expense (50% of wages corresponding to increment in number of direct labour subject to certain conditions). Permanent resident status for foreign investors and immediate
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members of the family. Employment of foreign nationals. Exemption from SGS inspection. Simplified import-export procedure.

National Flag: Land Area: Coastline: Geography: Capital: Political System: 300,000 sq. km. (Archipelago of 7,100 Islands) 36,289 Kilometres Three main island groups: Luzon, Visayas & Mindanao Manila (Land area - 38.3 sq. km) The 1987 Constitution provides for a presidential system of government with a bicameral parliament and three (3) equal branches: executive, legislative and judiciary. 76.5 Million (As of May 1, 2000) 82.7 Million (2004) 255 persons/sq. km. (As of May 1, 2000) 2.31% (1990 - 2000)

Population: Projected Population: Population Density: Population Growth Rate: Labor Force Population 68.9 (April 2004) Rate: Employment Rate: 86.3 (April 2004) Literacy Rate: 94.6% of total population - among the highest in the world Number of Graduates Secondary school, over one million, college Annually: level, 350,000 Languages Spoken: Filipino, English and other regional dialects Ethnic Profile: Christian Malay 91.5%, Muslim Malay 4%, Chinese 1.5%, others 3% Major Religion: 85% are Roman Catholics, the rest are Protestants and Muslims Climate: Tropical with temperatures ranging from 23-32 C. Two distinct seasons: Wet (June to October) & Dry (November to May)
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Currency Unit: Business Hours:

Time Zone: Average Flying Hours: Tokyo 3:35 Hong Kong 1:20 Jakarta 4:25 Kuala Lumpur 3:30 Paris 16:40 New York 17:30 Singapore 3:00 Sydney 7:40 Shanghai 2:20 Seoul 4:00 San Francisco Frankfurt 13:00 11:50 Taipei 1:20 Bangkok 3:00 Brunei 2:30 Viet Nam 2:30 Brussels 14:16 London 14:00 GNP: 6.1% (1st Sem 2004) GDP: 6.3% (1st Sem 2004) Inflation: 4.7%, (1st Sem 2004) Exports: US$ 18,734.1 million (1st Sem 2004) Imports: US$ 19,934.9 million (1st Sem 2004) Principal Exports: Electronics (66%); Garments (6%); Machineries/Transport Equipment (5%) Principal Markets: USA, Japan, Netherlands, Hong Kong, Malaysia, Singapore, Taiwan, China

Philippine Peso 0800-1700 (Private/Gov't Offices) 0900-1500 (Banks) 1000-2000 (Stores/Malls) GMT +8 hrs.

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