Bank Guarantee – Word of Warning

bank loan

Word of Warning : Please be advised that as a Listing Broker, specially when there’s a Bank Loan involved, a Bank Guarantee is merely a piece of document that could only be encashed by the Seller of the property once all required documents are received by the mortgagee’s bank. Most banks have a standard procedure of documents needed and average time to process title transfer from the Bureau of Internal Revenue to Register of Deeds which normally ranges from 45 – 60 days, this simply means that the new title issued under the new owner is already annotated with the bank’s mortgage at the back of the new title and a new tax declaration  under the new owner has already been issued.   ( A new requirement by some banks is a Certified True copies of these new documents in the name of the new owner. )   Thus the bank guarantee issued to the seller should be converted into Cash already. There is a certain bank ( just email me at [email protected] should you need to know which bank this is )  that has been asking for documents that most other banks don’t require and their processing time is way slower than most.

Being in the business for 30 years, I’ve never come across this NEW documentation this particular bank requires. Take note of this as this is such a disadvantage to SELLERS ! I just hope this bank can get it’s act together … Banks easier to deal with are Banco De Oro, PS Bank, Security Bank, Metrobank, HSBC and RCBC. By the way, one reason this particular bank got the business is because of it’s low interest but this should never be the deciding factor and a clause should protect the Seller from any delay in release of funds !

Moral lesson is to check the final documents required by the Bank giving the loan and what participation, we as the Listing Broker have in processing the documents.

By the way, it does make a difference if the Buyer getting the loan has a good relationship with originating bank of  the loan !

have a great day !

robert

Robert G. Sarmiento Properties
Professional Affiliation :
Real Estate Broker’s Association of the Philippines
President, Greenhills Chapter 2008-2009
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