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Standard Procedure for Property Sale in the Philippines
Below is an outline of a proper sales procedure for selling a property in the Philippines for everyone’s reference. This is what we Professional Brokers generally practice but some vary with their procedures. I’ve also made an emphasis on documents needed should the property ownership be on land or condominium.
1) Seller and Selling Broker discuss details of the property and agree on Professional Fees, terms and conditions of sale. It’s at this point where transparency on status of property is known ( clean title, existing loan, liens and encumbrances, etc ).
2) Authority to Sell ( Exclusive or Non-Exclusive )
3) Selling Broker views property for proper assessment of market value
4) Selling Broker puts property on the market ( marketing cost to advertise must be mutually agreed upon but the normal practice in general brokerage is that all expenses are Selling Broker’s cost.
5) Property viewing by Buyers / Network Brokers
6) Buyer prepares a Letter of Intent or Offer to Buy if interested on property
7) Seller accepts ( conforme ) the Letter of Intent
8) An earnest money agreement may be given at this time to hold the property subject to due diligence of the buyer. Earnest money may either be forfeitable or refunded depending on the status of the documents.
9) Due diligence begins with the following documents : ( Some owner’s / professional brokers get the documents below prior to marketing the property to assure that the property has no liens or encumbrances ). An authority to transact signed by the owner addressed to the Selling Broker would be needed to get the certified true copies of the Title, Tax Declaration and Tax Clearance.
REGISTER OF DEEDS
a) Certified True Copy of Transfer Certificate of Title ( Land )
Certified True Copy of Condominium Certificate of Title ( Unit )
Certified True Copy of Condominium ( Parking – if applicable )
a) Certified True Copy of Tax Declaration ( Land )
b) Certified True Copy of Tax Declaration ( Improvement / Building )
c) Certified True Copy of Tax Declaration ( Condominium )
d) Certified True Copy of Tax Declaration ( Condominium parking, if applicable )
e) Real Estate Tax Clearance for Current Year
f) Certificate of Non-Improvement if property is a “vacant lot”
a) Certificate Authorizing Registration ( Bureau of Internal Revenue <BIR> document from previous sale when current owner bought property, this document may have not existed depending on the year bought ). Should this document not be available with owner, the Register of Deeds should have a copy.
b) Original Real Estate Tax Receipts – current year
c) Lot Plan / Subdivision Plan
10) Preparation of Contract to Sell / Deed of Absolute Sale
11) Preparation of summary of expenses for both Seller and Buyer :
a) Capital Gains Tax / Creditable Withholding Tax ( whichever applies )
b) Documentary Stamps Tax
c) Business Tax ( if applicable )
d) Transfer Tax
e) Registration Fees
12) Upon a mutual agreed contract and a finalized Deed of Absolute Sale / Contract to Sell, a date to finalize transaction is made.
13) Full payment and signing of the Deed of Absolute Sale. All check payables both to the Seller and Government Entities for applicable taxes must be in Manager’s Checks.
14) Deed of Absolute Sale Notarization
15) Seller turns over the ORIGINAL copies of the following :
a) Transfer of Certificate of Title – ( land ) – Owner Copy
b) Condominium Certificate of Title ( condominium )
c) Tax Declaration ( Declaration of Real Property )
d) Tax Clearance – ( both land and improvement )
Tax Clearance – ( condominium unit and parking if applicable )
16) Upon clearance of Manager’s Check payment, owner pays Broker’s Professional Fees although some owners wait until the Certificate Authorizing Registration is issued by the Bureau of Internal Revenue.
17) Selling Broker normally handles payment Capital Gains Tax and Documentary Stamps Tax payment and the filing of appropriate document to BIR until the Certificate Authorizing Registration ( CAR ) is released by BIR.
CAR is the document that authorizes the transfer of title to the new buyer, it’s basically clearance that all the right taxes have been paid by the Seller and gives way for the Register of Deeds to transfer title into the name of the Buyer.
18) Upon release of CAR, all documents are now turned over to the Buyer’s Broker for him / her to handle the payment and processing of the following ;
a) Transfer Tax payment to City Treasurer’s Office ( must be paid within 60 days of notary otherwise, corresponding penalty applies )
b) Business Tax to City Treasurer’s Office – if applicable ( be sure to check with the City Treasurer where the property is located )
c) Registration Fees to Register of Deeds
d) Entry Fees – Register of Deeds
e) Notarial Fees – Register of Deeds
19) Buyer’s Broker then submits all required documents to Register of Deeds :
a) Deed of Sale
b) Certificate Authorizing Registration with 4 page Tax Clearance
c) Original Transfer Certificate of Title / Condominium Certificate of Title
d) Original Tax Declaration
e) Tax Clearance – Real Estate Tax
f) Certificate of Management ( condominium )
g) Certificate of Non-Improvement ( vacant lot )
20) Upon release of new Transfer Certificate of Title / Condominium Certificate of Title, a certified true copy of the new Title and a photo of the property are needed to process the new Tax Declaration in name of new Owner.
21) Issuance of New Tax Declaration
Please be advised that unfortunately, our government agencies procedure changes from time to time and it’s the responsibility of a property owner to find out any new laws or resolutions that the local or city government has passed.
Finally, since we are now under the Professional Regulatory Commission ( being a professional licensed broker requires continuing education program, association membership, weekly association meetings, conventions, the inconvenience of processing our Professional License from Professional Regulatory Commission ( PRC – they could improve on their services but generally did an acceptable job ) which required time, patience, business cost and expenses that go with the territory.
It’s best to deal with a ” Professional licensed broker” for your own safety to avoid any unnecessary problems and to be aware of any laws that may be advantageous or disadvantageous to both parties going into the sale, specially now that the RESA Law is in effect which penalizes non-licensed people from transaction real estate deals.
For further details on this property, please call our office at 8561365 or 5536051.
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Robert G. Sarmiento Properties
Professional Affiliation :
Philippine Association of Real Estate Brokers
Member, City of Taguig Real Estate Board 2016 – 2017
Real Estate Broker’s Association of the Philippines 2000-2015
President, Greenhills Chapter 2008, 2009
Philippine Association of Real Estate Brokers
San Juan Mandaluyong Chapter 1998, 1999
PRC # 6569
AIPO # 000897
02 5148481 ( direct line )
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Email : [email protected]
Website : www.robertgsarmiento.org