1. Sign A Contract of Agreement

The owner or broker will first discuss the terms of the sale, the commission and the fees. It is also necessary to scrutinize the documents to make sure that the land title meets the condition and free from encumbrances, liens and loans.

2. Issue an Authority to Sell

The purpose of the agreement or contract is to bind the broker as the agent of the owner providing the essential information and the amount of commission of the property that will be sold. The contract will also indicate if the owner will bestow upon the exclusive rights of the broker or a non-exclusive authorization to sell the property. The broker will secure the necessary documents before selling the property to ensure that there are no problems concerning the property. The broker will also check if the property is free from encumbrances. An encumbrance means that another person has interest in, right to, or legal liability on the property that either deter the process of transferring the title or diminish the value of the property.

3. Assessment of property by the broker

The broker will check the property as a way of assessing its current market value. It is important for the property to be appraised to determine its actual price. There are several factors that will be taken into account in determining the asset's value such as the area and location of the property.

4. Broker will offer and sell the property

Before a broker can market the property, it is important that the owner agrees on how to market the property. There are also some limitations that should be taken into consideration such as privacy when realizing photos or disclosing the location online. Both parties must also decide on how to split the marketing costs such as communication and transportation expenses. Nowadays, the common practice is that the broker shoulders the expenses depend on the amount of the commission.

5. Viewing of the Property

Once the buyers get in touch with the broker or owner, they will proceed with viewing the property. The owner needs to make sure that the property is presentable to add value to the property.

6. Write a Letter of Intent or Offer to Buy

The buyer will also offer a Letter of Intent to the property owner declaring the intention to purchase. More often than not, the Letter of Intent is given at the first stage in documenting a sale of real property.

7. Acceptance of Owner

The owner accepts the Letter of Intent once signed. This indicates acceptance of the terms given by the buyer. Upon acceptance, the seller will be bound to promise not to offer the property to other buyers so long as the buyer does not breach the conditions in the letter.

8. Provide Earnest Money

The earnest money is provided as means of holding the property subject to the buyer's due diligence. It can be forfeited when there is default on the buyer's part. The money can also be used as refundable subject to deductions depending on the agreement that both parties made.

9. Preparation of Legal Documents

The legal documents must be secured in preparation of the transfer of ownership to the buyer.

These documents must be obtained from the Register of Deeds:

• 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 )

The owner or broker must procure these documents from the Assessor's Office:

• Certified True Copy of Tax Declaration ( Land )

• Certified True Copy of Tax Declaration ( Improvement / Building )

• Certified True Copy of Tax Declaration ( Condominium )

• Certified True Copy of Tax Declaration ( Condominium parking, if applicable )

• Real Estate Tax Clearance for Current Year

• Certificate of Non-Improvement if property is bare and without structures such as a house or a building

The Property Owner should also secure the following documents"

• Certificate Authorizing Registration from the Bureau of Internal Revenue (BIR)

• Original Real Estate Tax Receipts – Current Year

• Lot Plan / Subdivision Plan

A Deed of Absolute sale will be prepared and signed. The seller transfers ownership of the property to the buyer. The Deed of Absolute Sale should be signed by both parties so it will be considered to be the absolute owner of the property. After which, both parties will proceed with the payment of expenses such as capital gains tax, documentary stamps tax, registration fees and transfer tax. Upon full payment of the purchase price and other expenses, the contact will be signed and ownership will be legally transferred to the buyer. It is important to notarize Deed of Absolute Sale so it will become a public document.

The seller will turn over the original copies of Transfer of Certificate, Condominium Certificate of Title, Tax Declaration, Tax Clearance for both land and improvement, Tax Clearance for condominium unit and parking. The buyer must also obtain a new tax declaration and when the new tax declaration has been released, the former owner's full obligation will be terminated.

Certified True Copy of the Property’s Certificate of Title

– for us to initially verify the ownership status and legal conditions of the property.

Certified True Copy of the Tax Declaration for the land, and if there are any improvements on the land (house, building, apartments, etc.)

– For us to know and compute the Real Estate Taxes of the subject property, as well as the title of the building/improvements on the land.

Tax Clearance or Latest Real Property Tax receipt 

– to verify if the Real Property taxes are up to date.

Lot plan 

– to know the dimensions of the property.

Vicinity map 

– to know the location of the property and its’ surrounding areas.

Or if you don’t have the vicinity map, you can download, install and use Google Earth to locate and identify your property using high-technology satellite images. See video below on how to use Google Earth:

Copy of Registered Owner/Seller ID – for identification purposes.

If the seller is the authorized representative of the registered owner, a copy of the duly notarized Special Power of Attorney would be in order, as well as the ID’s of both the registered owner and the authorized representative.

A Special Power of Attorney is a document executed by a principal to give specific authority to a certain person to be his/her “authorized representative/attorney-in-fact”,  to act and do definite functions in behalf of the principal who gives the authority. This document must be notarized by a notary-public if executed within the Philippines, or the Philippine Consulate, if executed from another country, to be recognized as legal instrument. This Special Power of Attorney must be accompanied by valid ID’s of both the principal and the authorized representative.

This is applicable in cases when the owner of a property is not available to do specific functions like; negotiating to sell/lease his own property, sign contracts such as: Contract to Sell/Absolute Deed of Sale/Lease Contract, receive payments, etc.  Hence, the owner would then appoint a representative to do these functions in his behalf, as though the owner-himself would do so, by executing a SPECIAL POWER OF ATTORNEY.

SAMPLE SPECIAL POWER OF ATTORNEY FORM

To learn more about Real Estate Property Titles; Who have the rights to own, sell, lease, mortgage, donate, exchange or joint venture the Real Estate Property in the Philippines?You can read these related articles below for more information:

WHO OWN THE PROPERTY? THE HUSBAND OR THE WIFE?

CAN FOREIGNERS OWN PHILIPPINE PROPERTIES?

WHO INHERITS WHAT? AND INHERITANCE TAX?

In order to submit these documents, you can scan them into a .jpeg picture files and upload them into a digital photo album over the internet. I will show you how to create internet photo albums later on in this article.

We will also need a written detailed description of the property. What can you tell us about the property you are selling? You can input that on the email form below.

The next very important information in selling the property is “HOW MUCH ARE YOU SELLING THE PROPERTY?“

People need to realize that everything follow the Law of Supply and Demand. Simply put, if the price for the property is too high above the current fair market value, it will be perceived as “over-priced” or “expensive”, hence the property will not likely to sell. If the price for the property go below the prevailing fair market value, it will be perceived as “good deal” or “bargain sale” hence will increase in the likelihood of being sold.

Want to know the Fair market Value for your property? You can shoot us an email and inquire for our Professional Real Estate Appraisal Services for a minimal fee.

1. Hire one of our professional licensed real estate appraisers to appraise your property for a very minimal fee. By doing so, you can have a complete, detailed and comprehensive, written appraisal report on your property done by an officially licensed real estate appraiser.

2.  Click here to read about–> BASIC FAIR MARKET VALUES FOR REAL ESTATE MORONS

After coming up with the selling price, next question a seller needs to answer would be:

Taxes and Fees that are normally the SELLERS’ obligations:

ANNUAL REAL PROPERTY TAX UP TO THE TIME OF SALE  – Depends upon the property

CAPITAL GAINS TAX – 6%

DOCUMENTARY STAMP TAX – 1.5%

Seller usually pays for the Brokers’ Professional Fees. – Usually 5%

Taxes and Fees that are normally the BUYERS’ obligations:

TRANSFER TAX AND REGISTRATION FEE – about 1% more or less

NOTARIZATION FEE – depends upon the lawyer (1% of Selling Price)

Documentary Processing Fees – depends upon what documents needed to be processed

One of the most important documents that you need in order to transfer a title of a property from the seller to the buyer is the Certificate Authorizing Registration (CAR) and Tax Clearance (TCL) from the Bureau of Internal Revenue (BIR). In this post, I’ll share a step-by-step on how to secure them.

The CAR and TCL is your proof that the proper taxes on the transaction have been paid. The Register of Deeds requires the presentation of these documents as a pre-requisite for title transfer

What is the process?

The first step is to have a notarized document evidencing the sale of the real property classified as a capital asset, usually a Deed of Absolute Sale. You may find samples of this document through google.

Next, the taxes need to be paid. You may refer to previous posts on Capital Gains Tax (CGT) and Documentary Stamps Tax (DST).

After you have paid the taxes, you need to request for the issuance of a CAR and TCL from the Revenue District Office where the real property is located. You need to submit the documents supporting the transaction, as well as proof that the correct taxes (both the type of tax and amount of tax), have been paid. The Checklist of Documentary Requirements is in the annexes of Revenue Memorandum Order (RMO) No. 15-03, in particular, Annex “A”. For additional documents, refer to Revenue Memorandum Circular (RMC) No. 76-07 dated October 25, 2007.

The process flowchart is in Annex “L” of the Annexes of RMO 15-03.

Please take note that the CAR for the transfer of real property shall be released by the Revenue District Office (RDO) where the real property is located. Thus, it is important for you to determine the correct RDO since you will be paying the taxes in the Authorized Agent banks (AAB’s) of such RDO.

It is possible that you may think a property falls under the jurisdiction of one RDO when in fact it is under another RDO. If you have already paid the taxes in an AAB of another RDO, you may have to undergo certain processes to transfer your payments to the correct RDO. So, my advice is to look at the map of the coverage of each RDO (there should be a big map at the RDO) to check if indeed the property falls within the jurisdiction of the said RDO.

Mandatory Requirements

For a sale of real property considered as a capital asset subject to capital gains tax (CGT), the mandatory requirements are as follows:

• Tax Identification Number (TIN) of buyer and seller [If one of them does not have a TIN, get a TIN by filling out and submitting BIR Form No. 1904]

• Notarized Deed of Absolute Sale/Document of Transfer. Bring the original and at least two photocopies. The photocopies will be compared against the original and the BIR will retain only the photocopies.

  • Notarization fee is usually 1% of the selling price, but some notaries public may charge a lower fee. Just make sure that the notary public is a real one.

  • Prepare at least five copies of the Deed of Absolute Sale (one for the notary, one for the buyer, one for the seller, one for the BIR, and one for the Registry of Deeds).

  • Prepare photocopies of two government-issued ID’s each of the buyer and the seller. You need the information in the said ID’s in the acknowledgment of the Deed (indicate the name, ID number, date issued, place issued, date of validity).

  • Owner’s copy of the Transfer Certificate of Title (TCT), Condominium Certificate of Title (CCT), or Original Certificate of Title (OCT). Bring the original and at least two photocopies. The photocopies will be compared against the original and the BIR will retain only the photocopies.

    • You may also get a Certified True Copy (CTC) of the TCT, CCT, or OCT from the Registry of Deeds.

    • For Quezon City, the Registry of Deeds is located behind the National Statistics Office (NSO) along East Avenue. Make sure that you have with you a photocopy of the title, authorization letter from the owner, and ID’s of the owner who authorized you to get the CTC of the title.

    • When Jay secured a CTC last July 2012 from the Quezon City RD, the issuance fee was P144.00 and the IT Service Fee for the issuance was P643.88, for a total of P787.88 for one CTC.

    • Make sure that you get a genuine title and not a fake one. Check the Guidelines On How to Detect Fake Titles from the LRA website.

• If applicable, Sworn Declaration of No Improvement by at least one (1) of the transferees or Certificate of No Improvement issued by the Assessor’s Office

  • Format may be found on Annex “D” of the RMO 15-03.

• Get a Certified True Copy of the latest Tax Declaration from the City Assessor’s Office.

  • According to the Quezon City government website, you will need:

    • Authorization from the property owner;

    • Photocopy of a Valid ID of the requesting party;

    • Computer print-out from EDP or any reference such as realty tax payment, title, or old tax declaration for purposes of verification

    • Certification fee of P50.00 plus P20.00 secretary’s fee (if to be used for BIR)

• Official Receipt/Deposit slip evidencing receipt by the owner of the payment of the purchase price

• Duly validated tax return as proof of payment of taxes

Requirements as added by RMC No. 76-2007:

1. Photocopy of the official receipts issued by the seller, for purposes of determining whether the sale of real property is on cash basis, a deferred payment sale (when payments in the year of sale exceed 25% of the selling price) or on installment plan (when payments in the year of sale do not exceed 25% of the selling price). The original copy of the official receipts shall be presented to the Bureau for authentication during the processing of the application for Certificate Authorizing Registration (CAR). However, if the seller is not engaged in business, the acknowledgement receipts issued by the seller to the buyer or any proof of payment shall be presented.

2. Certified true copy of the original CAR (copy of the Registry of Deeds) pertaining to the transfer of property prior to the issuance of Original/Transfer Certificate of Title (OCT/TCT) or Condominium Certificate of Title (CCT) which is the subject of the current sale/transfer, or certification issued by the Registry of Deeds indicating the serial number of the CAR, date of issuance of CAR, the Revenue District Office Number of the district office that issued the CAR, the name of the Revenue District Officer who signed the CAR, the type of taxes paid and the amount of payment per tax type.

Additional requirements include:

• Notarized Special Power of Attorney (SPA), if the person who signed the document is not the owner which appears on the Title. You may find samples of this document through google – here is one.

• Certification of the Philippine Consulate, if the document is executed abroad. The SPA will be either consularized or authenticated. The document will usually have a red ribbon in front.

• Location plan/Vicinity map if the zonal value cannot be readily determined based on the documents submitted. I think using google maps (maps.google.com) may suffice.

• Such other requirements as may be required by law/rulings/regulations/other issuances

I suggest that you already have the checklist of documentary requirements ready, and have one file containing all the originals and two sets of photocopies so that the BIR One-Time Transaction (ONETT) officer will have an easy time evaluating your documents.

One-Time Transaction (ONETT) Computation

The BIR’s ONETT team will also be relying on this computation sheet so I suggest you make your own computation so you can compare it with the computation of the BIR. The computation sheet can also be found in Annex “B” of RMO No. 15-03.

If all documents are complete, the CAR and TCL should be ready after around two (2) weeks. Just call the contact person at the number on the Claim Slip or “CS” (Annex “C” of the RMO 15-03) and they will give you to inquire if the CAR is ready. When you call, be sure to have the claim slip with you so you are ready with the CS No., date filed, and the name of the transferor and transferee.

Read more: https://www.foreclosurephilippines.com/how-to-secure-a-bir-certificate-authorizing-registration-car-and-tax-clearance-for-the-sale-of-real-property-classified-as-a-capital-asset/#ixzz6ehbzrfro 

This is very important! Detailed pictures of the property will tremendously help in marketing. This is true especially if the property have improvements such as house for sale, or building, etc. Buyers would like to have an initial idea on how the property offered for sale looks like. It is best to take pictures in all angles of the property. The more pictures showing each and every point of view of the property, the better!

– Take pictures of the outside of the property to see how it looks from the outside.

– Take photos of the road fronting the property.

– Take photos of the surrounding neighborhood.

– Take photos of the inside of the property, 1 shot from every corner and every side of the property, at least 5 to 6 photos per area. 6 pictures from the living room, 5 pictures from the kitchen, 5 pictures from the bedroom, etc.

Note: Make sure your photos are not too small, because the prospective buyers might not be able to clearly see or read the details in them. Also make sure that the photos are not too big or else it would take a very long time for these photos to upload onto the internet. This is also true for scanned documents.

– Maximum picture and/or document size per file: 8″ x 11″ and minimum size of 1″ by 1″  with 70 to 150 dpi resolution would do.

– With a file size between 100KB to 500KB for more convenient photos upload.