What To Do Before Buying A Property?

When our firm had over the weekend its first outreach program, Carlos was the first person to approach me. He worked as a computer programmer for 10 years in Dubai. Upon his return to his hometown, he opened a small computer shop below the apartment unit where he is staying. After six (6) months of renting this apartment, his landlord offered to sell the apartment to him. Anxious about the offer, he went to seize the opportunity and asked: “Sir, what do I need to do before buying a property”?

Due diligence is the answer. A buyer must conduct a due diligence on the property he wants to buy before agreeing to buy such property. Due diligence involves researching and verifying relevant information such as the seller’s title to the property and checking the real property itself. Due diligence aims at assessing the risk involved in the acquisition of the real property. This is why it is more prudent to get the assistance of a lawyer in conducting a legal due diligence.

Nevertheless, I provided Carlos a checklist of items that he must particularly look into before finally deciding to buy the property. These are:

1. Get a copy of the owner’s duplicate copy of the title; compare this copy with the original copy filed with the Register of Deeds; check if the title bears security marks and its unique texture; compare the serial number; notably, the last two digits of the title number must be the same as the the last two digits of the page number located at the top right hand portion of the title.
2. Know the owner and/or the seller. Inquire about his citizenship, age, and civil status.
3. Know the extent of ownership. Is it exclusive or co-owned?
4. If the person signing the deed of sale is an agent, or a person other than the owner himself, ask if the agent has a special power of attorney, or in case of a corporation, a board resolution authorizing the sale.
5. If the sale is through an agent, ask if the registered owner is still alive?
6. What was the manner of acquisition? Was it through purchase, succession, or donation?
7. Check compliance with the legal formalities such as notarization.
8. Take note of the annotations of liens or encumbrances at the back of the title.
9. Check the Entry Book of the Register of Deeds.
10. Verify the name and signature of the Register of Deeds appearing on the title.
11. Confirm payment of taxes, including real property tax with the Office of the Treasurer and the Assessor’s Office.
12. Ask around the neighborhood within the immediate vicinity about the persons living in the property.

What Is A Deed Of Sale?

The “Deed of Sale” or “Deed of Absolute Sale” is the document showing legal transfer
of real estate property ownership. It is entered into by two parties namely, the buyer and
the seller who must be of legal age. After notarization, the deed of sale is then taken
to the Registry of Deeds to be officially recorded after paying the documentary stamp,
transfer tax and registration fees.

All government taxes, transfer fees and incidental or miscellaneous expenses will be
shouldered by the buyer, whereas the seller will pay for the capital gains tax equivalent
to 6% of the selling price on the Deed of Sale or the zonal value, whichever is higher.

To assure the buyer that the land he buys is covered by an Original Certificate of

Title (OCT) or the Transfer Certificate of Title (TCT) issued by the Registry of Deeds,

the “Torrens” system of land registration was adapted and used in the Philippines and

confirming that the same is absolute, indefeasible and imprescriptible.

A Transfer of Certificate of Title (TCT) is a proof of ownership of a subdivision lot issued

by the Register of Deeds of the city or municipality where the subdivision project is


A Condominium Certificate of Title (CCT) is proof of ownership of a condominium unit

issued by the Register of Deeds of the city or municipality where the condominium

project is located.

The following documents are needed when transferring the title or Transfer of Certificate
of Title (TCT) and Condominium Certificate of Title (CCT) for condominium unit to the
new owner:

1. Certified true copy of the title

2. Notarized copies of the Deed of Sale

3. Latest tax declaration of the property

4. Certificate from the Bureau of Internal Revenue that the capital gains tax and

documentary stamps have been paid

5. Receipt of payment of the transfer tax and registration fees