Procedure on Real Estate Sale Transaction - Part 1 of 3
This is the complex step-by-step procedure followed by a licensed Real Estate Broker to perfect a real estate sale transaction.
Go to PART 2
Go to PART 3
Documentations and processes involved in securing a listing
§ Inspect the property- the first step in getting a listing is to make an ocular inspection of the property. Get a profile of the property by getting all the necessary descriptions and important information about it (i.e. location, property type, topography, lot area, frontage orientation, neighborhood, etc.)
§ Tip: bring a camera when inspecting the property. Take pictures of the property and its surroundings. Pictures tell a lot more than words.
§ If you think it is a good listing, then proceed to #2. If not, inform the seller that you are not interested to list the property.
Get the necessary documents from the seller (photocopies are sufficient)
§ Transfer Certificate of Title (TCT)/ Condominium Certificate of Title (CCT)
§ Tax Declaration (lot/improvement)
§ Lot plan/vicinity map/subdivision plan/floor plan, whichever is applicable
§ Official receipt of the latest payment of Real Estate Tax
§ Valid ID with picture and signature of the seller
§ Tax Identification Number (TIN)/ Community Tax Certificate (CTC) of seller
§ Special Power of Attorney, if seller is not available to sign the documents.
If seller is a corporation, these additional documents should be furnished
§ Corporation’s Security and Exchange Commission (SEC) Registration and Articles of Incorporation
§ Board Resolution and the Secretary’s Certificate authorizing the sale of the property
§ TIN of the corporation
§ CTC of the corporation
§ Tip: Minimum requirements to evaluate the property are the Title, Tax Declaration and Special Power of Attorney (if applicable).
Evaluate the documents submitted- List the documents that need to be certified and updated
§ At this point, you can already see whether there are deficiencies and problems on documents or on the property itself. Inform and help the seller rectify the problems.
§ Tip: Things that you may need to check- the number of owners of the property. Are the owners still alive? Are they all amenable to the sale? Is the property mortgaged? Are there liens, claims and encumbrances on the property? Are the real estate taxes being paid diligently? Is the Tax Declaration in the name of the owner? Is the property under extra-judicial settlement? (See Section 4, Rule 74 of the Rules of Court for guidance).
§ If the seller is not in the Philippines at the time of sale, the Special Power of Attorney should be authenticated by the Philippine Embassy in the place where the seller is located.
§ *If there are problems in the documents that are found to be minor and can be addressed, you may then proceed to #4. If the problems are complicated and irreconcilable, you may have to temporarily forego with the listing and store it in your inactive files for future use. Who knows, these problems will be resolved and the property may be ready for sale again.
Get a written Authority from the seller and obtain the following from the proper government agencies
§ TCT/CCT- certified true copy
§ Tax Declaration (lot/improvement)- certified true copy
§ Certificate of No-improvement if the property is a vacant lot
§ Property Tax Clearance. The Certificates and Tax Clearance should be obtained from the corresponding agencies where the property is located. There are minimal fees for processing the documents.
Get the certified true copy of the title from the Registry of Deeds
Requirements of the Registry of Deeds when getting the certified true copy:
§ Letter of Authority from the owner with a copy of seller’s valid ID, if required
§ Photocopy of the Title
§ Tip: When getting a certified true copy of the title, you may want to trace the history of the title, 3 to 4 generations back. Verify the technical descriptions on the Title. Check for discrepancies.
Plot the lot based on the technical description of the title. This will tell you if the descriptions were accurately written. Beware of fake titles.
Get the certified true copy of the Tax Declaration from the Assessor’s Office
Requirements of the Assessor’s Office when getting the certified true copy:
§ A photocopy of the Tax Declaration of the lot/improvement
§ A letter of Authority and TIN of the owner, if required
§ The certification should indicate that it is the latest Tax Declaration with the corresponding fair market value.
Get a Certificate of No-improvement (for vacant lots) from the Assessor’s Office
Requirements of the Assessor’s Office when getting the Certificate:
§ Notarized affidavit of no improvement from the owner, if required
§ Photocopy of Tax Declaration
§ Written authority of the owner, if required
Get the Tax Clearance from the City Hall Treasurer’s Office
Requirements of the Treasurer’s Office when getting the clearance:
§ Photocopy of Tax Declaration
§ Letter of Authority from the owner, if required
§ Latest official receipt (sometimes the original copy is needed)
Determine if seller is subject to the following Taxes
§ Value Added Tax (VAT)
§ Business Tax
§ Creditable Withholding Tax (CWT)
§ Capital Gains Tax (CGT)
Get a letter of Authority to Sell from the owner
The written authority should indicate:
§ Exclusivity or non-exclusivity to sell the property
§ Description of the property
§ Selling price
§ Broker’s fee
§ Expenses to be shouldered by the seller and the buyer
§ Expiration of Authority to Sell the property
§ Hold-over clause
Go to PART 2
Go to PART 3