Mar 05, 20By Sam Morales

If you are planning to buy a condo in the Philippines, it is important that you secure the right documentation towards property ownership. As a future owner, having proper documentation not only protects your invested time, money and effort, but will also act as proof or reference should there be any hiccups in the condo buying process.


We list down the six documents you will need at every stage of the condo buying process:


1. Like the property already? Prepare a Letter of Intent

A Letter of Intent contains information about the conditions of the potential sale between you as a buyer and the seller, whom the real estate agent represents. Also known as the Offer to Purchase, the documentation should include details like the date of your offer, property description, the price you are willing to pay to purchase the property, and spot cash payment you intend to pay to express your intention to buy the property.


The Letter of Intent is given to the real estate agent or broker to formalize the purchase of the property.


2. Want to put the property you like “on hold”? Ask for a Reservation Agreement

A Reservation Agreement is a document issued by the real estate agent or broker that signals the next stage in the condo buying process -- you are now asking the real estate agent or broker to exclusively put the property “on hold” for you to buy it. The Reservation Agreement will include details you initially expressed in your Letter of Intent plus additional information, including:

  • the property’s complete address, 

  • property type, 

  • property floor area, and 

  • your preferred payment option (spot cash, in-house, bank financing) and payment terms.


Moreover, the Reservation Agreement also signals your agreement to pay the spot cash payment or reservation fee within a contracted period to show your sincerity in your offer. The spot cash downpayment is usually a non-refundable, fixed amount that will be deducted to the property’s total contract price.

If either of you decide to back out from the Reservation Agreement, both of you are legally required to give back what has been given and received.


The Reservation Agreement also signals the fact that you have agreed and will pay the fee or the “earnest money” asked by the seller. The fee, which is typically a fixed, nonrefundable amount, should be paid within a contracted period to show that you are sincere with your offer on the property. The fee would then be deducted against the total contract price.


3. Secure a home loan by providing proof of financial capacity

Facilitate you moving into the next stage of the condo buying process, it is important that you work with the real estate or broker to determine which financial documents would increase your chances of getting property financing.


The following document types will help you get started with securing these documents before applying for a home loan:

  • A completed financing application form

    • The application form will ask you to fill in the information necessary to assess your capability to shoulder responsibility as a long-term borrower.

  • Identification


  • Proof of income

    • These documents should be able to confirm your capability to pay your mortgage. 

    • Documents usually requested as proof of income are your latest Income Tax Return (ITR), company-issued payslips, and Certificate of Employment (COE). In some instances, the lender will ask your employment contract with salary breakdown and even bank statements. 

    • Lenders may ask additional proof of income from self-employed individuals, freelancers, or foreigners with a Filipino spouse. This is to ensure that they will follow through with the condo buying process.

  • Identification

  • Supplemental documents

    • Real estate buyers who will co-purchase with another individual will need to provide additional documentation to establish relationship and financial capability.

    • Real estate buyers who will be purchasing a condo through a representative will also need to provide a Special Power of Attorney document.


3. Get a Letter of Guarantee from the lender once financing is approved

In most cases, the lender will directly coordinate and provide the Letter of Guarantee to the real estate agent or broker to let them know financing is approved. This document is important as it lets the real estate agent or broker know that they finance a percentage of the total contract price, even if in the case that you default on your payments. The document will include what is the agreed loanable amount, which can be up to 90% of the total contract price, when and how the loanable amount is issued.


4. Review the Contract to Sell before signing.

A Contract to Sell, which will be issued by seller represented by the real estate agent or broker, is a detailed-oriented contract about your property purchase. The document contains the sales provisions both you and the seller needed to comply with before the purchase is fully paid. It will also include terms and conditions that might render the contract null and void, and what are the resolutions prescribed should any of you decide to terminate the condo buying journey. 


When all of the conditions are met, the next document (Deed of Absolute Sale) will be issued based on the signed Contract to Sell.


5. Secure and file the Deed of Absolute Sale with the Registry of Deeds.

This document essentially indicates that the seller is transferring physical ownership of the property to you through the sale. This is issued after you have complied with the terms and conditions of the Contract to Sell. Filing this document with the Registry of Deeds helps you formalize the sale and secure the next, albeit very important document as legal proof of ownership.


6. Secure your Condominium Certificate of Title (CCT)

Finally, the property is now legally yours! The Registry of Deeds will issue one copy for you and another one to be kept at the agency for future references.

 

7. File a Tax Declaration

Head to the City Assessor’s office and request a Tax Declaration form. This document essentially signals the Bureau of Internal Revenue that they will leverage all tax obligations to you. In order to process the Tax Declaration, you need to secure a photo of your condo unit and your CCT.


Still need help with buying a condo in the Philippines? Start your search with us at www.signetproperties.ph