Purchasing real estate FAQ

Real estate purchases are large transactions. What should I do to protect myself?

First, take note if you are buying from a real estate developer or from another private individual.

The concerns are different if you are buying from a developer or from another private individual.

Second, if you are buying from a real estate developer, check if you are buying a unit that is ‘Ready for Occupancy” (RFO) or if you are buying a project that is in the “pre-selling” stage.

I’m considering all options. May I know what I need to check if I’m dealing with a real estate developer?

Check immediately the general reputation of the developer.  Legal contracts and government regulation do not fully protect consumers.  You should do your own (non-legal) research to see if the developer has had problems before.  Check other developments to see if they finished the developments as planned.

What’s the difference between RFO and pre-selling?

In general, RFO refers to a unit (condo or lot, or house & lot) that is completely finished and ready for occupancy.  Pre-selling refers to a project that is still being built.

What should I check when looking at RFO or pre-selling projects?

After doing some general research on the developer’s reputation, check if the project/s you are looking at have been issued license/s to sell.  The list is viewable at the website of the Department of Human Settlements and Urban Development (DHSUD).

If I see that the developer has a good reputation and that there are sufficient permit/s to sell, what else should I do?

If you are buying something that is RFO, ask to see a copy of the title (CCT or TCT) of the specific unit as well as the latest Tax Declaration.  Then, visit the Register of Deeds and local assessor’s office to check if the CCT or TCT copy provided to you is accurate and updated.  The CCT or TCT should be in the name of the the selling entity (the developer or one of its subsidiaries).

In RFO purchases, you are most protected (as a buyer) if the contract signed is a “Deed of Absolute Sale” (DOAS), and not merely a “Contract to Sell” (CTS). However, in pre-selling, you will only be entitled to sign a “Contract to Sell”.

What is the difference with a DOAS and a CTS?

A DOAS is a instrument that transfers ownership from the seller to buyer.  With a DOAS (and proof of tax payment), the RD can transfer the title already. A CTS does not have the same effect.  A CTS may be used to compel the seller to issue a DOAS.

I found an individual seller who is offering some properties, what should I check?

Ask for a copy of the CCT or TCT as well as the latest tax declaration.  Visit the RD to see if the CCT or TCT is accurate and updated.

What am I looking for when I check the CCT or TCT?

First, you want to make sure that the property offered for sale is in the name of the seller.  Second, you want to make sure that there are no liabilities annotated in the title (i.e. mortgage, unpaid taxes).  If the property is mortgaged, and you purchase it, the mortgage follows the property and will only be removed in accordance with the original terms of the mortgage.

It is safer for you (as the buyer) to only buy a ‘clean title’ (no annotations) and in the name of the seller.

The CCT and/or TCT is in the name of the deceased parent/s of the seller. Can I buy it from the seller?

Technically, yes.  However, to protect your interest, it is better to request the seller to transfer the title to his own name before you purchase it.

After buying real estate, what are my responsibilities?

First, be sure to obtain a title in your name as soon as possible.  In some cases, the buyer/s sell to multiple individuals.  In general, the first to register has the best right among other buyers in good faith.

Second, you are required to pay real estate tax annually.  Check with your local assessor’s office for the amount and process of making the payment.