Buying a house or condo can be overwhelming. The process involves preparing and signing numerous documents. Understanding these documents will guide you through each step, making the journey smoother. Here’s a breakdown of key real estate documents and their importance.
1. Letter of Intent (LOI)
A Letter of Intent (LOI) is often used for pre-selling subdivision and condominium projects. It shows your intention to buy but doesn’t involve any money yet. The LOI helps you get on a priority list for potential buyers. If the developer accepts your LOI, you can purchase your desired unit when the project is officially available or has a License to Sell (LTS). When buying a house or condo unit, always consider the developer's track record.
2. Offer to Buy
An Offer to Buy is similar to the LOI but includes specific details like the price and terms. Once the seller accepts it, it becomes a binding legal document. This offer is more detailed and is commonly used in brokerage transactions but can also be used with developers. Negotiating on aspects like price or terms can often lead to better deals, so don’t hesitate to make your offer.
3. Buyer’s Information Sheet (BIS)
Most developers, including Pag-Ibig Fund, require you to complete a Buyer’s Information Sheet. This form collects important details such as your identity, address, income sources, and credit information. It helps the developer verify your qualifications as a buyer and is a crucial step in the approval process.
4. Reservation Agreement
After choosing a property, you’ll sign a Reservation Agreement. This document formalizes your reservation and includes details like price and terms. Unlike the LOI, the Reservation Agreement is legally binding. It ensures that the developer holds the property for you and cannot sell it to another buyer. Note that the Reservation Fee is non-refundable but may be transferable in some cases.
5. Contract to Sell
About 30 days after signing the Reservation Agreement, you’ll enter into a Contract to Sell (CTS) with the developer. This document outlines all the terms of the sale and must be notarized. It’s essential to carefully review this contract, including the price, payment terms, and both parties’ obligations. Keeping a secure copy of this document is vital for your records.
6. Letter of Guarantee
When you start paying your equity or down payment, you’ll prepare documents for a home loan. Once approved, the home loan provider issues a Letter of Guarantee. This letter confirms your loan approval and assures the developer that your financing is secured. It provides peace of mind that the purchase is financially backed.
7. Deed of Absolute Sale
Once you’ve completed all payments and the developer has secured the loan proceeds, you’ll sign the Deed of Absolute Sale (DOAS). This document finalizes the transfer of ownership. It’s crucial for registering the property in your name and must be notarized. The DOAS is essential for proving ownership and completing the purchase.
8. Certificate of Title
After paying all transfer taxes, you’ll receive a Certificate Authorizing Registration (CAR) from the BIR. With this, you can process the transfer of ownership to your name. You’ll be issued either a Transfer Certificate of Title (for house-and-lot owners) or a Condominium Certificate of Title (for condo owners). This document officially recognizes you as the property owner.
9. Tax Declaration
Finally, visit the Assessor’s Office to get a new Tax Declaration in your name. This step confirms you as the new owner and taxpayer for the property.
Remember, this guide is for educational purposes. Consult with a lawyer for advice tailored to your specific situation. If you’re buying property in Cebu, contact us for free assistance!
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Email: cebuhousefinder@yahoo.com
For any questions or assistance in finding a residential property in Cebu, don’t hesitate to reach out!
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