Contract “to Sell” vs. Contract “of Sale”

Posted by: Nimrod Flores in Real Estate Documentation, Real Estate Laws On:February 24, 2016 Last updated: April 1, 2018

How is a “Contract to Sell” different from a “Contract of Sale”? Such a small variation in the words, but such a huge difference in meaning and effect.

To the sharp observer, the difference is easy to see. But to the layman, it may not be easy to spot. It can be as confusing as the zonkey above (it’s both a zebra and a donkey). In fact, a lot of people really confuse these two. They even use it interchangeably, thinking they are the same. Let’s try to clarify that here.

Contract to Sell

A Contract to Sell is an agreement between a buyer and a seller whereby the seller promises to sell something to the buyer and the buyer promises to buy it. But generally, in this kind of contract, the ownership of the subject “thing” is not transferred to the buyer upon the signing of the contract. There are usually conditions to be complied with by one or both of the parties. And the transfer of ownership will only happen when those conditions are met.

In real estate transactions, it is quite common for developers or individual sellers to enter into a Contract to Sell with a buyer. In cases like this, the agreement contained in the contract basically goes like this:
- The seller/developer promises to build the house or condominium building.
- The seller/developer promises to sell the house or the subject condominium unit to the buyer.
- The buyer promises to buy the house or condominium unit. This can be in installments or in full cash, or in any other arrangement.
- The ownership of the subject property will only be transferred to the buyer when the house or condominium unit is completely built AND when the buyer has fully paid its price.
In the above scenario, the conditions are the completion of the building by the developer and the full payment by the buyer.
Contract of Sale

A Contract of Sale is an agreement between a buyer and a seller whereby the seller agrees to give or deliver something to the buyer for a certain price which the buyer agrees to pay. In contracts like this, when the buyer pays and the seller delivers, the transfer of ownership is also done at the same time.

This is usually not applicable to situations where the seller is not yet ready to deliver the thing being sold. Nor is it applicable where the buyer is not yet ready to pay the price in full.

However, even if the buyer cannot pay in full right away, both parties may still agree on the transfer of ownership to the buyer. This is, provided that the seller can readily deliver what he is selling. And subject to what we call a “resolutory condition” that when the buyer fails with his payment(s), the seller will take back the thing sold.

In real estate transactions, this type of contract is usually executed only when the property is ready to be turned over and if the buyer is ready to pay the price in full.

The Main Difference

The most significant thing to remember is the effect of each of these two contracts.

Generally, in a Contract to Sell, the ownership is not transferred to the buyer upon the execution of the contract. In a Contract of Sale, the ownership is transferred to the buyer right upon its execution.

Why is it important to know this?

Nobody likes reading very long fine prints. While it is still best to really read them before signing, you can just look at the heading or title of the document and immediately see what you’re getting into.

A lot of people (buyers) think that when they sign a contract in a real estate transaction, they already own the property even when they haven’t completed the full payment yet. That’s why some people even demand that the title of the property be transferred to them already.

Well, they practically own the property already. But don’t necessarily own it legally. Not always, since it depends on the actual agreement they signed.

Thinking of buying a property in the Philippines?

Make sure you do it right. Work only with brokers who are reliable and who really know what they are doing. See how we can help you today:

Check out our services →

ABOUT THE AUTHOR

Nimrod Flores

Nimrod is the co-founder of PPE Inc. and our Tech Officer. His experience in real estate started when he bought a tax-delinquent property auctioned by the government back in 2007. He’s currently studying law at the San Beda College of Law.

FK

Very informative blog..Thanks at least, I know now what’s the difference between the two…
Norm De Asis

If I fully paid the condominium and the developer hasn’t completed/delayed the turn-over of the unit, can you sue the developer for financial loss?
- Nimrod Flores
  
  It depends on the provisions of your contract. Balikan nyo muna yung contract nyo po.
  
  But in any case, when the HLURB grants developers their License to Sell (LTS), they are also given a deadline on when they are supposed to complete the project. You can go to HLURB and ask for the LTS of the developer for that project where you have your unit. Na sa LTS nila naka-indicate yung deadline na yun. Or you can just call the HLURB and ask directly for this deadline.
  
  And if lumagpas na nga sila sa deadline nila, you can file a verified complaint with the HLURB, and probably demand for a return of your money.
Gerald Gomez

If buyer and seller agree and enter into a “contract to sell”, and the seller later doesnt wants to pursue the selling. What are the rights remain with the buyer??
- Nimrod Flores
  
  Situations like that are usually covered by the terms of the contract to sell. Kung ano yung nakasaad sa kontrata nyo in case mangyari ang ganyan, yung ang susundin.
  
  As an example, one contract-to-sell I’ve prepared before, stipulated that in case any of the parties cannot proceed with the contract, then he will be liable to return what he has already received from the other, plus a fixed, specific amount that will serve as liquidated damages for breaching the contract.
  
  Pero even if your CTS doesn’t include a stipulation like this, the provisions of the Civil Code will apply. It’s basically the same thing – yung party na gustong mag-backout from the agreement, will be liable to return what he already received. And the other party has the right to demand payment of interest (and damages, if applicable).
teokun

same question as Gerald. Paanu kung tinakbo ng Seller yung downpayment? and not sell/ release an Deed of Absolute Sale.
- Nimrod Flores
  
  Then you can file a criminal case against the seller. That’s fraud.
Mega Star

Good thing i found out this site its very informative educational as well. Since you started to discussed the difference between Contract To sell and Contract of Sale, can you further, if you may to discuss also the difference between Deed of Conditional Sale and Deed of Absolute Sale? thank you and more power….
- Nimrod Flores
  
  Thanks. This will be discussed in detail in our coming posts.
  - Mega Star
    
    @Sir Nimrod, is there an exemption in paying CGT for a corporation when the proceed of the sale will be used to buy another property something like that….. Hope my question is not confusing.
    - Nimrod Flores
      
      For corporations, no. CGT is still applicable even in that case.
      
      That exemption you described is only available to natural persons, if the property sold is their family home and the proceeds are used to buy another family home as well.
  - Mega Star
    
    If the corporation is engaged in real estate does a corporation need to be register at HLURB?
    - Nimrod Flores
      
      If they are selling real estate as a regular part of their business, yes. This includes developers and brokerage companies. But if they are selling only once, like kung ibebenta lang nila yung property that they own, then they are not required to register with HLURB.
      
      Other types of corporations that need to register with HLURB are homeowners associations.
Tweet Tweet

Good am, Nag apply po ako ng Pag ibig Housing Loan, ngayon po ay nag process na ako Title transfer under my name, may annotation sa title po pwede po ba na ako nlng magpa cancel ng annotation o ang seller talaga
- Mega Star
  
  @Tweet pwede mo nman ikaw na rin mismo ang magprocess to cancel ng annotation sa title as long as complete ang document na hawak mo na dadalhin sa Registry of Deeds. Pero kung ang nakalagay na annotation sa title ay MORTGAGE ikakansel lang yan as cancellation of mortgage di yan buburahin ng Registry of Deeds pero kung ang nakalagay SA title “ENCUMBRANCES” yan ay pwede e-erased ng Registry of Deeds. I’m giving u an advice based on my hands-on experienced.
  - Tweet Tweet
    
    ano po ba ang requirements sa pagpa cancel ng annotation sa title?
    - Mega Star
      
      Original copy of Title
      Original copy of Tax Declaration
      Duly signed and notarized by both parties Deed of Absolute Sale
      Updated 2017 Real Property Tax fully paid
      Tax Clearance from Assessors Office
      BIR payments of Capital and Documentary Stamp Tax
      Transfer Tax from City Hall
      then mag request ka ng document for the cancellation of annotation coming from seller or kung nasa bank yan mag request ka sa kanila
      - Tweet Tweet
        
        ah ok po. regarding nman po sa payment CGT and DST.. bali yung bibilhin ko po na property is bank acquired properties thru pag ibig housing loan, so I was required by bank to pay 50% of the selling price, tapos yung letter of guarantee from pag ibig para sa execution ng deed of sale.. babayaran ko ba ang 6% na CGT ng selling price, hindi pa nman ako nkapag full pay..
      - Tweet Tweet
        
        yung selling price nila is 500,000, I paid already 250k den the settlememt of the bal is upon the release of my pag ibig loan.. mag kano po CGT ang babayaran ko? may rules po ba dito? to lower the computation of the CGT and DST?
      - Tweet Tweet
        
        ng execute na po kasi kami ng deed of sale pg receive ng bank sa downpayment and letter of guarantee from pag ibig para mai transfer ko yung title under my name at para ma process na yung pag ibig loan ko at mabayaran ang bank sa balance ko. yun po kasi ang agreement namin bank
      - Tweet Tweet
        
        kahit 50% lng yung nbayaran ko? yung gross selling pa rin ang basehan? even if the execution of the deed of sale is only for the compliance for the title transfer…
      - Mega Star
        
        yes po
      - Tweet Tweet
        
        thank you po
      - Mega Star
        
        your very much welcome
      - Mega Star
        
        ang computation ng Taxes is based on the selling price or whichever is higher…. ang capital gain tax ay nasa 5% at yung DST mo which is 500K nasa 1.5%.. There’s no such rules as to lower per BIR is concerned for the payment of CGT and DST
      - Mega Star
        
        for correction pla 6% yung capital gain tax
      - Mega Star
        
        Exactly! Di ka pa talaga makakapag bayad ng CGT and DST mo kasi kailangan fully paid mo muna then after that yung execution na ng Deed of Absolute sale…. take note na kapag na notarized na yung deed of absolute sale nyo u will require within 30 days upon notarization ng document to pay the DST and CGT, bago mo ipa-notaize and document pa assist ka muna ng payment ng taxes mo sa BIR now if you already have the money to pay the corresponding taxes then go ahead……
      - Mega Star
        
        yung sagot ko po sayo dito ito po yung transaction na di involve yung bank, since ang magbabayad pla ng balance ay pag-ibig fund pwede na mabayaran yung CGT at DST mo it is between the bank and pag ibig fund pla yung transaction
AllancessCaszy Bautista

hi question po…gusto kong ibenta yung nakuha kong condo pero naka-under pa din ako ng bank loan payable in 10 years. Yung buyer sabi sya na lang magtutuloy ng loan ko sa bank pero nakaunder pa din sa name ko kasi masyadong madaming papers ang dapat gawin if itransfer ko agad sa name nya yung loan. Anu po kaya ang magandang gawin ko na legal paper para dito Contract to Sell po ba? Just in case po ba na biglang di na tumupad si buyer na contract like example di sya naghulog dun sa bank loan forfeited po ba yung mga binayad nya or biglang binenta nya sa iba un condo without my knowledge? thanks po..hoping for a reply..
- Mega Star
  
  @@allancesscaszybautista:disqus ang suggestion ko dyan i-bank loan nalang ng buyer mo yung condo unit mo para yung proceed ng loan ay gagamitin pang fully paid nya sau. In this case free ka na sautang mo sa bank at wala ka nang iisipin pa na problema in the near future kasi nailipat na yung ownership ng condo dun sa buyer mo kung magkaproblema man sya sa pagbabayad atleast wala ka nang sagutin dun. Ganun talaga madaming papers ang pag transfer ng condo title pero ang advantage naman nito eh magkakaroon ka na ng peace of mind na free ka na sa liability. yun lang at sana nakatulong ako sau.
Ceidre Erienne

If I enter into a contract to sell for a piece of land and have that contract notarized, would I be liable to pay CGT and DST agad within 30 days upon notarization ng contract to sell? I am the buyer and I will be paying in installments within a 5-year period. And our agreement is that ako ang magbabayad ng CGT and DST pati notarization fees na kakailanganin sa pag-transfer ng property sa akin later on. Or would I just be paying CGT and DST kapag gumawa na kami ng deed of absolute sale?
- Mega Star
  
  @@ceidreerienne:disqus in my experienced ok lang kahit ipa-notarized nyo yung contract to sell, ang hihingin nman sau ng BIR kapag magbabayad ka ng CGT and DST ay yung Deed of Absolute Sale na duly notarized please take note na kapag na notarized na yung Deed of Absolute Sale kailangan within 30 days dapat bayaran mo na yun to avoid penalty and other charges.
  - Ceidre Erienne
    
    Ah okay, salamat po! So doon pa po sa deed of absolute sale ako magiging liable to pay CGT and DST (which is about 5 years from now), tama po ba? Kapag notarized contract to sell pa lang, wala pa po akong magiging tax liability? And how much po kaya ang hinihingi ng lawyer kapag pa-notaryo lang ng contract to sell, magbe-based po ba yun sa contract price?
    - Mega Star
      
      Yes wala kang tax liability kapag ang document mo ay di pa notarized…..Mas maganda nga wag nyo muna ipa-notaryo yung contract to sell if ok to both parties para mas safe kumbaga internal agreement nyo nalang po yun. Yung pagnonotarized ng contract to sell depende po yan sa discretion ng lawyer kung mag aask sya sau ng mataas na fee, minimal lang nman ang bayad dyan kung may kakilala ka na lawyer mas maganda mas makakatipid ka pa.
Carla

How many days a seller can cancel the contract to sell? I am the seller and I told my buyer that my family changed their minds in selling the property and the buyer refused to cancel? What else can I do? Please help. Thank you
- Nimrod Flores
  
  If you have a stipulation in your contract that you can still cancel within a certain period after you sign it, then you can enforce that.
  
  However, in usual cases, contracts-to-sell don’t have a stipulation like that. And per law, once a contract has been perfected, both parties are bound by it. If your case belongs to the “usual cases”, then you cannot just change your mind without being liable to the other party. The other party already has the right to demand from you the performance of your end of the agreement.
- Perfectionists
  
  Both parties are bound to follow what has been agreed..change of mind is not applicable in the agreement
Tasire Oleuref

Hello,
Sana matulungan ninyo po ako sa akong problema sa lupa.May nabili kasi akong lupa almost 16 years ago eh wlang titulo, rights Lang tapos nakalimutan kng ipanotaryo noong nabili ko , ang hawag ko original absolute sale noong 1965 then binili ng anak ng na-awardan 1997 hawak ko rin Yong Deed of absolute sale ng anak then absolute sale between anak at ako.
Hindi ko nababayaran ang taxes mula ng nabili ko. Maaari ko bang bayaran ang taxes ng lupang ito? Magkano kaya ang aabutin ng taxes? Bakante pa rin ang lupa kaya ako nag tatanong tungkol dto kasi plano kng magpatayo ng bahay. Gusto kng malaman ang karapatan ko. Ano ang mga dapat kng gawin?
Sana naipaliwag ko sayo ng mabuti .
Sana matulungan ninyo ako .
- Mega Star
  
  @tasireoleuref:disqus sa province po ba ninyo nabili yung lupa or govt owned property na inaward lang sa pinagbilhan ninyo? Una i-check nyo po sa assessor’s office ng cityhall or munisipyo kung saan sakop yung lupa dalhin ninyo kung ano meron kayo document dyan to support na kayo na nga ang nakabili ng lupa para ma-assist kayo sa payment ng inyong real estate tax sa lupa. Then dun naman po sa titulo ng lupa na sabi mo wala kang kopya, kung nakalagay sa deed of absolute sale yung TCT No. ng lupa pwede po kayo makakuha ng certified true copy nyan sa Registry of Deeds kung saan naka registered yung lupa. Ganun lang po ang gagawin ninyo.
  - Rodolfo Oladive
    
    Gud pm! Ittanong q lng po kumuha po aq ng lots kya lng po ang nangyari 1 lot lng naituloy q ang 3 lots for cancellation n po klangan q po bng byran ang interest per lots un po kz ang sbi ng developer q
    - Mega Star
      
      @rodolfo ano po bang type of document ang pina-sign sa inyo ng developer if any?
Lorena

Hi Nimrod, we signed a reservation agreement and paid the reservation fee of 30k last 18 September 2017 with Monville (developer, not the complete name). It took them ages and took a lot of emails, phone calls and text messeges from us asking for the TCT, tax certificate and contract to sell. Ngayon lang namin nareceive yong copies of the three documents mentioned above. Upon reading the Contract to Sell, we realized na most of the provisions are assuming that the buyer is paying the purchase price by installment and the deed of absolute sale will then be executed after signing the Contract to Sell. We are cash buyers so I was wondering if we are entitled to ask for a copy of deed of absolute sale for us to peruse and we feel that deed of absolute sale should be the document appropriate to be used in our case…
- Mega Star
  
  @disqus_6nrXj44aXt:disqus, gusto ko sana kita sagutin dyan sa tanong mo kaso naka address kay Sir Nimrod yung question mo. Ang isasagot ko lang sana sau ay based on my work experienced sa isang real estate company so i guess Mr. Nimrod is the right person to ask regarding to your concern. have a nice day!
  - Lorena
    
    @Mega Star, pakisagot naman please. I only addressed my question to Mr Nimrod kasi siya ang author ng article but please shed some light for people like me na hindi masyadong familiar sa procedures in buying a house here in Phils. Thanks in advance Mega Star…
    - Mega Star
      
      @disqus_6nrXj44aXt:disqus, Yung Contract to Sell ini-execute lang yang ng developer kapag ang agreement nyong dalawa sa pagbili ng property ay installment basis. In case, na fully paid na kayo dun sa property na binili nyo sa developer automatically dapat mag execute na ang developer ng Deed of Absolute Sale between and the developer at di na dapat pa kayo pahihirapan pa mag ask nun sa kanila kasi obligation na nila yun sa inyo na gawin yun. yun ang dapat.
      - Lorena
        
        Thank you Mega Star, I think it’s best to cancel the agreement and ask for a refund kasi bakit CTS ang binibigay sa amin eh cash buyers kami 🙁
      - Mega Star
        
        @disqus_6nrXj44aXt:disqus question lang po Ma’am why to cancel the agreement? Meron po bang naka stipulate dun sa agreement between you and the developer na di nasunod? Ok lang nman po magkaroon ng agreement to both parties as long as in good terms nman po yung nakalagay sa agreement. Cash on the spot nyo po ba nabili yung property?
      - Lorena
        
        Kasi they don’t communicate very well and it’s odd na contract to sell was provided to us instead of deed of absolute sale, we are cash buyers. And Clause 2 of reservation agreement stipulates an annexure of CTS which was not annexed and that’s not even the appropriate document for us. Diba parang kakaiba? Hindi sila transparent.
      - Nimrod Flores
        
        This is very likely to be just a mistake ng documentations staff nila. Kung ito lang talaga ang problem, it might not be that big of a deal. It just tells you that they probably don’t pay that much attention to the details.
        
        In most cases kasi, ganyan yung buying process with developers – starts with a CTS kasi installment ang payment. Naka-template na kasi yang mga contracts nila and processes. So it could be na sumunod lang yung staff nila with their company procedure. But it doesn’t have to be that way, you can just ask them if you can skip the CTS and go straight to the DOAS. If they refuse without providing a reason that makes sense to you, then that’s another red flag.
        
        As to the duration ng preparation nila ng CTS nyo, it’s not unusual for developers to take up to 30 days from the reservation. (at least with the big developers, for smaller ones, I’d expect them to be a little faster.) Siguro yung mali ng agent na naghandle sa inyo, is hindi namention yung waiting time. Na-set dapat yung mga expectations in the beginning.
        
        As to your other question – whether you are entitled to ask for a copy of the DOAS, of course. If it’s something you will be legally binding yourself by, then you should be allowed to carefully review it before signing.
      - Lorena
        
        Thank you Nimrod…
      - Lorena
        
        Hi Nimrod,
        If the purchase price is 1,938,060, how much is the transfer tax?
      - Nimrod Flores
        
        @disqus_6nrXj44aXt:disqus, there’s no direct answer to that. There are several factors to consider; We have discussed this in detail on the following post:
        
        The Taxes Involved in a Sale of Real Estate Property
      - Lorena
        
        thanks Nimrod, we have done the computation but we decided to engage with a lawyer, thanks for all your help
    - Mega Star
      
      @disqus_6nrXj44aXt:disqus yung transfer tax fee depende kasi yan sa Contract Price usually ang computation nila dyan whichever is higher may mga bracket sila na basis for computing that, mas maganda nga kung kayo na mismo directly magbayad ng transfer tax pra personally alam nyo kaysa ipasa nyo pa sa iba. ang importante dapat lahat ng payment mo ng mga taxes with corresponding receipts dapat.
      - Lorena
        
        thank you we will consider this
Philip

Question (answer in English please)… I am buying a lot under a Contract to Sell. I am paying monthly with a balloon payment due in September 2018. Full price is P15m, comprising instalments of P3m + P12m balloon.
The agent says that if I sell this Cotract to Sell on to a third party, I have to pay CGT on the full original selling price of P15m. This makes no sense to me since I do not yet own the lot and I will not be selling on at the full price. I will only be selling the Contract on at about P3m.
Can you advise if the agent is correct?
- Nimrod Flores
  
  You’re right, it doesn’t make sense.
  
  The CGT only applies in actual sale transactions. A contract to sell is only an agreement to sell. It’s not the actual sale yet (of the property). Besides, you will only have to pay CGT when you have to process the transfer of Title already, which can only happen when the actual sale (of the property) has been completed. And when you’re at that point already, the only payee that you’ll have to address your CGT payment to, is the BIR.
  
  In the case you described, the only sale that will happen is the sale of your right on that contract to sell. You’re not selling the property that is the object of that contract.
  - Philip
    
    Hi Nimrod, thank you for your reply.
    Your answer does make sense 🙂
    - Charlene Sumugat
      
      This addressed my question above. I asked my agent and she said I need to pay CGT plus agent’s fee and processing fee kapag gusto ko daw itransfer yung CTS to my father’s name. I doubted her since I know technically I do not own the property at all.
      This case po usually what will be the possible charges?
      My agent gave me this breakdown:
      6% capital gains
      1.5% docs fee
      5% agent fee
Jeramie Gonzales

@mega_star:disqus Would like to ask why do BIR still requesting us to present Contract to Sell, if we already undergone COAS, which is already duly notarized.
- Mega Star
  
  @jeramiegonzales:disqus are you referring to DOAS po ba and transferring of the property to your name? In some cases and it depends the BIR officer in-charge yes they might ask you to present the Contract to Sell for verification if there is some changes of the contract price of the property.
- Mega Star
  
  @jeramiegonzales:disqus basically BIR just want to know if the previous contract to sell and Deed of Absolute Sale has the same contract price. They just want to make it sure that there is no hidden agreement between you and the seller in terms of the selling price of the property per see. By the way your using COAS is that referring to DOAS instead?
Nimfa

Question: Contract to sell is under both husband and wife’s name, binabayaran pa lang and condo as of this time, hindi pa naturn over. However, husband died and I am requesting that his name be not included in the deed of sale kapag iturn over na. Kaso po humihingi pa ng “copies of legal documents/judicial judgments or orders of the estate of the deceased processed under national law or law of residence of the deceased, duly authenticated by the Phil embassy and original/certified true copy of the petition for the recognition of foreign judgment and original/certified copy of final judgment of Phil court recognizing the foreign judgment”. Wala pong estate ang namatay, wala ring will. Ang namatay ay US citizen pero ang asawa ay dual citizen naman. Is there a way na masolve ito without hiring lawyers and paying lawyers fees?Napaka mahal at malaking gastos po kasi. Robinsons land po ang developer. Salamat. Your inputs will really be appreciated.
- Shai
  
  Hi Ms. Nimfa, have you started the processing? We have the same case, my mom passed away before turn-over. We have to undergo the regular way of processing the title transfer. When I consulted a lawyer, the estimated fee is around 20% of the estate including out-of-pocket expenses. I am not sure what is a typical lawyer’s fee in handling the estate transfer. There are ways to solving the issue without hiring a lawyer, it only needs extra time and effort. Would you like to discuss this over the phone? What is the best way to contact you?
Orravan05

Hi ask ko lang po I’m a buyer and planning to buy a town house 2nd hand. May Improvement na siya sa house and maayos naman, though ang concern is nakaloan pa siya sa pagibig. 8 years out of total 30 years payment na ang nababayad nya though as of this time may mga lapse payments na siya sa house. They are planning to sell the property to me at 2.7M, down payment is 400K and balance thru Pagibig loan. Problem is I have already made a reservation fee of 50K and we have signed a contract to sell. Ngayon, I have doubts if I’ll still be able to continue with the purchase since with the advise of a friend (who happens a CPA with experience on real estates) malaki talaga ang icacash out ko having the total 400K as DP, then yung mga transfer tax (with the stipulation that CGT is to be assume by seller but will pay by buyer first and will deduct the payment on the contract price) and yung loanable amount sa pagibig (although wala pang assessed amount, he states that normally di talaga nakakaloan ng more than the selling price and any difference sa purchase price less DP less CGT and loanable amount would be paid immediately. Baka kasi di namin kayanin yung cash out. Advise po sana if I’ll cancel it with contract to sell already signed but not notarized ok lang un? wala po bang magiging problem? Thanks for the advise po.
- Mega Star
  
  @Orravan05:disqus the way i see’s it, medyo masalimoot itong transaction. on the contrary may point yung frend mong accountant. Dun sa reservation fee and Contract to Sell that’s a normal documentation when you are buying the property, if u wish to terminate or cancel the contract that’s is your RIGHTS your not liable for that. wala naman siguro nakalagay sa contract to sell na na pinirmahan mo na if ever gusto mo na mag back out or cancel the sale ay may legal na mananagutan ka. Ang alam ko lang dyan based on my experienced forfieted lang yung binigay mong reservation pero depende pa rin yun sa developer. sana nakatulong ako kahit paano.
  - Orravan05
    
    Salamat po talaga @Mega Star somehow naliwanagan ako. Wala nman pong stipulation na nakaindicate na if either of the party will cancel the CTS they will be liable. Yun lng kasi yung concern nmin sa ngayon, kung mamamaintain nmin ung total cash out. Additional question lang po, so does this mean na ung 50K reservation totally non refundable na siya? Pde b nmin irequest if ever d nga nmin mkukuha ung RF eh bigyan kami ng time to think if we will go or not? We just need time din kasi to look for other sources kng makakakuha kami additional money for the total cash out, and also as per my assumption un din nman ang essence ng RF, to reserve it and show na committed and interested kmi sa haus. Many thanks po uli
    - Mega Star
      
      @Orravan05:disqus with regards dun sa 50K na reservation mo, ano po ba ang nakalagay sa reservation agreement? May naka “Clause” ba dun na if ever na gusto mo na i-refund yung reservation fee mo na ibinigay mo sa seller automatically it will be forfieted? or half of it is refundable? Just try to ask the seller pra malinaw ang usapan kung pwede ma refund yung 50K.
      - Orravan05
        
        Wala po @Mega_Star eh, ung 50K reservation nkalagay lang ay received partial payment as reservation fee. Gumawa lng din cya ng Acknowledgement Receipt any specifics walang nkaindicate po.
      - Mega Star
        
        @Orravan05:disqus in that case make a request letter to seller na gusto mo na bawiin yung reservation fee kasi you no longer interested to push through the sale pero indicate mo sa sulat yung reason why you backing out para valid nman yung reason.
      - Orravan05
        
        @Mega_Star salamat po tlga will do consider your advise po. More power and God bless..
      - Mega Star
        
        @Orravan05:disqus your welcome!
Pinky

Hi pag ang contract to sell ba pag d napanotaryo tapos yong seller d tumupad kung ano nakasaad sa contract to sell my laban ba yong buyer?anong pwdng gAwin nang buyer?
- Nimrod Flores
  
  May laban pa naman.. As to what the buyer can do, it would involve filing a case in court or in HLURB (kung ang seller ay developer). You have the option to demand for specific performance or for the recovery of your money and payment of damages.
  - Pinky
    
    Thank you nimrod flores
    - Pinky
      
      Need ko din nang advice mas ok ba na i diritso ko na yong bayad sa may ari or idadaan sa ante ko nasa abroad kac ako diko alam kung saan mas safe..
Donna Estrella

Hi Sana po may makatulong sakin… Bale may bibilhin po sana akong lupa, Kaso “nakapangalan” sa iba kasi yung taong yon ang nagbayad ng reservation. Kaso since hindi na niya mabayaran, ako na lang ang sasalo. Ngayon, yung Contract to Sell po hindi pa naman nagagawa or naisusulat kasi hindi siya nakabayad ng 6 months installment. Pero since ako isang bagsakan na magbabayad for 8 months na in arrears, sakin na ipapangalan yung Contract to Sell. Ngayon, hinihingan ako ng additional na 4,000 pesos para daw ilipat sa pangalan ko yung CTS. Legal po ba yun? Eh wala pa ngang nagagawang CTS, and ang condition lang naman para makuha yung CTS is makabayas ng 6 months worth of installment. Bakit ngayon may 4k ng hinihingi?
- Nimrod Flores
  
  Meron po talagang processing fees yan sila if the buyer in the CTS is to be substituted by another person. But that is, provided that there’s an existing CTS already. Pero sa case po ninyo, anong babaguhin kung wala pa naman palang CTS na nagagawa? Tapos reservation agreement na nga lang meron sila, nakapangalan pa sa iba? 😀
  
  Para iwas sakit ng ulo, mas maganda po dun nyo na bilhin yan directly sa developer.
Michelle Vinuya Delos Santos

Hi! Magtatanong po. Ano po kailangan ko sa broker upon signing contract to sell if wala po sa piliinas ung owner ng property?
Lyn

Hi! Hope you can help me. My question is may kinuha po kasi akong installment na lot – when I was fresh from college and had started to earn. Bale napansin ko po yung contract na sell, wrong address so nagrequest ako ng new contract to sell with the correct address. The problem is hindi ko na naibalik sa developer yung CTS but I have been continuously paying naman for 3 years now. Magkakaproblema po ba ako once na fully paid ko na yung lot? Or magkakaproblema rin po ba ako kasi late na yung contract to sell? Appreciate your help.
Charlene Sumugat

Hi, I purchased a condo po and I already notarised the CTS but I eventually wanna tranfer it sa father ko habang CTS pa lang. Applicable ba yung capital gain tax dun? And usually how much ung processing po?
Yolanda Carlos

Hello Mr. Flores,

I find your website very informative and hoping I could get your opinion for my situation. I am currently making payments for a condominium that is in pre-selling stage. After 9 months of paying the seller finally sent me the contract to buy and sell (CTBS). In the CTBS there is a clause that the seller may, at its option, require buyer to procure a life insurance covering the unpaid amount of the property. Also, the seller shall be designated as the irrevocable beneficiary under the life insurance policy. Is this normal in a contract to buy and sell to have a life insurance policy?

Thank you and I would very much appreciate your opinion.

Yolanda
Parvienne Viceral

Hello Sir,
San po kaya pede magpagawa ng contract to sell dito sa mandaluyong? Magkano po kaya usually ang magpagawa ng ganun?

Thank you po in advance.
Beng Delumen

Hi.. Thank you po Sir Nimrod Flores sa very helpful post na ito..
My boyfriend and I just recently started paying for a pre-sell condo.. bale ang binigay po nila samen is CTS and deed of sale. we already signed and is continuously paying the monthly amortization.. would just like to confirm na para sa mga pre-sell condos.. CTS lang po talaga ang hawak ni buyer up to the time na maturn over ang unit sakanila tama po ba? my reason for asking this is to make sure na I am not missing any required document. First time buyer po ako.. thank you in advance po sa sagot nyo. 🙂
sheila singapore

Hello atty Nimrod naway mapansin mu message ko.. kse meron aku installment n bhay sa cvite yung may ari nsa US nagbayad me ng Downpayment sa knya 550 k nagrelease n sya ng co tract to sell n SPa mula sa knya pra mging representative nya kptid nya. So nagpirmhan muna CTS at notaryo n pirma ng kptid nya. So ito po issue nklgy kontrata nmin sa CTS after ng Pgbigag ku DP sa knya next month start n me mgmonthly sa knya ng 50,300 last nov 3 2016 then until now March 3. Ang price ng house 2,059,000 pesos total. So i compute so mga nsa 650k plus n lng balance ku then i call the seller kse nsa pinas sya now n bka pde ku n byran kabuuan n balanse pra mtpos n at kung sakali mabigyan me discount pra ma cover byad capital gains at byrin pa n tax kse sken shoulder yun although wla sa kontrata me shoulder nag agree n kmi nun noon p bgo mgbyad aku ng DP. So 650k plus n lng balance ku e ang compute nya sken e nsa 767k pa atty!! Ang compute nya ang lki ng sobra sinsbi nya balance ku e compute ku ay 550kDp+17months na monthly ku 50,300=855,100 total amount ku nabayran na ay 1,405,100 so balance ku ay nsa 650k n lng anu sinsbi nya 767k dw kse yun verbal n interes n calculation nya bgo kmi mgpirmahn sbi ku te sumunod tyo sa contract to sell te verbal ntin nun 1.9 M lng pero dhil gusto u may i terest pumyag me umabot 2,059.000 million which yan sa kontrata . Kse lumalabas sa kwenta nya kung 767k p balamce ku e 2,177,000 ang value bhay nya n gusto nya singilin. Sken e ang kontrata nmin ay 2,050,000 million lng. Malinins me magbyad atty never me nagfaield byrin tpos ito bbyran ku n balnse ko si seller dinadagdag. Kwenta nya. Anu po dpt ku gwin kung d sya sa tumutupad sa contrct to sell nmin nkasaad wgich is notary ang CTs n stress me seller nsa US na ituring prang daig p wlang pera at msydo magulang sa pera. Mahaba message ku atty pero naway mapansin mu! God bless atty hope give me some advice pls thank u atty nimrod!!💕❤️
Professor Xavier

Good evening po sir Nimrod. (and anyone who want to share their experience and expertise/knowledge.

I am into filing a DEED of SALE with ASSUMPTION OF MORTGAGE for my buyer. I have few questions po;

1st, required po ba na inform si bank (mortgagee) about the selling? Wala po ba akong maba-violate?
Ang agreement kase namin ng buyer is to finish na lang the amortization and then transfer the title under their name after the Bank released, para hindi na magiging third party si bank, possible po ba yun?

2nd, Kung sakaling involved naman si Bank and they will be informed about the selling, is it possible na name na ng new owner ang mag-appear sa Title? Kase mahal ang expenses and fees sa transfer processing di po ba?

Thank you and God bless po.
Chris Cruz

Hi atty, ask ko lang impact ng train law on my Contract of Sale. i bought a house and lot with Contract price of P3.199M. Since bumaba yung VAT excemption from P3.2M to P2.5M. developer is asking me to shoulder the additional VAT.
1. Hindi po ba prospective ang application ng Train Law. Contract of Sale was signed 2017 pa. And I already paid 20%DP as of Feb2017. Why is the developer now asking for VAT.
Obel

Hi Nimrod, May binili po akong condominium unit sa Zitan Project na inisyuhan ko po ng post dated cheques. Several cheques na po ang nag-clear for my installments pero di pa sila nagbibigay ng Contract To Sell. May nilalabag po ba silang batas sa hindi pag-iissue ng Contract to Sell gayung several installments na ang nabayaran ko sa kanila?
Jessa Nova

Hi po, I am paying down payment or equity na po for duplex house here in Ceb and I was asked to signed a Contract to sell from the developer. I would like to ask if after equity which would be next yr around april 2019 na po pwede mag move in. would the unit be under my name legally or after fully paid thru bank pa like 25 yrs?
Desiree

How much po pagawa ng contract to sell? im buying house and lot worth 440k?Thanks po
Bridge Dale

Ah, this distinction between the contract to sell and the contract of sale is quite refreshing to read. The content here will help me in my paper, Nimrod. I want to ask you if you have more details on this distinction?
Jean Nacpil Franco-Ilagan

Hi Po Atty Nimrod,

Yung Contract to Sell po ba, pwede po bang ang nakalagay lang na Amount is yung na Cash Out lang po ng Seller, hindi na muna sinama ung loan balance pa sa PAGIBIG? Kasi po ganun ung situation ko po, Ako po yung Seller, intended ko lang po, nilagay na Amount is na Cash Out lang po. Pero nung nag usap po kami nung Buyer, binanggit ko po sa kanya ung loan balance pa sa PagIbig. Ngayon po, nung nagkapirmahan na po kami, nagrereklamo po sya na wala po akong sinabing meron pang loan balance. Ayaw po nila, ang sabi ko po Kung Di po magkakausndo, ka cancel ko n a lang po ung CTS I babalik ko sa kanila ung DP nila, pero ang balik naman po sa kin, bayaran ko daw ung napagawa nila sa bahay ko. Eh gentlemans agreement na po Yun nung nagpaalam sila sa kin na magpapagawa na sila sa bahay, pumayag ako ng walang Kasulatan nun, pero nilibaw ko po na if in case di matuloy, hindi na po nila mababawi yung magastos nila sa pag pagawa sa bahay.
Ano po ang dapat gawin, ang sabi po nila mag harap daw kami sa abogado. Makakasuhan po ba ako dun? Eh nung una nag nagkaintindihan na po kami, tapos ngayon Di daw nila naiintindihan ung nasa CTS. Need your enlightenment po dito. Tha k u po.