Deed of Sale: What You Need to Know

By: Jazzen Del Mundo
deed of sale

Embarking on the journey of property transactions in the Philippines might seem like a process that racks a head off. The complexity is the sweet part since it is tied and governed by legal intricacies and contractual obligations. At the heart of this complex web of real estate dealings is a crucial document known as the deed of sale. This legal instrument serves as a sewing needle orchestrating the seamless transfer of ownership and possession from the seller to the buyer. For instance, buying a condo in Las Pinas is not just a money-give-condo-get process. It is entwined with a legal process. For their peace of mind, investors must know and dig into the ins and outs of the deed of sale, unravel its significance, demystify its components, and be reminded that complying with the laws is crucial when navigating into the waters of real estate.

The essence of a deed of sale lies in its ability to encapsulate the entirety of a property transaction within its clauses. It is a meticulously crafted contract, binding the seller to relinquish ownership and deliver the specified property while obligating the buyer to reciprocate with a predetermined sum or its equivalent. This legal pact, whether absolute or conditional, becomes the cornerstone upon which the rights and responsibilities of both parties are built.

What is the Deed of Sale?

A deed of sale, essentially a contract executed between a seller and a buyer, binds the former to transfer ownership and deliver a specified property, whether it is a house and lot in Cavite, a condo in Las Pinas, or even a motor vehicle. Conversely, the buyer commits to paying a predetermined sum or its equivalent. This legal document can be either absolute or conditional. An absolute deed of sale transfers the title and possession without conditions, except for the agreed price, while a conditional deed of sale comes with specific conditions, such as completing improvements or fulfilling obligations.

Distinguishing Between Deed of Sale and Contract to Sell

The differentiation between a deed of sale and a contract to sell holds huge importance in real estate transactions, as these terms represent distinct legal concepts that can significantly impact the rights and obligations of both buyers and sellers. Given the potential confusion surrounding these terms, it is important to ensure clarity in property dealings.

A contract to sell and a deed of sale are often erroneously interchanged, leading to misconceptions that could have substantial legal ramifications. In essence, a contract to sell involves a commitment from the seller to transfer ownership of the property upon the fulfillment of specific conditions, commonly contingent upon the full payment of the purchase price. Unlike a deed of sale, where the transfer of ownership is immediate upon the signing of the document, a contract to sell dictates that ownership and possession remain with the seller until the predetermined conditions are met.

Digging deeper, a contract to sell serves as a legally binding agreement outlining the terms and conditions of the prospective property transfer. It is essentially a precursor to the actual sale, establishing the groundwork for the transaction. The buyer, in this scenario, gains the equitable interest in the property, signaling a commitment to complete the purchase once the stipulated conditions are satisfied. Until such conditions are fulfilled, the seller retains legal ownership and possession of the property.

On the other hand, a deed of sale signifies the immediate and irrevocable transfer of ownership from the seller to the buyer upon its execution. Unlike the conditional nature of a contract to sell, a deed of sale finalizes the sale transaction, with both parties obligated to fulfill their respective duties as outlined in the document.

Understanding this distinction is vital for both buyers and sellers to navigate the intricacies of property transactions effectively. Failing to discern between a deed of sale and a contract to sell may lead to misunderstandings, legal disputes, and potential financial risks. Consequently, individuals engaged in real estate transactions must exercise diligence in accurately identifying and utilizing the appropriate legal instrument based on the specific nature of the agreement in question. By doing so, they can safeguard their interests and promote a smoother and legally sound transfer of property.

Creating a Deed of Sale: Step-by-Step Guide

Prepare the Document

  1. Utilize a template or a sample deed of sale available online or from a legal professional. Ensure the document includes crucial details such as names, addresses, and marital status of the parties involved, property description, purchase price, mode of payment, date and place of execution, and signatures of all parties and witnesses.

Print Multiple Copies

  1. Print at least 3-5 copies for various stakeholders – the seller, buyer, notary public, and the Register of Deeds. Additional copies may be required for tax payments, bank loans, or insurance claims.


  1. Visit a notary public to have the document notarized. This step is vital to validate and enforce the deed of sale. The notary public will verify identities, check for errors, and affix their seal and signature. Be prepared to pay a notarial fee, which varies based on the notary public and property value.

Do’s and Don’ts

To ensure a seamless property transaction, heed the following tips and warnings:

Title Verification

Before signing the deed of sale, authenticate and validate the property title. Consult the records of the Register of Deeds or engage a professional title searcher. Also, confirm that the property is free from liens, encumbrances, or third-party claims.

Document Verification

Prior to releasing the purchase price, secure necessary documents and clearances from the seller, including tax declarations, real property tax receipts, certificates of non-delinquency, community tax certificates, and homeowners association clearances if i is applicable.

Registration with Register of Deeds

After signing the deed of sale, promptly register it with the Register of Deeds in the respective province or city where the property is situated. This step is essential to transfer the title and protect the buyer’s rights. Be prepared to cover documentary stamp tax, transfer tax, registration fees, and capital gains tax (if applicable).

Motor Vehicle Transactions

If dealing with a motor vehicle, initiate the transfer of registration with the Land Transportation Office (LTO). Submit the deed of sale along with the certificate of registration, official payment receipt, insurance policy, and emission test results.

Final Pointers

In essence, the deed of sale acts as a comprehensive safeguard, providing a framework for an unambiguous transfer of property rights. It encapsulates the mutual understanding and agreement between the involved parties, mitigating potential disputes and uncertainties that may arise in the absence of such a crucial document.

Navigating the complexities of property transactions in the Philippines requires a thorough understanding of the deed of sale. By adhering to the outlined steps and heeding the provided tips, buyers and sellers can safeguard their interests, ensuring a smooth and legally sound transfer of property ownership. In an intricate landscape of legalities, the deed of sale emerges as the linchpin that cements the buyer’s rights and the seller’s obligations, fostering a transparent and secure real estate market.

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