Buying Our First Property

Buying property is stressful and takes a lot of time and research. With the hard earned money that we’ve been saving through our entire life, who would want to take that risk and have it land in the hands of the manloloko?

Since this is our first investment property, our goals in acquiring passive income, me and my husband took awhile to decide if we should go through this type of real estate investment. Part of this learning process is taking advice from our friends and relatives, surfing the internet, attending meetings with real estate gurus. Once we established our ideal location (yes location) and found our deal, we did our homework.

We checked the physical location of the property, ensuring that no one is squatting in the area, and no other structures. We made sure that the sellers are the real owners. If you are buying from an individual property owner, ask for identification papers like passport or driver's license. It is also a good idea to talk to the neighbors or the Barangay Captain to confirm the identity of the sellers. You might as well ask some history, the reasons why such property is up for sale. There was a time when we had to drove by at night just to get acquainted with the location and observed for illegal activities around.

To ensure that the Transfer Certificate of Title is authentic I asked the seller for a photocopy. I went to Register of Deeds to search and requested a stamped Certified True Copy of the Title. In my case, this was in Trece Martirez City, the capital of Cavite.

To confirm that Title is very clean, that the property is not mortgaged, no liens and encumbrances on the property, see the back of the Title with the heading "Encumbrances". This page must be empty if you are told that the title is "clean". But sometimes the space for the technical description of the property on the front page of the title is not enough and the description of the property is continued on the "Encumbrances" page, this should be fine.

Make sure that the land described on the Title is really the land that you are buying. Have it validated at the Register of Deeds or by hiring a private land surveyor or a geodetic engineer. Land titles don't have any street name and number to pin point a property. It is a must to confirm that the actual property you are buying matches the technical description on the Transfer Certificate of Title.

The yearly real estate taxes are paid. Ask for certified true copies of the Tax Declaration and original Tax Receipts to confirm that real estate tax payments are up to date.

Once we agreed on the payment of the property, the payment for the capital gains tax (usually the seller shoulder this), and the agent’s commission (if there is one involved), the owner then prepares the Deed of Sale. Our residence tax certificate or cedula or driver’s license, and tax id number are needed to prepare this document.

The "Deed of Sale" or "Deed of Absolute Sale" is the document showing legal transfer of real estate property ownership. The deed of sale is then taken to the Registry of Deeds to be officially recorded after paying the documentary stamp, transfer tax and registration fees. Always verify from the Registry of Deeds the authenticity of a Transfer Certificate of Title before buying a property. If the seller only has a tax declaration, be extra cautious and check with neighbors, the Barangay captain or anyone in the know in the community to verify the seller/owner's true identity and the property's history. When in doubt and be safe, hold on to this transaction until documents are cleared.