What is Contract to Sell in Philippines?

In the Philippines, a Contract to Sell is a legal document used in real estate transactions. It outlines the agreement between a buyer and a seller regarding the sale of a property. Unlike a Deed of Absolute Sale, which signifies the transfer of ownership upon the full payment of the property, a Contract to Sell establishes the buyer’s commitment to purchase and the seller’s commitment to sell the property under certain terms and conditions.

Here are the key points to understand about a Contract to Sell in the Philippines:

  1. Conditional Agreement: A Contract to Sell is a conditional agreement. It means that the seller agrees to sell the property to the buyer, but ownership of the property will only be transferred when the buyer fulfills certain conditions, usually the full payment of the purchase price.
  2. Payment Terms: The contract specifies the total purchase price of the property and the agreed-upon payment terms. This includes the down payment, installment amounts, interest rates (if applicable), and the schedule for these payments.
  3. Transfer of Ownership: Ownership of the property remains with the seller until the buyer completes the full payment. Once the buyer pays the entire purchase price according to the agreed-upon terms, the seller will then execute a Deed of Absolute Sale, transferring the title and ownership of the property to the buyer.
  4. Default and Remedies: The contract typically includes clauses outlining what happens in case of default by either party. If the buyer fails to make payments as agreed, the seller may have the right to cancel the contract, retain the payments made, and potentially resell the property. If the seller fails to fulfill their obligations, the buyer may have the right to demand specific performance or seek legal remedies.
  5. Legal Requirements: A Contract to Sell must be in writing and notarized to be legally binding. It should include all the essential terms and conditions, including a clear description of the property, the purchase price, payment terms, and the obligations of both parties.
  6. Registration: While it’s not required by law, a Contract to Sell can be registered with the Registry of Deeds. Registering the contract provides additional security to the buyer, as it serves as a notice to the public that the property is subject to an existing agreement.

It’s important for both parties involved in a real estate transaction to understand the terms of the Contract to Sell thoroughly. If there is any uncertainty or if either party is not familiar with the legal aspects, consulting with a real estate lawyer is advisable to ensure that the contract protects the interests of both the buyer and the seller.

Example of Contract to Sell

Below is an example of a Contract to Sell for a real estate transaction in the Philippines. Please note that this is a sample template and should be customized to fit the specific details of your transaction. It is highly recommended to consult with a legal professional or a real estate lawyer to ensure that the contract complies with Philippine laws and protects the interests of both parties involved.


THIS CONTRACT TO SELL (the “Agreement”) is made and entered into this _ day of __, 20_____, by and between:


Name: [Seller’s Full Name]
Address: [Seller’s Address]
Contact Number: [Seller’s Phone Number]
TIN: [Seller’s Tax Identification Number]


Name: [Buyer’s Full Name]
Address: [Buyer’s Address]
Contact Number: [Buyer’s Phone Number]
TIN: [Buyer’s Tax Identification Number]


The Seller agrees to sell and the Buyer agrees to buy a [Type of Property] located at [Property Address], more particularly described as follows: [Detailed Description of the Property].


The total purchase price for the property is [Total Purchase Price in Words (PHP _)], payable as follows:

  1. Down Payment: PHP [Down Payment Amount] upon the signing of this Agreement.
  2. Installment Payments: The balance of PHP [Balance Amount] shall be paid in equal monthly installments of PHP [Monthly Installment Amount] on or before the _ day of each month, starting on , 20__.


  1. The Buyer shall make the down payment upon the signing of this Agreement.
  2. The Seller shall transfer the title and ownership of the property to the Buyer upon the full payment of the purchase price.
  3. In the event of default by the Buyer in the payment of any installment, the Seller shall have the right to cancel this Agreement and retain all payments made as liquidated damages.
  4. The Buyer shall be responsible for all expenses related to the transfer of the title, including but not limited to taxes, fees, and notarial fees.
  5. This Agreement shall be binding upon the heirs, executors, administrators, and assigns of both the Buyer and the Seller.

IN WITNESS WHEREOF, the parties hereto have executed this Contract to Sell as of the day and year first above written.

________________ ________________
[Seller’s Name and Signature] [Buyer’s Name and Signature]


________________ ________________
[Witness 1 Name and Signature] [Witness 2 Name and Signature]

[Notary Acknowledgment, if applicable]

Please ensure that all the details in the contract, including the property description, payment terms, and conditions, are accurate and agreed upon by both parties before signing. It is advisable to have the document notarized for legal validity.

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