A contract to sell is one of the legal forms commonly used. Contract sell, just like any other legal forms should be made and executed by and between the seller or the vendor and the buyer or the vended. Just like any other legal forms, the name, age, status, citizenship and postal address of both contracting parties should be stated therein and should clearly define who are the vendor and the vended. If either or both of the contracting parties are married, a marital consent is always sought in this kind of transaction. The spouse’s signature is also required in executing this legal form.
In this contract to sell, a complete description of the subject property and its location should not also be missed in preparing a legal form. Terms and conditions agreed upon by both contracting parties should completely be stated in the contract to sell including the amount involved in this sale and the terms of payment. Payment varies on the arrangement set by both contracting parties. It can be made in full upon signing of the contract to sell or the buyer may opt to make a partial payment in a percentage both parties allowed upon signing of the contract to sell and pay the remaining balance on a certain date accepted and agreed upon by the seller. To protect the interest of the seller, a post-dated check may be issued by the buyer with the date indicated as arranged. In case the check representing the payment for the balance was dishonored by the drawee bank when deposited on its maturity date, the partial payment intended for the down payment shall be forfeited in favor of the seller and this is in accordance to law.
The law also requires the seller to pay for the Capital Gains Tax and the Real Estate Tax, while the documentary stamps, registration expenses and all other miscellaneous expenses shall be accountable to the buyer.
If settlement of payment has been done without any problem and full payment has been received by the seller, the seller should execute and sign a deed of absolute sale and the possession of the subject property shall be turned-over to the seller, together with all the documents, including but not limited to the original copy of Transfer Certificate of Title, Tax Declaration and all other documents necessary for the transfer of ownership from the seller to the buyer.
Just like other legal forms and instruments, a contract to sell and the deed of absolute sale cannot be considered legal and binding if it has not been signed on each and every page by the concerned parties and their witnesses, and is notarized and sealed with a notarial seal, proof that the said instrument had been fully acknowledged by both the contracting parties in the presence of a qualified notary public as their free and voluntary act and deed.