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Deed of sale
In Philippines
Last Updated: Mar 21, 2023
Trying to sell our property but our buyer is using a house loan through a bank. As part of the requirement of the bank prior to the release of funds, they need the deed of sale and the title to be transferred to the buyer. We have been given the bank guarantee that the buyer has been approved for the loan amount. Should the deed of sale mention that the funds are still under a loan? But how do we file for taxes and transfer the title if that's the case? But if we say the buyer is paid in full even though we have only had a bank guarantee, what is our protection as a seller once the title has been transferred to the buyer?
Answers (1)
Posted Wed, Mar 22, 2023 5:26 AM
It is common practice for a bank to require the transfer of the title and deed of sale to the buyer before releasing the funds for a house loan. This is done to protect the bank's investment and ensure that they have legal ownership of the property in case of default.
When drafting the deed of sale, it is important to disclose that the buyer is using a house loan to purchase the property. This can be done by adding a clause that states that the funds used to purchase the property are subject to a house loan.
Regarding taxes and title transfer, you should consult with a real estate lawyer or a tax specialist to ensure that you comply with all legal and tax requirements. They can advise you on the proper procedures to follow when selling a property under loan.
As for your protection as a seller, you should ensure that the terms of the sale are clearly stated in the deed of sale and that all parties have agreed to them. This includes the terms of the loan, such as the repayment schedule and interest rate. You should also ensure that the buyer has provided a down payment or earnest money to show their commitment to the purchase.
In addition, you may want to consider purchasing title insurance to protect yourself against any future claims or disputes regarding the property's title. A title insurance policy can provide coverage for any losses or damages resulting from title defects or ownership disputes.
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