Real estate involves many different documents. One of the most important of which is the deed of absolute sale. This document is relevant, whether you are buying or selling real estate. Without the deed of sale, the deal isn’t complete.
A deed is a legal document that demonstrates ownership of real estate property. The new owner has the "title" to a property once they file a deed listing.
Two different categories in which property sales can fall are absolute and conditional. If the only condition of the transaction is the payment of the property price, it is an absolute sale. If the property transfer will only happen when the buyer or seller meets certain conditions, it is a conditional sale.
What is an Absolute Deed of Sale?
A deed of absolute sale is a legal document. It proves the transfer of real estate property rights between parties. This deed is also known as a deed of sale of land rights.
Let's say you put your house up for sale for $200,000. Then, someone offers you the $200,000 outright for it—no questions asked. This interaction is an absolute sale, and the moment of purchase is only recognized by law after you and the buyer sign this document even if you have already been paid. A deed of sale should never be signed before the property has been paid for, and in the case of conditional deeds, those conditions are met.
What Does It Contain?
A sample deed of absolute sale would include the following information:
· Name of the seller and name of the buyer
· Information about the property
· Acknowledgment that the seller does indeed wish to give property rights to the buyer
· Confirmation that the seller has the license to sell the property
· The date when the transfer will become effective
· Location of sale
· Signature of buyer, seller, and notary
A notary public must be present and notarize the deed when it is signed for it to become a valid legal document. The parties file the deed in the county appropriate for the property.
In the Philippines, a deed of sale can also include other pertinent information, such as:
· an in-depth description of the property
· the market price of the property as determined by a land surveyor
· marital consent from the buyer’s and seller’s spouses
Why an Absolute Deed of Sale is Important
Anotarized deed of sale acts as legally binding proof of the sale and transfer of the property. It is essential to protect both parties’ rights in the event of a dispute. The Bureau of Internal Revenue also requires one for tax purposes, again, as it establishes legal ownership of the property.
When to Expect It?
You can expect the deed of absolute sale of real estate property once the buyer has paid for the property in full. The seller can also draft the deed if the buyer has paid an agreed-upon amount in advance. Then, the deed would outline the terms for the rest of the necessary payments.
First, the seller will draft the terms of the sale and present this draft to the buyer. The buyer and seller complete and sign the document once they agree to the conditions set in the draft.
What If the Seller or Buyer Couldn’t Sign in Person?
If the buyer and seller can’t meet in person, they can still finalize the sale. One way is to have both parties appear in front of the same notary at different times. This way, both the buyer and seller can sign the document with the notary present. The material will still be binding.
Sometimes, the two parties are unable to meet the same notary. The seller can sign the deed of sale before one notary and then send the notarized document to the buyer. The buyer can then sign the same deed before a notary.
What happens if the buyer or seller can’t sign the document in person due to being overseas? They can complete the deed of absolute sale with special power of attorney. A special power of attorney can appoint an Attorney-in-Fact. The Attorney-in-Fact represents the missing party in signing the deed.
Deed of Absolute Sale vs. Deed of Assignment
A deed of assignment is not finite, like a deed of absolute sale. A deed of absolute sale of real property transfers land ownership only once. On the other hand, a deed of assignment can transfer land rights to another party at any time.
How does this work? A deed of assignment is a similar document to a deed of absolute sale. It is a document which states that a new party will take over the right and responsibilities of another party in an existing contract.
For example, say as before, you're selling your home for $200,000. However, you have an existing mortgage, and the buyer would like to keep the terms of that mortgage. With a deed of assignment, the buyer would take over your contractual duty to that mortgage, and you would no longer be liable for the debt. The terms of the contract (or mortgage in this case) remain the same, but the responsible party changes.
A deed of assignment can include many stipulations and conditions. The buyer receives not only the property but all the current owner’s obligations to the property. Whereas an absolute deed of sale has no conditions beyond payment and simply transfers the property outright.
Both documents can be used to transfer land or property. The deed of assignment can also serve as a title deed in cases where the buyer does not yet have the real title deed, or the title does not exist.
A deed of assignment includes the following information:
· Names and signatures of the buyer and seller
· Confirmation that both the buyer and seller are of legal age
· The agreed-upon property price
· The complete property ownership history
· The agreed-upon roles of both parties in the deed execution
· Date of the transaction
Deeds of absolute sale of real property, such as a house and lot, can be full of complicated legal wording. In the Philippines, many resources exist to help you draft or read a deed of sale.