Selling a House in the Philippines:
What You Need to Know
Thinking of selling your house in the Philippines? It’s important to understand the process. Here’s a guide to help you through it.
Introduction
Selling a house in the Philippines requires careful study, preparation and a good understanding of the market. With the right knowledge and approach the process can be made much easier, and the outcome can be highly rewarding.
This comprehensive guide to selling a house in the Philippines, covers everything from determining the asking price, preparing your property for sale, marketing, showing to potential buyers, to negotiating offers and closing the deal.
The guide answers frequently asked questions and provide information on the various steps involved in the process, including the taxes involved, transfer fees and other expenses, the role of licensed real estate brokers and their accredited salespersons, and the requirements for selling a property.
How do I sell my house in the Philippines?
Preparing the house for sale
Preparing your house for sale is an important first step in the process of selling a property in the Philippines. Here are some key steps to help you get started:
Clean and declutter: A clean and tidy house will appeal to more potential buyers and make a good first impression. Decluttering will also make the house appear larger and more spacious. It would be also good to depersonalize your house, removing photographs, etc. that make it easier for potential buyers to imagine themselves living there.
Repairs and upgrades: Take care of any necessary repairs and make any cosmetic upgrades that will improve the look and value of your property. This could include fixing leaky faucets, repainting, and updating fixtures and appliances. Don’t forget to fix up the yard or garden area.
Professional photography: High-quality photos are an essential part of marketing your property. Your licensed real estate broker should help you with this.
By following these steps, you’ll help your house stand out in a competitive market and make a good impression on potential buyers. Additionally, preparing your house for sale can help you achieve a faster sale and a higher asking price.
Working with a licensed real estate broker and their accredited salespersons
Securing the services of an experienced licensed real estate broker and their accredited salespersons is an important step in the process of selling your house. The benefits of working with a professional:
Expertise: Licensed real estate brokers have extensive knowledge of the local market and can provide valuable insights into the best strategies for selling your property. They can help you determine a competitive asking price, negotiate offers, and navigate the legal and administrative aspects of the sale process.
Marketing and exposure: Licensed real estate brokers and their accredited salespersons have access to a wide range of marketing tools and platforms that can help your property reach a large audience of potential buyers. Check out how we market the properties we are listing. They will help create a compelling listing, showcase your property to interested buyers, and handle all aspects of the negotiation process.
Network and connections: Licensed real estate brokers and their accredited salespersons have a network of contacts and relationships within the industry that can be leveraged to help you sell your property more quickly and effectively.
Professionalism and objectivity: Licensed real estate brokers and their accredited salespersons can provide valuable support and guidance throughout the sale process. They can also bring a level of objectivity and professionalism to negotiations.
By working with an experienced and reputable licensed real estate broker and their accredited salespersons, you can tap into a wealth of expertise and experience that can help you sell your house more efficiently, effectively, and profitably.
Setting the asking price
Setting the asking price for your house is an important aspect of the selling process. Here are some tips for determining a competitive and attractive price:
Conduct market research: Before setting an asking price, it’s important to research the local real estate market to determine the current trends, demand, and competition. This information can help you determine a price range that is realistic and competitive.
Determine the value of the land separate from the improvement or house. Remember that land is NOT a wasting asset. The house or improvement, on the other hand, is a wasting asset – meaning it gets older as time goes by and its value diminishes. Therefore you need to determine the depreciated value of the house and add the current market value of the land.
The Asking Price or the Listing Price of properties you will encounter in your research are NOT the actual values of property. Remember, that these will still undergo price negotiation and the actual price at which the sale closes could vary widely from the asking price.
Consider the condition of your property: The condition of your house will impact its value and desirability to potential buyers. Make repairs or upgrades that can increase the value of your property and make it more appealing to buyers.
Get professional opinions: a licensed real estate appraiser can provide valuable insights into the value of your property and help you determine a fair and competitive asking price. It also removes the emotions involved in selling a beloved property. A licensed real estate appraiser will have an objective, not subjective, view of the property and will provide you a fair valuation.
Be flexible: The asking price is not set in stone and can be adjusted if needed. Be open to feedback from your licensed real estate broker and be prepared to make changes to your price if it’s not attracting enough interest from buyers.
By setting a realistic and competitive asking price, you can maximize your chances of attracting interested buyers and successfully selling your house in the Philippines.
Marketing the property
Marketing your property is an important step in the process of selling a house in the Philippines. Here are some tips for effectively marketing your property:
Use professional photos: High-quality, professional photos of your property can help to attract potential buyers and showcase the property in the best light. Your licensed real estate broker would help you with this.
Utilize online real estate platforms: real estate websites are great places to list your property and reach a large pool of potential buyers. Again, the licensed real estate broker will be tapping these platforms for you.
Utilize social media: Social media platforms like Facebook, Instagram, and LinkedIn can also be effective in promoting your property to potential buyers.
In our case, we use paid advertising in Google, Facebook and Instagram to increase the reach of the properties we are marketing. We also use Virtual Tours and Real Estate Videos to give potential buyers a clear idea of the properties we carry. How we market our property listings.
By implementing these marketing strategies, you can increase your chances of attracting interested buyers and successfully selling your house in the Philippines.
Showcasing the property to potential buyers
Showcasing the property to potential buyers is an important aspect of the selling process. This involves presenting the property in its best light, highlighting its features and benefits to potential buyers. Showcasing the property effectively can help attract more potential buyers, increase the perceived value of the property, and ultimately result in a faster and more successful sale.
TIP: Appeal to the senses when it comes time to show the property to potential buyers. During a showing, open up the windows to bring in natural light. Turn on all the lights. Turn on your aircon units. Make sure the house smells good. Make entering the property a pleasant experience.
Negotiating offers
Negotiating offers is a crucial step in the process of selling a property. This involves receiving and evaluating offers from potential buyers, and working with them to reach a mutually acceptable agreement on the terms and conditions of the sale.
Effective negotiation can involve a variety of tactics, such as making counter-offers, compromising on certain aspects of the sale, and explaining the reasons for a specific asking price. The goal of negotiating offers is to reach an agreement that is fair and beneficial for both the buyer and the seller. A successful negotiation can result in a successful sale and can help ensure that both parties are satisfied with the outcome.
Closing the sale
Closing the sale is the final step in the process of selling a property. This involves completing all necessary paperwork, receiving payment for the property, and transferring ownership of the property. The closing process typically involves the following steps:
Signing the sales contract: The buyer and seller will sign a sales contract (which could include a Contract to Sell besides the Deed of Absolute Sale) that outlines the terms and conditions of the sale.
Receiving payment: The seller will receive payment for the sale and transfer possession of the property to the buyer.
Payment of fees and taxes: All necessary fees and taxes will be paid, including the notary fee and transfer of title fees. TIP: Don’t forget to transfer the Tax Declaration. Read this comprehensive guide on how to transfer a title in the Philippines.
Closing the sale is an important step that ensures that the transfer of ownership and payment for the property is completed correctly and efficiently. A successful closing can result in a successful sale and help ensure that both parties are satisfied with the outcome.
FAQ
How do I sell my house in the Philippines?
To sell a house in the Philippines, you will need to follow these steps:
- Determine the fair market value of your property
- Prepare your house for sale
- Choose a reputable licensed real estate broker and their accredited salespersons
- List your house for sale
- Negotiate with potential buyers
- Sign a sales contract
- Pay any taxes and fees associated with the sale
What is the fastest way to sell a house in the Philippines?
The fastest way to sell a house in the Philippines is to price it competitively, prepare it well for viewing, and choose a reputable licensed real estate broker and their accredited salespersons with a wide network of potential buyers.
How much is the tax for selling a house in the Philippines?
In general, the tax for selling a house in the Philippines is dependent on whether the property is a Capital Asset or an Ordinary Asset and the Seller’s TIN.
If it’s a Capital Asset, the tax, payable to the Bureau Internal Revenue, is called the Capital Gains Tax (CGT), which is 6% of the sale price, the Zonal Value of the land and the assessed value of the improvement (the house), or the local government Assessors Office’s assessed value of the land and improvement property — whichever is higher.
If it’s an Ordinary Asset, then the tax will be 12% Value Added Tax and 6% Creditable Withholding Tax.
In either case, an additional 1.5% Documentary Stamp Tax will be incurred.
What is the easiest way to sell a house?
The easiest way to sell a house is to work with a licensed real estate broker and their accredited salesperson to handle the listing, marketing, and negotiations for you.
What are the fees for selling a house?
The fees for selling a house in the Philippines can include:
- Commission for the licensed real estate broker and their accredited salespersons
- 6% Capital Gains Tax (CGT) or 12% Value Added Tax (VAT) plus 6% Creditable Withholding Tax (CWT) payable to the Bureau of Internal Revenue
- 1.5% Documentary Stamp Taxes
- Transfer Taxes payable to the local government unit (0.50% to 0.70%)
- Notary fees for the deed of sale
- Transfer of title fees
- Transfer of tax declaration fees
Why is it so hard to sell my house?
It can be hard to sell a house if:
- It has the wrong price: overpriced
- The property was not prepared well for viewing
- There are limited potential buyers in the area
- The market conditions are not favorable
What is the most profitable way to sell my house?
The most profitable way to sell a house is to price it competitively and work with a reputable licensed real estate broker and their accredited salespersons who can help you get the best price for your property.
What are the requirements to sell a house?
The requirements to sell a house in the Philippines are:
- Title to the property: Transfer Certificate of Title or Original Certificate of Title or, for condominiums – Condominium Certificate of Title
- Payment of any outstanding taxes and mortgages
- A valid identification for both the seller and the buyer
- A valid Tax Identification Number for both the seller and the buyer
- An Authority to Sell for the licensed real estate broker selling the property
Who will pay the deed of sale buyer or seller?
In most cases, the buyer pays for the notary fees for the deed of sale. However, this can be negotiated between the buyer and the seller.
How much is the notary fee for deed of sale in the Philippines?
The notary fee for the deed of sale in the Philippines varies. In actual practice, it depends on the amount of the sale price, and the lawyer notarizing the document. Note that not all lawyers are notary publics.
Lawyers, who are notary publics, who will notarize a sales document would sometimes charge between P500 to P1,000 for every P1 Million pesos of the consideration. So a sale of a house for P10 Million will have a notarial fee of P5,000 or P10,000.
Why is it expensive? A reputable notary public should be able defend in court, if questions arise, to the veracity of the parties that signed the deed. If your notary public sits under a mango tree and just charged you P100….. good luck with that.
How much is the cost of transfer of title in the Philippines?
First off, let’s define the norm of who pays for what. We say norm because these arrangements can be negotiated. The norm in the Philippines, assuming the property is a Capital Asset, is the Seller typically just pays for the Capital Gains Taxes and the Broker’s Commission.
The Buyer typically pays for notarial fees, Documentary Stamp Taxes, Transfer Tax fees, the actual cost of title transfer and tax declaration transfer. As a rule of thumb, the Buyer’s cost to transfer title, based on the above list, would be equivalent to 2.8% to 3.3% of the price. So you have an idea of how much to budget for the transfer.
If you get a lawyer, law firm or title transfer company to handle the title transfer for you, they would typically charge P25,000 to P35,000 for Metro Manila properties.
How much is the attorney’s fee for deed of sale in the Philippines?
The attorney’s fee for preparing the deed of sale in the Philippines can range from PHP 3,000 to PHP 50,000 (or more), depending on the complexity of the sale and the services provided by the attorney.
Who will pay the transfer of title in the Philippines?
The transfer of title in the Philippines is typically paid for by the buyer, but this can also be negotiated between the buyer and the seller.
Selling a house in the Philippines can be a complex process, but with the help of a reputable licensed real estate broker and a clear understanding of the requirements and fees involved, it can be a smooth and profitable experience.
