Buying a resale property—whether it’s a house, condo, or townhouse—can be one of the smartest ways to invest in Philippine real estate. With resale properties, what you see is what you get, making it easier to assess the property’s condition and value. However, before handing over your hard-earned money, it’s crucial to conduct proper due diligence. This step is primarily the buyer’s responsibility, as you are the one making the purchase. But as your broker, I will be helping you and guiding you thru this process.

Due diligence is not about mistrust—it’s about protecting yourself. It ensures that the property is free from legal or financial issues, that its boundaries and title are correct, and that the transaction proceeds smoothly. Taking this precaution helps you avoid costly surprises and gives you peace of mind that your investment is secure. As a buyer you should never skip this process — it’s the foundation of a stress-free transaction.

I’ve been a real estate broker for over a decade and have helped hundreds of clients invest in property all over the Philippines. We have a Due Diligence checklist you can refer to, message me on whatsapp if you want a copy. If you have any questions, contact me for an online consultation.

Today, I’ll be sharing with you a practical 5 step guide on how to do due diligence when buying resale property in the Philippines.

1. Verify the Seller’s Identity and Ownership

The very first step in doing due diligence for a resale property is to make sure that the person selling the property actually owns it — or has the proper authority to sell it. This may sound obvious, but many buyers skip this step and end up dealing with unauthorized sellers, fake documents, or even properties with multiple claimants. Ask for a valid government ID and compare it with the name on the Transfer Certificate of Title (TCT) – for house or lot or Condominium Certificate of Title (CCT) for condos.

• Is the seller an individual or a company? If named under a company, is it vatable? If its a company regularly engaged in real estate and is vatable, you will need to shoulder VAT 12% instead of CGT 6%.

·       If the seller is a business owner, it’s important to verify whether they have any ongoing legal or tax-related cases. The Bureau of Internal Revenue (BIR) now requires that any open cases be resolved before they release the eCAR (Electronic Certificate Authorizing Registration) under the buyer’s name. Failing to check this could delay the transfer of the property

• If the property is being sold on behalf of someone else, request a Special Power of Attorney (SPA) authorizing them to sell.
• For deceased owners, check that the extrajudicial settlement and heirship documents are in order.
• The spelling should match exactly. Even minor differences (like missing middle initials or suffixes such as Jr./Sr.) should be clarified and corrected through supporting documents.
• If the seller is married, both spouses should also sign the deed of sale even if the title is only named under one spouse. This is why for married sellers, we should also request for their marriage certificate to verify the name of their spouse.

·       If the property was inherited exclusively by the wife (meaning it was part of her inheritance and not conjugal property), then technically the property is her exclusive property under Article 92(1) of the Family Code, which states that properties acquired by gratuitous title (like inheritance) by one spouse remain exclusive. However even if it’s her exclusive property, the husband’s signature is still usually required in the Deed of Sale, not because he owns the property, but to show spousal consent.

Best practice: Always have both spouses sign to avoid any question of validity or registry issues later.

2. Check the Title and other property documents

Here are the documents you will need to request during due diligence. For the transactions we handle, our team usually takes care of this on behalf of the buyer. Requesting these documents typically costs around ₱1,000–₱1,500 per title, as you need to pay fees to both the Registry of Deeds (ROD) and the City Hall to obtain certified true copies. Handling this properly ensures that all necessary documents are in order before proceeding with the purchase.

ROD:

Certified true copy title

CITY HALL

CTC tax dec lot

CTC tax dec bldg (if house/condo/bldg)

Certificate of latest and existing

Certificate of no improvement (lot only)

Tax clearance for the year

Other documents:

Verified TIN of Seller and Buyer (BIR)

Marriage contract

Why should you request for a CTC at ROD vs checking the title on hand with the seller?

The owner’s copy might not reflect the latest updates or annotations. When you secure a CTC, you see the most recent record from the ROD, including:

·       Any transfers of ownership that have been recently registered or whether the title has been cancelled or replaced by a newer one

·       Annotations usually on the 2nd page of the title

Common annotations include:

· Mortgages – indicate that the property is pledged as collateral to a bank or lender.

· Liens – show that there’s a financial claim or obligation tied to the property.

· Adverse Claims – filed when another party asserts an interest or ownership right.

· Notices of Levy or Court Orders – signal legal disputes, unpaid taxes, or foreclosure proceedings.

If you find any of these annotations, do not proceed immediately with the purchase. Always request the official documents that clear these encumbrances.

·       For mortgaged properties, request for a Cancellation of Mortgage from the bank.

·       A Release of Lien or Affidavit of Waiver of Adverse Claim from the concerned party.

·       A Court Order of Cancellation if the encumbrance resulted from a legal case.

Verify the tax declaration and confirm that it matches the same property on the title. There are times when only the title is transferred while the tax declaration is still under the previous owner. So this will need to be updated.

The tax clearance will also show that the real property tax (amilyar) has been update for the year. Any unpaid amilyar becomes the buyer’s liability after transfer, so it’s crucial to settle this before closing the sale.

3. Check Utility Accounts and HOA dues

Other things to check are:

Condo/HOA dues latest OR (for properties in subdivisions/condos)

Lot plan

Utilities Latest OR (for house and lot)

⁃            electricity

⁃            water

⁃            internet

Management certificate (for condos)

Lot Plan

Zoning certificate (for properties outside of subdivisions)

A clean property also means no unpaid dues. For properties in subdivisions or condominiums, request for a Statement of Account or Dues Clearance Certificate from the HOA or condo admin. This will confirm if monthly dues have been paid. If the property is inside a condominium, ask for a Management Certificate indicating that there are no unpaid dues or pending violations. A "clean" property means there are no arrears that could delay the issuance of a move-in permit or clearance for transfer. We also request for the latest official receipt for electricity, water and internet if applicable to ensure that all utilities are updated and fully settled.

For properties located outside of subdivisions, particularly industrial or commercial properties, obtaining a Zoning Certificate is essential. This certificate verifies the property’s zoning classification (e.g., Residential, Commercial, Industrial) and outlines what activities, developments, or structures are legally permitted on that land.

A Zoning Certificate is crucial to ensure that the property can be used for its intended purpose. For example, in a recent transaction I handled involving an industrial property currently operating as a warehouse, the buyer requested a Zoning Certificate to confirm whether the property’s classification matches its current use.

4. Conduct a Physical Inspection

Even if the documents are clean, the property itself could reveal major issues.

For houses or commercial buildings, inspect the structure, roof, plumbing, electrical, and drainage systems. You can bring a contractor or architect, a professional, who can help you check and estimate the cost of necessary repairs. Look for signs of flooding, cracks, or foundation problems.

As part of due diligence, it’s highly recommended to hire a geodetic engineer to inspect the property and verify its boundaries. A geodetic engineer is a licensed professional trained in accurately surveying and mapping land. Their assessment ensures that the property’s actual physical boundaries match what is indicated in the Title or Lot Plan. If it’s a lot located inside a subdivision, you request to have the developers engineering team to stake the boundaries of the property.

Knowing the precise area of the property is essential to ensure that you’re paying—or receiving—the property based on its true size. A geodetic engineer can also identify any encroachments or discrepancies, which can prevent costly disputes in the future.

For example, in a recent industrial property transaction I handled, the buyers had the property surveyed by a geodetic engineer. The survey revealed that the fences constructed by the seller did not align with the actual property boundaries—they were built inside the property, resulting in a loss of around 53 sqm. The resolution was straightforward: the boundaries were properly outlined on the property to reflect the correct measurements, ensuring both parties were aligned before finalizing the deal.

In another deal I handled, the buyer requested that the developer stake the lot boundaries. During this process, we discovered that the neighbor had encroached on about 20 sqm of the property. We attempted to contact the neighbor to resolve the issue, but the house beside the property was vacant, so we couldn’t reach anyone. In the end, the buyer decided to proceed with the purchase but deducted the value of the 20 sqm from the total price to account for the encroachment. This case highlights why verifying property boundaries before completing a transaction is so important—it can prevent unexpected losses or disputes later on.

5. Review the Deed of Sale and Negotiation Terms

Once you’re ready to move forward with a property transaction, it’s crucial to carefully review the Deed of Sale and any other pertinent documents. These documents should clearly identify the property, specify the selling price, and outline the payment terms.

In our process, once the buyer and the seller has finalized the price and terms, I have them sign an Accepted Offer document. This document serves as a written record of the final agreed-upon terms and includes:

·       The final selling price

·       Payment schedule or terms

·       A detailed computation of taxes and fees, indicating who is responsible for each (e.g., Capital Gains Tax, Documentary Stamp Tax, registration fees)

Having the terms documented and signed by both parties is essential. It provides clarity, reduces the risk of misunderstandings, and serves as a reference if any questions or disputes arise later.

In Cagayan de Oro (CDO), the common practice is for sellers to quote a net selling price, with buyers typically shouldering all transfer taxes and fees, including the Capital Gains Tax, Documentary Stamp Tax, and registration fees. However, this is not a fixed rule—every deal is unique, and the responsibilities can be negotiated based on the agreement of both parties.

6. Set a Closing Date

Once all the documents are ready and the property has been thoroughly checked, the final step is to set a closing date. This date is agreed upon by the buyer, seller, attorney, and processor.

During the closing:

·       The lawyer facilitates the process and notarizes the necessary documents.

·       The processor receives the documents and immediately begins the transfer of ownership with the Registry of Deeds. Skipping this part means the property remains under the seller’s name — which could cause issues when you decide to sell later.

It’s crucial to pay the required taxes on time, as the BIR imposes penalties for late payments:

· Capital Gains Tax (CGT): Due within 30 days from notarization of the Deed of Sale.

· Documentary Stamp Tax (DST): Due by the 5th of the following month after notarization.

BIR Penalties for Late Payment:

· Surcharge: 25% of the unpaid tax

· Interest: 20% per annum on the unpaid amount, computed from the original due date until full payment is made

Paying taxes promptly ensures a smooth transfer of ownership and avoids unnecessary additional costs.

Doing due diligence when buying a resale property in the Philippines isn’t complicated — it just requires patience, verification, and the guidance from the right broker. Here at Truly Wealthy Realty, we have a team of Elite agents to guide our clients during every step of the process to ensure that they’re buying from the rightful owner, the property is free from legal issues and you can enjoy peace mind knowing your investment is secure.

If you’re ready to start your property search or want a Due Diligence checklist, feel free to message me on WhatsApp or schedule an online consultation. Together, we can make sure your next real estate investment is safe, smart, and worry-free.

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