Home › Buyer Guides › Contract to Sell vs Deed of Absolute Sale in the Philippines
The key difference: when ownership passes
| Contract to Sell | Deed of Absolute Sale | |
|---|---|---|
| Ownership | Stays with the seller until full payment | Passes to the buyer on execution and delivery |
| When signed | Start of an installment or loan purchase, after reservation | When the price is fully paid or the loan is released |
| Taxes triggered | None on the transfer yet | CGT or the seller's income tax, DST, transfer tax |
| Registered to transfer title? | No, though PD 957 requires developer contracts to be registered for buyer protection | Yes. It is the basis for your new title. |
| If the buyer stops paying | The seller may cancel, subject to Maceda Law rights | The sale is complete. The seller can sue to collect any unpaid balance but can't simply cancel. |
Where each document fits in a developer purchase
- Reservation agreement: holds the unit and price. Not a sale.
- Contract to Sell: signed during the equity period. It sets the price, payment schedule, penalties, turnover date, and cancellation terms.
- Loan documents: Pag-IBIG or the bank pays the developer the balance (takeout).
- Deed of Absolute Sale: executed by the developer in your favor, often together with a real estate mortgage in favor of your lender.
- Title transfer: taxes paid, eCAR issued, the deed registered, and a new title issued (annotated with the mortgage if you have a loan).
Clauses to read in a Contract to Sell
- Property description: the exact block, lot, area, house model, and turnover specifications
- Price and inclusions: VAT, miscellaneous fees, and what happens if the price list changes
- Payment schedule: due dates, penalties for late payment, and grace periods
- Cancellation and refunds: the terms must respect Maceda Law minimums for installment buyers
- Loan contingency: what happens if your loan is denied or approved for less
- Turnover date and developer delays: your remedies under PD 957 if the developer fails to develop
- Title delivery: when the developer will deliver or transfer the title after full payment
Clauses to check in a Deed of Absolute Sale
- Seller's and buyer's full names, civil status, and spouses' consent
- Title number and technical description, exactly as on the certified true copy
- The true selling price and acknowledgment of receipt
- Warranties against hidden defects and eviction, and that the property is free from liens
- Who pays which taxes and fees
- Proper notarization: the parties appear personally before the notary with valid IDs
Resale deals: watch out for "deed of sale" shortcuts
In private sales, some sellers sign a Deed of Absolute Sale before receiving full payment, or buyers pay in full without one. Both are risky. If you pay in installments for a resale, use a Contract to Sell (or a Deed of Conditional Sale) that clearly states when the absolute deed will be signed, and pay large amounts against documents, ideally through escrow.
Frequently asked questions
Does a Contract to Sell make me the owner?
No. Under a Contract to Sell, the seller keeps ownership until you fully pay. You become the owner when the Deed of Absolute Sale is executed and the property is delivered, and your title follows after registration.
Does a reservation form replace these documents?
No. A reservation agreement only holds the unit and the price. The Contract to Sell and later the Deed of Absolute Sale are the documents that define and complete the sale.
Can a seller cancel a Contract to Sell?
If the buyer defaults, yes, but for residential installment sales, the Maceda Law requires grace periods, notice by notarial act, and refunds for buyers who have paid at least two years of installments.
Should I sign a Deed of Absolute Sale before the title is ready?
Only if the price is fully paid or your loan is released, and the seller has a clean title able to transfer. Have the deed reviewed by a lawyer, and make sure it is properly notarized.
Related buyer guides
- Maceda Law Explained for Property Buyers in the Philippines
- PD 957 Explained for Subdivision and Condominium Buyers
- How Land Title Transfer Works in the Philippines (Buyer's Plain-English Guide)
- Documents You Need to Buy a House in the Philippines (Complete Checklist)
Official sources and further reading
Reviewed for accuracy on October 4, 2026. Rates, fees, thresholds, and agency procedures change. Confirm transaction-specific details with the issuing agency, your lender, or a lawyer before you pay or sign.
About the author: Jeremiah Villagomez is a PRC-accredited and DHSUD-accredited Real Estate Salesperson based in San Pablo City, Laguna. He helps first-time buyers, OFWs, and relocating families buy house and lot homes with Pag-IBIG, bank, or cash financing. More about Jeremiah · Call 0976 302 6551
Have a specific situation? Call or text 0976 302 6551 and I will run the numbers for your exact unit, budget, and financing route for free.
