Steps in Buying a Property

It is understandable for first time buyers to feel anxious, but solid preparation and knowledge of the process will help you buy the house of your dreams.


1) Determine exactly what you can afford to buy. Your bank or lender can compute your maximum loanable amount  (based on the financial data you present to the bank or lender) so that you know where you stand financially from the beginning.

2) Identify Property to Buy > Once you have identified a property you would like to buy, investigate and verify the status of the title by getting a Certified True Copy of Title straight from the Registry of Deeds.  The copy from the Registry is more accurate and up-to-date in reflecting the present status of the title, as compared to the owner's original Title.

3) Title Verification >  If the property is proven to have a  clean title and has no problem with regards to registering the title to the Buyer's names, you may already give Earnest Money to the Owner of the property to reserve it pending the processing of the appraisal and loan. The property cannot be sold to another party for the period of time stipulated in the Earnest Money Agreement.

TAKE NOTE THAT if you are buying in Cash, then an Earnest Money would still be advisable while the contract is being drafted.  Sellers usually prioritize the first buyer who will give  Earnest Money.

4) Signing of the Deed of Sale.  At this point, Buyer is ready to complete his payment for the property either with full cash or a combination of Manager's Check and Bank Guarantee Letter. (The Bank Guarantee Letter is a promise of the bank to pay the Owner the amount stated in the Letter, with a condition that the Owner submits to the bank the new title already in the name of the Buyers).   

Note:  In a purchase of property through bank loan, the Owner will have to allow transferring of title to the buyer's name, with the assurance that the Bank Guarantee can be encashed upon submission of the new title to the bank.

Note: AUCTIONS > Many of the steps that go into purchasing a property privately also apply to auctions, such as arranging the required inspections and seeking formal approval of your loan.

Although it is possible for properties listed for auction to be sold in advance, in the majority of cases they will go under the hammer on a specified date.

If you are the successful bidder at the auction, you and the vendor will enter into an unconditional contract - at this point you will take legal ownership of the property.

5) Buyer's Additional Costs in Buying a Property:

1) Bank charges for the loan

2) Documentary Stamps Tax (1.5% of purchase price or zonal/market values, whichever is higher)

3) Registration Fees (estimated .5% of purchase price or zonal/market values, whichever is higher) & Misc Registry Fees

4) Transfer Tax (est. .5% of purchase price or zonal/market values, whichever is higher)

5) Cost to transfer Tax Declaration to buyer's name.


6) Misc / Optional Costs

Pest and building inspections are not obligatory, but they highly recommended for avoiding the possibility of buying a home with existing problems that could be very expensive to rectify later.



1) The real estate agent's costs are incurred by the vendor, so this is one aspect of the sale you will not need to worry about.

2) Consult and deal only with PRC licensed real estate brokers.  Licensed brokers are bound by laws and strict guidelines on how to provide professional services.  You can be assured that transactions will run smoothly and you will be guided accordingly on the step by step procedures in your purchase.