Step-by-Step Guide for First Time Lot Buyers

Buying a lot is one of the biggest purchases you’ll make. It’s not hard, but you have to do things in the right order. Follow these steps and you’ll avoid the most common mistakes.

1. Set your real budget

The price of the lot is not the final cost. Add the taxes and fees: documentary stamp tax, transfer tax, registration fees, notary fees and a survey if you need one. Set aside a few percent on top of the price. Who pays which tax is part of the deal, so agree on it in writing before you pay anything.

For a standard sale, seller usually pays the capital gains tax and notarial fees. Buyer usually pays for the doc stamp tax (BIR), transfer tax, and registration fee on ROD. 

2. Choose the area and visit the lot

Photos can hide a lot. Visit in person, ideally more than once and at different times of day. 

Check:

• How far it is from the main road, school, market and work
• Whether the road to it is paved and open all year
• Whether the area floods during heavy rain
• Whether there is water and electricity nearby

3. Ask for a copy of the title and vicinity map

The title is the proof of who owns the land. Ask the seller for a copy of the Transfer Certificate of Title (TCT) or the Original Certificate of Title (OCT). A tax declaration alone is not proof of ownership. If the seller only has a tax declaration, talk to a lawyer before going further.

4. Verify the title at the Registry of Deeds

Take the title number to the Registry of Deeds and ask for a certified true copy. 

Check that:

• The owner’s name matches the seller’s valid ID
• The lot number and area match what you were shown
• There are no liens, mortgages or case annotations on the back that block the sale

5. Check who is actually selling

• If the seller is not the owner, ask for a notarized Special Power of Attorney and confirm it with the owner. 
• If the land is owned by a married couple, both need to sign.
• If the owner has passed away, the heirs must settle the estate first. All heirs have to sign.
• If it is inherited land with several owners, every co-owner must agree to the sale.

6. Check the land itself

Boundaries: Hire a licensed geodetic engineer to do a relocation survey. This shows where the corners are and whether the actual size matches the title.

Zoning and classification: Ask the city or municipal zoning office whether the land can be used for what you plan to build. Agricultural land cannot simply be turned into a house lot. It may need conversion approval first.

Right of way: Make sure there is legal access to the lot, not just a path through a neighbor’s land.

7. Check the taxes

Ask for the latest real property tax receipts or a tax clearance from the city or municipal treasurer. Unpaid taxes become your problem after you buy.

8. Agree on the price and put it in writing

Negotiate the price, then pay a reservation fee only against a signed and dated receipt. The receipt should say what the fee is for and whether it is refundable. Never pay in cash without a receipt.

9. Sign the Deed of Absolute Sale

Once everything checks out, you and the seller sign the Deed of Absolute Sale in front of a notary. If you are paying in installments, you will sign a Contract to Sell instead, and the title is transferred only after the last payment. Have a lawyer read the document before you sign.

10. Transfer the title to your name

This is the step many buyers forget, and it matters most. Until the title is in your name, the land is not legally yours. Usually it goes like this:

1. Pay the taxes at the BIR (Bureau of Internal Revenue) and get the Certificate Authorizing Registration (eCAR). There are deadlines, so do this soon after the notary signing.
2. Pay the transfer tax at the city or municipal treasurer’s office.
3. Submit the documents to the Registry of Deeds and pay the registration fee. They will issue a new title in your name.
4. Update the tax declaration at the Assessor’s office, so future tax bills come to you.

Red flags: walk away or slow down if…

• The price is far below similar lots nearby
• The seller pushes you to pay quickly or pay in cash
• The seller can’t or won’t show a title
• The name on the title is not the seller’s, and there is no proper authority
• The seller won’t let you verify the title or do a survey
• The actual boundaries don’t match the title

Buying a property can feel overwhelming. If you’d like help, contact us and we’ll guide you through every step, from choosing the lot to getting the title transferred to your name.