Below is a comprehensive discussion of the costs associated with preparing a new Contract to Sell for real property in the Philippines, including an overview of relevant legal bases, typical notarial fees, and practical considerations. Please note: This article is for general informational purposes only and does not constitute legal advice. If you need guidance for your specific transaction, it is best to consult a qualified Philippine attorney.

1. Overview of a Contract to Sell

1.1 Definition and Purpose

A Contract to Sell is a legal instrument commonly used in Philippine real estate transactions. It lays out the mutual obligations of a seller (vendor) and a buyer (vendee) with respect to the future transfer of ownership of a property. Under this contract:

The seller retains ownership of the property until the buyer has fully paid the purchase price or satisfied certain conditions (e.g., completion of installment payments).
Once the buyer meets these conditions, the seller is obligated to convey the property through a final document—usually a Deed of Absolute Sale.

This arrangement differs from a Deed of Absolute Sale, where ownership (title) to the property transfers immediately upon signing and registration.

1.2 When a Contract to Sell Is Typically Used

Installment sales of real property.
Pre-selling situations (common with condominium units or subdivision lots), where buyers pay in tranches and the developer commits to deliver the property upon full payment or project completion.
Compliance with financing requirements; many lenders require evidence of a valid contract before loan releases.

2. Importance of Notarization

2.1 Legal Effects

Under Philippine law, a Contract to Sell can be valid even if it is not notarized; however, the notarial acknowledgment affirms that the parties personally appeared before a notary public and voluntarily executed the contract. A notarized document carries these benefits:

Public Document Status – It becomes “public” in nature, affording it greater evidentiary weight.
Presumptive Validity – Courts generally accept notarized documents as prima facie evidence of authenticity.
Record-Keeping – Notarized documents may be recorded with certain government agencies if necessary (e.g., Registry of Deeds in some cases).

2.2 Requirement for Registration

While a Contract to Sell itself is typically not required to be registered with the Registry of Deeds (unlike a Deed of Absolute Sale), some transactions—particularly those involving financing or installment sales—may require the document to be notarized for future registration and to allow annotation on the property’s title if desired.

3. Cost Components of a New Contract to Sell

When preparing and finalizing a new Contract to Sell, the cost may include the following components:

Professional Fees
- Lawyer’s Drafting or Review Fee: If you hire a private lawyer to draft, review, or negotiate the Contract to Sell, you must compensate them according to your engagement agreement. Fees can vary based on complexity, the lawyer’s experience, and the property’s value.
Notarial Fees
- Basis Under the Notarial Law: In the Philippines, the Supreme Court and local Integrated Bar chapters publish suggested fee guidelines, but actual charges can still vary.
- Common Range: For relatively straightforward contracts, you may find notarial fees ranging from a few hundred to a few thousand pesos. Some notaries calculate fees based on a small percentage of the property’s value or a flat rate plus an additional charge for multi-page documents.
- Location Variations: Urban centers (like Metro Manila or Cebu) often have higher notarial fees compared to provincial areas.
Documentary Stamp Tax (DST) and Other Tax Considerations
- DST on Non-Loans: Typically, documentary stamp taxes apply to certain documents of sale or conveyances of real property. However, a Contract to Sell is generally not yet considered a conveyance of title. DST is more commonly associated with the Deed of Absolute Sale and the transfer of the certificate of title.
- Potential Future Taxes: Taxes such as the Capital Gains Tax (on the seller’s side) and Transfer Tax (on the buyer’s side) typically arise upon execution of the Deed of Absolute Sale or actual transfer of ownership.
- Local Fees: Some local government units (LGUs) impose additional processing fees or clearance fees, though these typically become due at the final sale or property transfer stage.
Miscellaneous and Incidental Fees
- Printing and Reproduction: Minor costs related to producing multiple copies of the contract.
- Registration/Annotation Fees: If you intend to have the Contract to Sell annotated on the property’s title for notice to third parties, the Registry of Deeds may charge a registration fee.

4. Determining the Specific Amount of Notary Fees

4.1 Supreme Court Guidelines

The Supreme Court publishes guidelines (e.g., through the Rules on Notarial Practice and local bar associations) which provide baseline figures. These schedules are mostly advisory. Notaries may adjust their fees depending on:

The location of the notarial office.
The complexity of the transaction.
Whether the document has multiple signatories, exhibits, or attachments.

4.2 Market Practice and Negotiation

In actual practice, many notaries follow “standard” or “suggested” fees, though some are open to negotiation. Factors that may influence negotiation:

Existing Attorney-Client Relationship: If you already have a lawyer on retainer, the notarial fee might be part of a broader professional services package.
Quantity of Documents: Multiple documents that need notarization at the same time may reduce per-document fees.
Special Accommodations: Urgent notarial services, after-office visits, or travel to the client’s location may incur additional charges.

5. Drafting vs. Using a Standard Template

5.1 Developer/Agency Templates

For large real estate developers or agencies, a standardized Contract to Sell is often used. In many cases:

The buyer may not need to pay a separate lawyer’s drafting fee because the document is already prepared.
Buyers should still carefully review the contract or seek independent legal advice to ensure it aligns with their interests.

5.2 Customized Contracts

For unique transactions (e.g., complex property conditions, multiple sellers, or special stipulations):

It is advisable to consult an attorney to craft or tailor the contract to safeguard your legal interests.
This approach will incur higher professional fees but often prevents costly disputes.

6. Practical Tips

Budget Wisely
- Aside from the notarial fee, include a reasonable allowance for legal consultation, potential DST (if ever required for specific circumstances), and future costs like transfer taxes once the final Deed of Sale is executed.
Check the Validity and Completeness
- Ensure that the Contract to Sell clearly outlines payment terms, default conditions, and remedies in case either party fails to perform.
Verify the Notary Public’s Commission
- Always ensure that the notary public has a valid notarial commission in the city or province where notarization is done. An improperly notarized document could be deemed invalid.
Keep All Supporting Documentation
- Keep copies of receipts, the notarial logbook entry (or reference number), and any clearance or annotation documents. These can be crucial for enforcing the contract or settling any disputes later.
Plan for the Future Deed of Absolute Sale
- Remember that once all terms of the Contract to Sell are met, you must execute a Deed of Absolute Sale, which triggers a separate set of fees (capital gains tax, transfer tax, registration fees, etc.). It helps to plan for these costs in advance.

7. Summary and Key Takeaways

A Contract to Sell is a preliminary agreement often used in installment sales or pre-selling of real estate in the Philippines. It defers transfer of ownership until payment or other conditions are fulfilled.
Notarization is not strictly mandatory for the contract’s validity but is highly recommended for evidentiary and practical reasons (especially if the contract might be registered or used in future legal proceedings).
Costs associated with preparing a new Contract to Sell include professional legal fees (for drafting or review), notarial fees (governed loosely by Supreme Court guidelines and local practice), and potential incidental fees for printing, annotation, and other documentation.
Taxes like Capital Gains Tax, Transfer Tax, and Documentary Stamp Tax generally apply when the Deed of Absolute Sale is executed—i.e., when ownership is legally conveyed. A Contract to Sell, on its own, usually does not trigger these taxes.
Actual notarial fees can vary widely based on the property’s value, the number of parties, and the location of the notarial service.
Buyers and sellers are strongly advised to consult legal professionals for contract review and to ensure compliance with all local requirements.

In conclusion, while costs for a Contract to Sell and its notarization in the Philippines can be relatively modest compared to the final Deed of Sale and title transfer fees, it is crucial to handle this step properly. Adequate planning and consultation with qualified professionals will help prevent legal disputes, safeguard each party’s interests, and ease the transition to full ownership once the buyer fulfills the contract’s conditions.