When buying or selling a second hand car, you’ll probably hear the term ‘deed of sale.’ This piece of paper could be the difference between a good, hassle free transaction and a ton of lawsuits filed against you. If you don’t want the latter to happen to you, it would be best to read on and find out why it’s important to get familiar with a vehicle’s deed of sale.
First we need to know what it is. The deed of sale is a legal, binding document proving that both buyer and seller have reached an agreement of sale or purchase of an immovable property or in this case a motor vehicle (MV).
It should indicate the details of the MV such as make, color, body type, plate number, model, and engine number. Besides that, a deed of sale should include personal details of the seller such as the full name, marital status, address, and how much the vehicle should be sold. Moreover, details about the buyer such as full name and address will also be written in the document and signed by both parties. Finally, this should be notarized by a lawyer.
Legally, buyers are required to register the MV at the Land Transportation Office (LTO) once it changes ownership. However, there’s this practice wherein the details of the buyer are left blank which is called open deed of sale.
This comes in handy for those who are in the car buy and sell business because it saves them time and money to have a vehicle registered only to sell it after a short period.
If you plan on selling or buying an MV car with an open deed of sale, DO NOT. Why? Although it may be a binding contract between the buyer and seller, the vehicle will technically remain in the ownership of the seller until the buyer decides to register it under their name. What this means is that the seller will be responsible in case the buyer gets involved in a hit and run accident or similar cases.
For the buyer, settle this document as soon as possible to get full ownership and avoid problems in the future such as searching for the previous owner.
Knowing the things that you should look out when buying a second hand vehicle is important. This would not only save you your hard-earned money but the time you spent getting the documents right as well. We hope this could help guide you in making the right decision when the time comes.
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Are they essentially the same thing with different names?