Week 10 Assignment: Documentation
in Real Estate Brokerage
Submitted on: July 11, 2025
Name: ____________________________
Course/Section: ____________________
Instructor: _________________________
Part A: Conceptual Understanding
1. What is an Authority to Sell?
An Authority to Sell is a legal document that authorizes a real estate broker to market and
sell a property on behalf of the property owner. This agreement clearly outlines the broker’s
responsibilities and the terms of engagement.
a. Who signs this document and what are its key contents?
The property owner and the licensed broker sign the document. Key contents include:
- Property details (location, size, title information)
- Price of the property
- Commission rate or amount
- Duration of authority
- Terms and conditions (e.g., exclusivity)
b. Why is it important in the real estate selling process?
It formalizes the relationship between the broker and the seller, protecting both parties
legally. It also gives the broker legal permission to market and sell the property, which is
necessary for ethical and professional dealings.
2. Differentiate between an exclusive and non-exclusive Authority to Sell.
a. Give a scenario where each would be appropriate.
Exclusive Authority to Sell means only one broker is authorized to sell the property. This is
ideal when a seller wants dedicated service and accountability.
Example: A high-value home where the seller wants full marketing focus from a single
agent.
Non-exclusive Authority to Sell allows multiple brokers to sell the property. It is
appropriate when sellers want broader exposure.
Example: A vacant lot where the owner wants to reach more potential buyers through
multiple brokers.
3. What are Reservation Forms used for in real estate transactions?
a. What details must be present in a valid reservation form?
- Name of buyer
- Project/property details
- Reservation fee amount
- Terms and conditions
- Signature of buyer and representative
b. What legal implications does a signed reservation form have for the buyer and
developer/broker?
It serves as a preliminary agreement that temporarily holds the property for the buyer. It
commits the developer to reserve the unit and indicates the buyer’s intent to purchase.
Failure to proceed may result in forfeiture of the reservation fee, subject to terms.
4. Explain the purpose of a Contract to Sell.
a. How does it differ from a Deed of Absolute Sale?
A Contract to Sell is an agreement between the seller and buyer that the property will be
sold once full payment is made. Ownership is not transferred yet.
A Deed of Absolute Sale is executed when the buyer has completed payment and the title is
transferred, finalizing the sale.
5. Why is proper documentation essential in real estate brokerage
transactions?
a. Discuss at least 3 risks of incomplete or informal documentation.
- Legal disputes due to unclear agreements
- Loss of commission or compensation
- Buyer or seller backing out without legal consequence
Part B: Application and Critical Thinking
1. Review a sample Authority to Sell.
a. Identify and explain the key elements.
- Property Details: Specifies the lot/house/condominium being sold.
- Broker’s Authority: Authorizes the broker to list, advertise, and sell the property.
- Price and Commission: States the selling price and commission rate.
- Duration: Indicates how long the authority is valid.
- Signatures: Signed by both seller and broker.
b. What clauses would protect the broker in the event of a dispute?
- Non-intervention Clause: Prevents the owner from selling on their own while under
exclusive authority.
- Compensation Clause: Guarantees commission if a buyer is found during the agreement
period.
- Termination Clause: Specifies procedures for canceling the agreement.
- Dispute Resolution Clause: Details how disagreements will be resolved (e.g., mediation or
arbitration).
2. Prepare a checklist of documents required from a client when listing a
property for sale.
- Photocopy of Property Title (TCT/OCT)
- Latest Tax Declaration
- Updated Real Property Tax (RPT) Receipt
- Valid Government-issued ID of Owner
- Special Power of Attorney (if applicable)
- Lot Plan or Site Map
- Pictures of the Property
- Authority to Sell Document
3. A client wants to sell a property but refuses to sign an Authority to Sell. What
would you do? Justify your answer.
As a licensed broker, I would politely explain the legal importance of the Authority to Sell
document. It protects both the seller and broker. Without it, I have no legal standing to
represent or market their property, and disputes may arise. If the client still refuses, I would
refrain from proceeding with the transaction to maintain professionalism and compliance
with PRBRES regulations.
4. Case Analysis:
A buyer signs a reservation form, pays the fee, but later backs out.
a. What happens to the reservation fee?
In most cases, the reservation fee is forfeited if the buyer backs out without valid reason.
This is clearly stated in the reservation form terms.
b. Under what circumstances can the buyer request a refund?
The buyer may request a refund if:
- The developer fails to comply with agreed terms
- There was misrepresentation or fraud involved
- The buyer cancels within a legally allowed cooling-off period, if applicable
5. Create your own sample (fictional but realistic):
a. Authority to Sell for a residential property
See attached file: Sample_Authority_to_Sell.docx
b. Reservation Form for a condominium unit
See attached file: Sample_Reservation_Form.docx
Sample Authority to Sell
This Authority to Sell is executed on July 11, 2025, by and between:
Property Owner: Mr. Juan Dela Cruz
Address: 123 Mabini St., Quezon City
Contact No.: 0917-123-4567
AND
Licensed Real Estate Broker: Ms. Maria Santos
PRC License No.: 1234567
Company: Santos Realty Services
Address: 88 Real Estate Ave., Pasig City
Contact No.: 0928-765-4321
PROPERTY DETAILS:
Property Type: Residential - Single Detached House
Location: 123 Mabini St., Quezon City
Lot Area: 200 sq.m
Floor Area: 160 sq.m
Title No.: T-987654
Selling Price: PHP 4,500,000.00
TERMS AND CONDITIONS:
1. The Owner hereby grants the Broker the authority to exclusively market, advertise, and
sell the aforementioned property.
2. This Authority to Sell is valid for a period of 90 calendar days from the date of signing.
3. The Broker shall be entitled to a 5% commission of the total selling price upon successful
sale.
4. The Owner agrees not to engage any other broker or sell the property independently
during the exclusive period.
5. In the event of a buyer’s withdrawal due to misrepresentation by the Owner, the Broker
shall still be entitled to full commission.
6. Any legal disputes arising shall be resolved under Philippine law, preferably through
mediation or arbitration.
IN WITNESS WHEREOF, the parties have hereunto affixed their signatures on this 11th day
of July, 2025.
__________________________
Mr. Juan Dela Cruz (Owner)
__________________________
Ms. Maria Santos (Licensed Broker)
Sample Reservation Form
Project Name: Skyline Towers Condominium
Developer: Metro Heights Development Corporation
Project Address: EDSA corner Pioneer St., Mandaluyong City
UNIT DETAILS:
Unit No.: 20B
Tower: North Tower
Unit Type: 1-Bedroom
Floor Area: 40 sq.m
Total Contract Price: PHP 3,200,000.00
Reservation Fee: PHP 25,000.00
BUYER INFORMATION:
Full Name: Ms. Ana Reyes
Address: 456 Makisig St., Caloocan City
Contact No.: 0918-888-2345
Email: [Link]@[Link]
TERMS AND CONDITIONS:
1. The reservation fee is valid for 30 calendar days and forms part of the total contract price.
2. This fee is non-refundable after 7 days, except in cases of developer fault or failure to
deliver.
3. The buyer agrees to complete required documents and pay the down payment within the
reservation period.
4. Failure to comply may result in forfeiture of the reservation and re-offering of the unit to
other buyers.
Signed on this 11th day of July, 2025.
__________________________
Ms. Ana Reyes (Buyer)
__________________________
Mr. Roberto Cruz (Developer’s Representative)
