Selling property in the Philippines involves more than just listing it online or spreading the word. One of the first and most important steps is signing an Authority to Sell with a licensed real estate broker. This legal document is essential for a smooth, compliant, and secure transaction—for both the seller and the broker.
This guide will help you understand what an Authority to Sell is, why it’s necessary, and how to choose between an Exclusive or Non-Exclusive agreement.
What is an Authority to Sell?
An Authority to Sell is a written agreement between a property owner and a licensed real estate broker, granting the broker permission to market and sell the property.
It may also be referred to as an Authority to Offer to Sell or an Authority to Negotiate for Sale.
It is important to note that this document must also be in writing.
Why is an Authority to Sell Important?
- It is a legal requirement.
Under Philippine law, a licensed real estate broker cannot market or sell a property without written authority from the owner. This requirement is reinforced by a PRBRES (Professional Regulatory Board of Real Estate Service) memorandum released in 2019. - It protects both the seller and the broker.
A signed Authority to Sell clearly outlines the terms of the sale, preventing disputes and miscommunication down the line. - It formalizes the commitment.
This document signals that the property is actively for sale and provides the broker with the proper authority to represent the seller.
What Should Be Included in an Authority to Sell?
A well-drafted Authority to Sell typically includes the following:
- Date of signing
- Property details, including address, title number, land area, floor area, inclusions, and agreed selling price
- Responsibility for transaction costs, such as notarial fees, capital gains tax (BIR), local transfer tax, and title registration fees
- Broker’s professional fee or commission
- Validity or expiration date of the agreement
- Hold-over clause: allows the broker to still receive a commission if a buyer introduced during the validity period proceeds with the purchase shortly after expiry
- Signature of the property owner or the authorized Attorney-in-Fact
Exclusive vs. Non-Exclusive Authority to Sell
There are two main types of Authority to Sell: Exclusive and Non-Exclusive. Choosing the right one depends on your goals, your timeline, and your preferred working style.
Non-Exclusive Authority to Sell
This allows multiple licensed brokers to market the property simultaneously.
Advantages:
- Wider exposure to different networks
- More brokers working to find potential buyers
Disadvantages:
- The seller may receive inquiries from multiple brokers, causing confusion
- Brokers may not prioritize marketing since there is no guaranteed commission
- Risk of inconsistent information being shared about the property
Exclusive Authority to Sell
This grants one licensed broker the exclusive right to sell the property for a specific period.
Advantages:
- Single point of contact, making communication easier and more professional
- Brokers are more motivated to market the property actively and invest in advertising
- Trusted brokers usually collaborate with co-brokers and share the listing through professional networks
- Clear and consistent property information shared with buyers
Disadvantages:
- If the broker is not proactive or doesn’t perform well, the property may sit on the market longer
- The seller cannot work with other brokers during the exclusivity period
Conclusion
Starting the sales process the right way means working with a licensed real estate broker and signing an Authority to Sell that clearly outlines all responsibilities and expectations.
If you’re planning to sell your property, take time to ask your broker how they intend to market your listing, who will shoulder transaction costs, and what kind of exposure your property will get—especially under an exclusive arrangement.
A clear, written Authority to Sell protects your interests, ensures legal compliance, and gives your broker the proper tools to help you close the sale successfully.
Looking to sell your property?
We’re here to guide you through every step. Message us today to learn more about how we can help.
Leave a Reply