Table of Contents
Navigating the property market can feel like learning a whole new language. With all the unfamiliar terms, abbreviations, paperwork, and financial jargon, it’s easy to feel a little lost, especially if you’re buying a property for the first time.
To make things easier, we’ve put together a simple guide to the real estate terms and abbreviations you’ll come across along the way. From browsing property listings and reviewing legal documents to understanding home loans, here’s what they mean and where you’ll encounter them in your homebuying journey.
Property Seeking and Listing Terms
When browsing property portals or social media listings, you will encounter shorthand describing property specs, layouts, and seller constraints.
Square Meters (Sqm)
The standard metric unit used to measure land size and floor space.
Floor Area (FA)
The total usable indoor floor space of a building, excluding open yards or unroofed areas.
Lot Area (LA)
The total land area within the legal property boundary lines.
Bedroom (BR)
A dedicated sleeping area.
Toilet and Bath (T&B)
A full bathroom equipped with a toilet, sink, and shower or bathtub, often referred to locally as a comfort room.
Powder Room
A half-bathroom consisting of only a toilet and sink, usually intended for guests and lacking shower facilities.
Car Garage/ Carport
A Car Garage is a parking facility fully enclosed on all sides with a door or gate, whereas a Carport features an overhead roof structure but remains open on at least one or two sides.
Masters Bedroom
The largest bedroom in a home, typically featuring an en-suite T&B and superior closet space.
Flex Room / Multi-purpose Room
A room that does not meet official bedroom specifications but can easily be converted into an office, maid’s room, or storage area.
Single-Detached House
A standalone house surrounded by open space on all four sides with no shared walls.
Single-Attached House
A home built with one wall resting directly against the property boundary line, sharing a party wall with a neighboring home.
Duplex
A single building divided into two separate dwelling units, sharing a central common wall.
Townhouse
A multi-story residential home built as part of a row of attached units sharing side walls.
Apartment
A residential unit situated within a multi-unit building.
Direct Buyers Only (DBO)
Indicates that the seller or agent will not negotiate with sub-agents or brokers, dealing exclusively with actual buyers.
Ready for Occupancy (RFO)
Turnkey properties that are fully constructed and immediately available for move-in upon settlement.
Pre-Selling
Properties offered for sale during the planning or construction phase, typically at lower price points and flexible payment terms before completion.
Rent to Own (RTO)
A lease structure where a portion of monthly rent payments is applied toward purchasing the property at a later date.
Inquiries and Formal Expressions of Interest
Once you find a property you like, you will begin working with licensed professionals and submitting preliminary paperwork.
Real Estate Broker (REB)
A registered and licensed professional authorized under Philippine law to negotiate and execute real estate transactions.
Real Estate Salesperson (RES)
An accredited practitioner working directly under a licensed REB.
Real Estate Service Act (RESA / RA 9646)
The governing law in the Philippines regulating real estate practice to protect consumers from unlicensed practice, often called “colorum.” Engaging illegal agents carries criminal fines and penalties under this law.
Letter of Intent (LOI)
A non-binding document submitted by a buyer expressing serious interest in purchasing a property under specified terms and prices.
Payment Structuring and Financing
During negotiations, the seller, developer, or financial institution will issue payment schedules, loan term sheets, and tax estimates.
Total Contract Price (TCP)
The complete purchase price of the property, inclusive of base cost, taxes, and applicable administrative fees.
Down Payment (DP)
The initial upfront portion of the purchase price, typically 10% to 20%, required before home loan financing covers the remaining balance.
Equity
The actual monetary portion of the property that you own outright, calculated as total property value minus remaining loan balance. As you pay down your loan principal, your equity increases.
Mortgage / Housing Loan / Home Loan
A legal agreement in which a lender (a bank, government institution like Pag-IBIG, or a developer) lends money at interest in exchange for taking title to the debtor’s property, with the condition that the conveyance of title becomes void upon the payment of the debt.
In-House Financing
A financing option provided directly by the property developer without third-party bank involvement, often featuring easier approval guidelines but higher interest rates.
Bank Financing
A housing loan secured through a commercial bank, generally offering lower interest rates and longer repayment terms up to 20 to 25 years compared to in-house options, but requiring stricter financial screening.
Home Development Mutual Fund / Pag-IBIG Loan (HDMF)
A government-backed housing loan scheme in the Philippines offering low interest rates and long repayment terms up to 30 years for qualified private and public sector members.
Loan-to-Value Ratio (LTV)
The percentage ratio of the loan amount compared to the appraised value of the property. Lenders use LTV to assess risk before approving loan applications (e.g., an 80% LTV means the bank finances 80%, and you pay 20% equity).
Debt-to-Income Ratio (DTI)
A financial metric used by mortgage underwriters to determine loan eligibility. It measures the percentage of your gross monthly income that goes toward paying total monthly debt obligations.
Lock-in Period
The timeframe during which your mortgage interest rate remains fixed, or the mandatory window during which you cannot refinance or pay off the loan early without incurring penalties.
Mortgage Redemption Insurance (MRI)
A specialized life insurance policy required by home loan lenders that pays off the remaining home loan balance if the borrower passes away or becomes permanently disabled during the loan term.
Fire Insurance
A mandatory insurance policy required by lenders for mortgaged properties to protect the structure against fire, natural disasters, and structural perils.
Monthly Amortization
The fixed monthly installment paid toward settling a housing loan, consisting of principal reduction plus accrued interest through your lender.
Income Tax Return (ITR)
An official tax document required by financial institutions to evaluate a buyer’s financial capacity during bank loan applications.
Zonal Value
The minimum valuation set by the Bureau of Internal Revenue (BIR) for real property in a specific area, serving as the benchmark calculation base for property taxes.
| Looking for More Real Estate Terms? If you come across specialized financing jargon, legal clauses, or municipal tax terms not covered in this guide, check out our Glossary of Real Estate Terms for an alphabetical directory of over 200 real property definitions. |
Offer Execution and Documentation
Securing the unit involves signing binding agreements and paying initial earnest fees.
Reservation Agreement (RA)
The contract signed when placing a reservation fee to temporarily take a unit off the market.
Buyer’s Information Sheet (BIS)
A standard form collecting the buyer’s personal, legal, and financial details for background verification.
Contract to Sell (CTS)
An agreement used primarily in pre-selling or installment purchases where the seller promises to transfer the title only after full payment of the agreed price. Banks routinely request a copy during mortgage evaluation.
Deed of Absolute Sale (DOAS)
The legal document signed by both parties transferring total property ownership from seller to buyer once full payment is made.
Special Power of Attorney (SPA)
A notarized legal document authorizing a designated representative to sign contracts or act on a buyer’s behalf if they cannot be physically present, which is common for overseas Filipino workers.
Closing, Taxes, and Title Transfer
Closing requires settling mandatory government fees, discharging encumbrances, and officially registering the property title under your name.
Capital Gains Tax (CGT)
A 6% tax imposed on the presumed profit from selling real property, based on TCP or Zonal Value, whichever is higher. By law, this is due within 30 days of notarizing the DOAS. While traditionally paid by the seller, the buyer and seller must explicitly agree in writing on who will cover it.
Documentary Stamp Tax (DST)
A 1.5% tax serving as legal evidence of the transaction contract, which must be remitted to the BIR by the 5th day of the month following the agreement.
Transfer Tax
A local government tax assessed on the transfer of property title, typically ranging from 0.5% to 0.75% depending on whether the property is located within or outside Metro Manila.
Value-Added Tax (VAT)
A 12% consumption tax applied to real estate sales exceeding BIR threshold amounts.
Original Certificate of Title (OCT)
The very first title issued by the government when land is registered for the first time.
Transfer Certificate of Title (TCT)
Issued when land covered by an OCT is sold or subdivided; the original title is canceled by the Registry of Deeds and a new TCT is issued in the new owner’s name.
Condominium Certificate of Title (CCT)
The official proof of ownership for individual condominium units, covering individual unit ownership alongside undivided interest in common areas.
Cancellation / Release of Mortgage
The legal document issued by the bank or financial institution certifying that your housing loan has been fully paid off, allowing the Registry of Deeds to remove the mortgage encumbrance annotated on your property title.
Real Property Tax/ Real Estate Tax
Colloquially known as amilyar, is an annual tax paid by property owners to their local government based on the property’s assessed value.
Expand your property search on Lamudi!
Now that you are equipped to decode listings and contracts like a pro, you can start exploring available properties today to find the perfect home that fits your needs and budget!
