Open Deed of Sale: Deal-maker or deal-breaker?

Trawling Facebook Marketplace nowadays reveals quite a lot of stereotypes among all of the ads:

•  “PM is key” – My price is way too high, but I don’t want YOU knowing that.
• “Pwede sa maselan” (“Passes scrutineering”) – I painted it 10 years ago and it still looks fine.

But there’s one Marketplace stereotype that can throw even the most experienced trawlers for a loop – “Open Deed of Sale.”

This particular Autofun writer has seen his fair share of vehicles being sold with an “Open Deed of Sale.” In fact, I’ve even bought two of them, albeit only one came from Facebook Marketplace.

Between the two, one was riddled with issues that’s taken me years to resolve, while the other is just waiting for me to find time to go to the licensing office to process all the paperwork. We’ll discuss later which was which.

The first was a 1991 Honda Civic hatchback, lovingly known among fans as the EF. When done right, the EF Civic is a platform that offers amazing handling and performance on track.

When done wrongly, it’s a nightmare riddled with constant repairs. No prizes to guess which mine was.

But the most concerning issue with that car was the paperwork. The vehicle belonged to a family friend, or rather to her deceased husband. While the car was a one owner vehicle since new, it was never transferred before his death, so the car was still in his name when I came along.

Normally, that wouldn’t be a big deal, as long as he was able to make and sign an open Deed of Sale before his passing. And the car did, in fact, have an open Deed of Sale. It even came with all the pertinent documents needed to facilitate the transfer, namely his identification, so it should have been easy as pie.

Except that...

Alas, Murphy’s law struck, and the Land Transportation Office pointed out that, because he was dead and that he hadn’t signed the Deed of Sale, nor countersigned his identification, we needed to prove he was dead by providing a death certificate.  We also needed to produce a recent obituary, which we thought would be hard since he had passed 3 years prior.

If we could get all of that, we needed to provide a Special Power of Attorney stating that his wife would be handling the disposal of his estate. Once we had all of that done, only then could we proceed.

On the flipside...

The other vehicle I bought was a 1996 Mitsubishi L200 4x4 Pickup. It had absolutely nothing wrong with it, and even when I crawled underneath to inspect what I thought would be a rusted-out chassis, all I found was clean metal with no indication of hard use anywhere.

Not a single lick of rust had affected this 26-year-old car, and its 4D56, 2.5L inline 4 diesel had barely been run in at 180,000 kilometers on the odometer.

Upon speaking with its owner, he mentioned that it was 1 of only 50 base model L200’s imported into the country in 1996. I’m inclined to believe him because ever since purchasing it, I’ve seen only two others of its kind, both used by Provincial chapters of the Department of Public Works and Highways.

In contrast to mine, which had only been used to go from the house to the market all its life, they had been worn down to the bone, with one even missing a rear door.

This minter of an L200 came from Facebook Marketplace with an Open Deed of Sale as well. A chill went down my spine when I read that in the ad, but the truck was so clean and looked so well-kept I decided to give it a look anyway.

After the initial road test and inspecting the engine, chassis, exterior and interior, I asked the owner if I could check the paperwork. After a few minutes wait, he produced all the paperwork for the car, and there, the dreaded Open Deed of Sale waited for me.

Jackpot!

Unlike my first tango with an Open Deed of Sale, this one came from a company, which was owned by the owner of the truck. They had meticulously written out a Deed of Sale, and spared no detail, providing all the documentation of the purchase as well as the identification of the owner, who had signed and countersigned all of them.

And this time, the first owner was still alive, selling the car to the current owner around the start of the year.

The only thing missing was the buyer’s name, which was left blank because the owner I had bought it from had barely owned the truck for a year.

Strictly speaking, I could walk into the Land Transportation Office the next day, with Deed of Sale signed, and the truck would be in my name within the day.

The key takeaways

First, an open Deed of Sale isn’t a death sentence, as common knowledge would have you believe. When done right, it simply speeds up the process for the buyer to transfer their new purchase into their name.

That said, it shouldn’t mean that every car on Facebook Marketplace with an open Deed of Sale is a great buy. On the contrary, we should be more and more wary of people claiming to have clean paperwork with an open Deed of Sale, because it’s simply too easy to con people out of their hard-earned money.

When inspecting a used car, with or without an open deed of sale, make sure that all the paperwork is in order.

Aside from the Certificate of Registration, if there are any points of concern on the Deed of Sale, even just one, like the owner on paper is dead, or didn’t sign the Deed of Sale, or didn’t provide photocopies of identification, just walk away.

Even if it’s as simple as forgetting to sign the Deed of Sale, or countersigning the ID’s, if the seller isn’t the owner, just walk away.

It’s really not worth the effort trying to chase down every file, and photo, and procedure for a car that you can easily find a different example of. A quick rule of thumb would be if it will require a Special Power of Attorney, it’s not worth the trouble.

Points to remember

Remember to ask the seller about the paperwork. If they can’t produce it, or if it’s incomplete, that’s red flag number 1. A seller has to be able to prove they are either the owner of the car, or are authorized by the owner to sell the car.

If they can produce the paperwork, ask about a Deed of Sale. If they say they haven’t made one yet, that’s fine, but if you close on a price, make sure to ask for one that outlines your name and details, as well as the car’s details and the final selling price.

More importantly, make sure the name on the Deed of Sale matches that of the owner on the Certificate of Registration. If you’re not transacting with the owner themselves, and they’re acting through an agent or representative, make sure to ask for a Letter of Authorization too, stating that they are authorized to sell the vehicle, and that they provide their own identification too.

If the paperwork includes an Open Deed of Sale, make sure the name of the owner matches up to what’s on the Certificate of Registration, and that they’ve included everything you need to process the transfer with the Land Transportation Office.

If there’s something missing, and you’re dealing with the actual owner, then it’s not rude to ask if they may have just forgotten to provide whatever’s missing. More often than not, they’d have it on file or can immediately get it for you when you come back to pick up the car.

Be a smart negotiator

This is important – if you bring enough cash, or a check to complete the transaction, don’t show that card until you can confirm all the paperwork is in order.

If they can’t and say they’ll have it ready by such and such date, don’t give them the full amount that you’ve agreed upon, but ask them if they’re ok holding the car for you if you give them a certain amount of money to show that you’re keen to buy the car – ₱5000 as "earnest money" should suffice, but sometimes people might ask for more, at which point the amount is at your discretion.

That said, if they do have all the paperwork on hand, and can fully turn everything over to you then and there, then you’ve hit the jackpot and you can proceed to close the transaction. It’s rare, but it does happen.

So, from now on, if you’ve skipped over good deals because they had open Deeds of Sale, or you’ve put way too much emotional interest in one because it has an open Deed of Sale, take these tips and put them to good use. You’ll not only appear more intimidating, which will scare any potential con artists, you’ll also command more respect during the negotiation process.

Knowing your stuff, or at least looking like you do, is a powerful tool that many people underestimate, but you can use to your advantage.