Difference between Agreement of Sale and Sale Deed

May 28, 2023

Difference between agreement of sale and sale deed

Dear Readers,

The above ownership documents are the most basic and essential part of any real estate buying-selling transaction in Maharashtra which is one of the most important states of India including cities like Mumbai (Business Hub), Pune (IT Hub), Nagpur, Nasik, etc. Having GDP of more than 400 Billon dollars makes this State one of the best investment destinations.

Please note that “Agreement of Sale” also called “Sale Agreement“

Sale Agreement / Sale Deed: Most people think that both of these property ownership documents are the same however both are quite different significantly in legal meaning.

Now, you may find several articles on the above subject with a lot of technical information & jargon, still I thought to write on this topic trying to write in very simple language which will be easily understandable to an ordinary person because recently one of my NRI clients whose property is on sale asked me to explain the difference between “Agreement of Sale” and “Sale Deed” because most of the properties, “Agreement of Sale” is executed however “Sale Deed” is missing and not given the necessary attention.

I would also like to clarify that I am just sharing the overall concept of these two documents with my observations gained in a decade & half’s experience dealing with such real estate transactions, however it may vary and require detailed legal opinion from professional experts/lawyers to advice on every individual property transaction.

WHAT IS SALE AGREEMENT? :

“Sale Agreement” is document which executed at the time of purchasing any property and having both buyer & seller details, property details, many other agreed legal clauses & agreed property price where most important point is payment of total property price to be paid in part and in future date. mostly sale agreement is executed when property bought in under construction and payment to be done as per construction stages till property gets ready. “Sale Agreement” also attracts government stamp duty on sale value mentioned in the agreement & to be registered in local jurisdiction registration office by paying registration fee.

WHAT IS SALE DEED? :

“Sale Deed” is document which normally having same content mentioned in “Sale Agreement” but in brief manner and sale deed executed mostly in 2 cases:

Case 1) When Under construction property gets completed: “Sale Deed” is follow up & final document which to be executed when under construction property gets ready and purchaser of property pays full & final amount to builder mentioned in “Sale Agreement” in a form of construction stages so with this document both buyer & builder agrees to conclude & transfer of property to buyer. also, as stamp duty was already paid earlier while executing “Sale Agreement” so sale deed to be simply executed with minimal registration fee.

Case 2) Resale Ready to use property Sale: mostly, “Sale Deed” is executed in ready to use properties in resale transactions. in this case, “Sale Deed” is only single document to be executed and it mentions having both buyer & seller details, property details, many other agreed legal clauses & full payment made at the time of registration and immediately after executing the registration, property will transfer to buyer. it also attracts government stamp duty on sale value mentioned in the agreement & to be registered in local jurisdiction registration office by paying registration fee.

Exception:

there is only one exceptional situation where “Sale Agreement” also executed in resale ready to use property when buyer takes bank loan from Bank (mostly public government banks) and mentions “Sale Agreement” period of 2-3 months to pay the payment of total property value then when bank release bank loan amount, sale deed executed to conclude the transaction. in this case, stamp duty paid calculated percentage of property value at the time of “Sale Agreement” registration and “Sale Deed” to be simply executed with minimal registration fee.

Suggestion:

in case of purchasing under construction property, normally, most of the property buyers only have “Sale Agreement” and forget to get sale deed done after property gets ready as builder gives first possession letter at the time of completion of property and “Sale Deed” done by builder when entire project gets completed therefore purchaser of property should keep following builder till project gets completed and execute “Sale Deed” to have full ownership documents.

Further, We are also professional real estate consultant having experience of more than decade & half and can assist in entire process related to PROPERTY IN INDIA and can be a complete one stop solution of above discussed various procedures and even assist in getting following services with our collaboration with very experienced legal advisers to conclude any such transaction smoothly.

OUR BROKERING SERVICES:

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UNDER-CONSTRUCTION PROJECTS

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it requires extensive research and experience to choose best available option at the given time as opportunity always keep changing. in this case, we can assist prospective buyer in 2 ways:

Option 1) Pure consultancy on fixed fee basis: in this way, we will assist buyer to find best project and property as per his preferences & budget as buyer may already reached to builder & negotiating so we can not be paid by builder so in this case fixed fee will be charged to buyer in advance before giving the consultancy then buyer can directly approach to builder to finalize the property.

Option 2) We involved as a Brokering company: in this way, prospective buyer will visit through us to each project and we will be registered reprsentative with builder for buyer so in this case, buyer has to pay nothing for our same consultancy services which we were giving in above option 1, even we will refund fee which we receive from buyer for option 1.

ADDITIONAL CONSULTANCY SERVICES:

PREPARING REPORT OF ALL RESIDENTIAL / COMMERCIAL PROJECTS IN SPECIFIC LOCATION OF MUMBAI OR PUNE CITY & ADVISING/ASSISTING INDEPANDENTLY TO PURCHASE BEST PROJECT FOR ENDUSE OR INVESTMENT.
helping missing property documents index2, purchase/sale agreements in PUNE city only.
PAN card for any NRI / PIO without visiting India,
Assistance in reducing TDS on sale of property legally (ENTIRE INDIA)
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hope able to explain our point of view, still any query, please contact anytime on given contact number for detailed Discussion, cell no./whatsapp # +91-9822052388 / +91-7498829332, Email: deepaksundrani@thegururalty.com.

There are many Advantages & Benefits to hire professional consultant which can be experienced only after hiring right person.

Rest assuring here that we work very ethically, honestly and professionally and for us, our client interest is utmost and foremost then anything else. We have already successfully assisted many NRI’s, EXPATS INVESTORS & LOCALITIES to purchase property in both Mumbai & Pune cities as per their requirements & preferences and most of them are with us to manage their properties through us only so one can judge the level of trust & integrity we have in our work & services.

Thank you very much for reading my article as here intention is to share information and enhance knowledge for each & everyone for the betterment & provide more transparency in real estate sector.

wishing everyone good health and happyness.

Warm Regards,

Deepak Sundrani