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What is the difference between an Agreement for sale and a Sale Deed? Is it necessary to enter into a Sale Agreement with a seller ?

- by Suresh, Bangalore

Though an Agreement for sale and a Deed of Sale relate to purchase of property, there are difference between them. Sale of an immovable property is usually preceded by an Agreement for Sale. The subsequent Deed of Sale is based on the Agreement for Sale. Agreement for Sale is a very important document. It records the understanding reached between the parties, which is binding on both. After making preliminary enquiries, the parties with or without their advocates sit and discuss the price and other terms and conditions and thereafter these are incorporated in the Agreement for sale. The main ingredients of  Agreement for Sale are the price consideration, accurate description of the property to be purchased and mode of payment, cost of transfer, specific enforcement and penalty clauses in case of default. An Agreement for Sale protects the interest of both parties. It may be written or oral. The seller cannot alienate the property through an Agreement for sale.

A Deed of Sale is a written document executed between the buyer and the seller. It narrates in brief how the seller got the property, at what price he is selling the property, the sale consideration amount received, his assurances to the Purchaser that the property is unencumbered and in case of any claim the purchaser will be indemnified. Both seller and purchaser shall execute the sale deed. A sale Deed must be registered. After registration and receipt of the balance consideration amount in the presence of witnesses, the property stands transferred to the purchaser.


These are all the legal questions answered by Advocate S.Selvakumar in various magazines, in various occasion including realestate reporter monthly.