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

- by Sanjay, Murugeshpalya

Though an Agreement to Sell and a Deed of Sale relate to purchase of  property there are differences between these two. Sale of an immovable property is usually preceded by an Agreement to Sell. The subsequent Deed of Sale is based on the Agreement to Sell. Agreement to Sell 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 to Sell. The main ingredients of Agreement to Sell 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 to Sell protects the interest of both parties. The seller cannot alienate the property through an Agreement to Sell.
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 pur¬chaser 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.