Hi Experts,

My cousin is about to strike a sale of under construction flat deal and we have one situation...where buyer says, for balance payment he need to apply for loan.. for seller, he cannot sign until full payment is received... Am I right?

Now, how deal will proceed ?

As far as I know -

1. We shall take token and sign agreement to sell
2. Apply for NOC with builder.
3. Buyer will apply for loan
4 Loan sanctioned and bank ready to make payment.
5. On mutually agreed date, banker will come with DD. We shall verify this.
6. Final transfer papers shall be sign by seller.
7. Papers shall be handed over to banker and banker will give DD to seller.


Are these steps correct specially step 2 and 5+6 ?

Before steps 5+6, seller should not sign any thing except for Agreement to Sell.

Another question, is this Agreement to sell need to be registered in court or it should be on stamp paper and notarized?
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  • Originally Posted by saihtul
    Hi Experts,

    My cousin is about to strike a sale of under construction flat deal and we have one situation...where buyer says, for balance payment he need to apply for loan.. for seller, he cannot sign until full payment is received... Am I right?

    Now, how deal will proceed ?

    As far as I know -

    1. We shall take token and sign agreement to sell
    2. Apply for NOC with builder.
    3. Buyer will apply for loan
    4 Loan sanctioned and bank ready to make payment.
    5. On mutually agreed date, banker will come with DD. We shall verify this.
    6. Final transfer papers shall be sign by seller.
    7. Papers shall be handed over to banker and banker will give DD to seller.


    Are these steps correct specially step 2 and 5+6 ?

    Before steps 5+6, seller should not sign any thing except for Agreement to Sell.

    Another question, is this Agreement to sell need to be registered in court or it should be on stamp paper and notarized?

    Hi,

    Please mention how much coloured and white amounts...
    CommentQuote
  • As per my knowledge, Sale aggrement cannot be registered. Only sale deed or power of attorney can be registered.

    Sale aggrement needs to be notorised after signing, and ofcourse it has to be on stamp paper.
    CommentQuote
  • Registration only happens after you have paid the relevant stamp duty for that document. Agreement to sale can be stamped and registered as well. And then the sale deed only needs to be registered (in some cases even that is not necessary, if the buyer has the receipt/proof of the final payment made to the seller), no stamp duty payable if stamp duty paid earlier.

    Though in this case, it is just the transfer of booking of a UC property. So the actual paperwork happens at the builder's end, he will have to create a new BBA for that flat and execute it with the new buyer.

    The best course would be for the buyer to contact his homeloan bank, and find out what they will need before handing over the DD.
    CommentQuote
  • I didnt get the highlighted part.
    I thought each buyer had to pay Stamp duty when registering the flat in his/her name.
    Do you mean there would be cases where Stamp Duty has been paid but registration not happened and hence the new buyer need not pay Stamp duty but just register in their name. Does that happen ??

    Originally Posted by humble_guy
    Registration only happens after you have paid the relevant stamp duty for that document. Agreement to sale can be stamped and registered as well. And then the sale deed only needs to be registered (in some cases even that is not necessary, if the buyer has the receipt/proof of the final payment made to the seller), no stamp duty payable if stamp duty paid earlier.

    Though in this case, it is just the transfer of booking of a UC property. So the actual paperwork happens at the builder's end, he will have to create a new BBA for that flat and execute it with the new buyer.

    The best course would be for the buyer to contact his homeloan bank, and find out what they will need before handing over the DD.
    CommentQuote
  • based on my personal exp while buying a UC property 3/4 months back

    1. We shall take token (some white and Cash) and sign agreement to sell (includes TOTAL amount, specifying how much will be paid in CASH & how much in CHEQUE. Brokers call it "Full ka Agreement" )
    2. Apply for NOC with builder & Get Outstanding/Payment made details (its like a Balance sheet)
    3. Buyer will apply for loan (Its more like Pre-approval. not specific for property he is buying)
    3.b Buyer Pays seller the complete CASH.
    3.b1 Seller & buyer destroy the Agreement they made in Point#1 (originial+copy)
    3.b2 Brokers makes now "white ka Agreement" (no mention of Cash). so, if cash is 25 L & orginial cost is 30 L...then this agreement will say on 30L to be paid in total, and how much has been paid till now (the Cheque part
    )
    3.b3 To Safegaurd the buyer, there is a penalty clause which says, if agreement cancelled the Seller pays Buyer = (30/"amount paid in white in step#1") times. So, if you paid 1 Lacs is cheque as token (while you have already paid 25L as cash in step#3.b) then it says 25 times to be paid!

    4 Loan sanctioned and bank ready to make payment. (here the Buyer gives the bank the agreement made in Step#3.b2 & then bank decides how much can be MAX disembursed)

    5. On mutually agreed date, banker will come with DD. We shall verify this.
    6. Final transfer papers shall be sign by seller.
    7. Papers shall be handed over to banker and banker will give DD to seller.
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  • Let me make you very happy by saying that, “it is always a buyer who needs to be extra cautious and luckily you are on the other side if coin”.

    What is you objective? you must get your requested amount which has been agreed by Buyer. just take the token fist always so that buyer would stick to your property then sign the agreement to sell, preferably mentioning total amount so that both side’s interest is well safeguard. Sign rest only when you received full payment by any of the mode like Cash, DD etc.

    Ask about the transfer charges and I hope you must have conveyed buyer that who is going to pay for the same.
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  • Originally Posted by sh-saxena
    I didnt get the highlighted part.
    I thought each buyer had to pay Stamp duty when registering the flat in his/her name.
    Do you mean there would be cases where Stamp Duty has been paid but registration not happened and hence the new buyer need not pay Stamp duty but just register in their name. Does that happen ??


    my earlier statement meant, if "agreement to sell" has been duly stamped then the "Sale Deed" need not be stamped again. you can register the stamped agreement to sell and it would be considered as a valid legal document if you keep receipts of any future pending payments that were to be made.

    There are many rules related to stamp duty. It can even be claimed back from the govt if the sale falls through.

    By the way, without payment of stamp duty, the sale document has no legal validity e.g. MoU, "Full ka agreement", etc. etc. they are just pieces of paper, no court will consider them as title to property.


    PS: Though what you are saying is technically true, the govt has no way of knowing who paid the stamp duty.
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