How to buy an already mortgaged house property with one's own savings?

2 years ago

Dear Madam/Sir,

I wish to know how a buyer should purchase an already mortgaged residential independent house with his own savings safely. The said property is mortgaged for business purpose with "HDFC Home Loans", a housing finance company since the seller is a business owner. I am aware of the below mentioned options available to execute the said transaction as per my limited legal knowledge:

A. The seller is advising the buyer to register an "agreement for sale" with the Sub-Registrar's office and thereafter, repaying the outstanding loan amount to the lender in the borrower's loan account maintained, after that the lender would release the original property papers including the sale deed in favour of the seller/borrower and issue a No objection certificate with a no dues certificate. Now, the buyer will pay the balance part of sales consideration on the day of sale deed registration to the seller and the seller will transfer the house on the same day. The outstanding loan figure is 50% of the sales consideration being demanded by the seller.
A.1 Is this correct to attach a clause of heavy monetary penalty to the registered sale agreement dealing with a default in performance of obligations, if any, committed by either the seller or the buyer, ideally what should be its quantum?
A.2 Is stamp duty paid at the time of registering a sale agreement adjustable from the stamp duty that will be paid at the registration of sale deed?
A.3 Will a "registered agreement to sell" serve as a legal deterrence for the borrower/seller to abide by the agreed terms?


B. Is it a general practice that the borrower/seller, the buyer, and the lender enter into a tripartite agreement to give effect to the above transaction? How is this agreement generally executed? Would lender safeguard the buyer's interest? How will the buyer's interest be protected with a tripartite agreement?

If any other safer option available to buy such a property, kindly apprise me of the same.

NOTE: The property is situated in "Uttar Pradesh".