Agreement of sale of property be registered with token amount payment by buyer
4 years ago
In property transaction involving resale of existing property below are major milestones,
1 token amount payment by buyer to seller
2 Registration of 'Agreement to Sale'
3 With copy of 'Agreement to Sale' and other documents buyer submits his home laon application with his bank
4 Payment of 'Own contribution' by buyer to seller in single or multiple payments. This can span over period. Minimum such period is time taken by his bank for approval of his home loan if allowed for loan approval (and not disbursement).
5 Approval of buyer's home loan by bank after all checks. Banks do take anywhere between 10 to 20 days for approval of home loan after property search and other formalities.
6 Submission of receipts by buyer with buyer's bank of all payments made by buyer to seller under 'own contribution' roughly 20% of agreement value
7 Issue of cheque by buyer's bank with amount matching with principal amount of seller's home loan account
8 Seller submitting the cheque received from buyer under #7 above with his home loan bank and closes his home loan account
9 Seller's bank returning all original property documents to seller
10 Seller handing over all original property documents to buyer
11 Buyer submitting all original property documents received from seller with his home loan bank
12 Buyer's home loan bank handing over photocopy of final disbursement of loan amount cheque
13 With photo copy of final disbursement cheque, buyer and seller registering 'Sale Deed'
15 Buyer submitting 'Sale Deed' original copy with his home loan bank to collect final disbursement of loan amount cheque
16 Buyer handing over final disbursement of loan amount cheque to seller and seller handign over property subject to clearance of cheque
If buyer's bank requires proof (receipt) of his own contribution (payment to seller) only at the time first disbursement of home loan, buyer has liberty to use time period between 'Agreement to sale' and approval of his home loan by bank to make multiple payments to seller to complete his 'own contribution (20%)'
By definition 'agreement of sale' is agreement of next steps to complete transactions between buyer and seller, the payment milestones can be during few days from the date 'agreement of sale' is registered.
Question is - Is it must that 'agreement of sale' should be done only when buyer has paid considerable' amount' to seller? In extreme case why can't it be just with token amount?
Always agreement of sale will be registered on token payment of atleast 10% of the total sale consideration.
Look any amount can be considered to move on for executing the agreement to sale but that has to be agreed by the parties. Better you speak to parties who are to execute the agreement to sale.
Anonymous
Replied 4 years ago
Thanks for your quick response.
For me the property is yet to be vacated by existing tenants. He will vacate but when is a question.
And I do not want to pay all my 20% own contribution upfront, get bank loan sanctioned and keep waiting for tenant to vacate!
Ideally doing sale agreement with property vacant would have been best way. But that might take a month.
Without sale agreement I cannot apply for home loan.
Agent is suggesting that without considerable amount, sale agreement is not done. To which I responded it is typical trend established by system (including agents) Agent also agrees to risk I am carrying if I pay whole my contribution upfront before tenant vacates.
In layman's terms agreement to sale is list of terms on which both parties agree to take forward and close a deal. So payment milestone can be within few days after agreement to sale.
I conclude from your inputs that as far as both parties are agreeing on acceptable amount, sale agreement can be done!
Once more question - Is it Sale agreement, Sell agreement, Agreement to sale or Agreement to sell, I found all combinations
Abhimanyu Shandilya
Replied 4 years ago
Your case is not more clear then the original question. Since the agent (Property dealer) is saying this my personal suggestion don't give lot of money for consideration as you would put yourself into greater risk. anything less than 10% of the total value is good enough to go ahead. If he is insisting for more then beware...
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