Agreement to Sell

What is an Agreement to Sell?

An Agreement to Sell (also called Agreement for Sale or Sale Agreement) is a preliminary legal contract executed between the buyer (purchaser) and seller (vendor) of a property. It records the mutual agreement to sell/purchase a specific property in the future under agreed terms.

Unlike a Sale Deed, an Agreement to Sell does NOT transfer ownership of the property. It only creates an obligation on the parties to complete the sale in the future. Ownership transfers only when the actual Sale Deed is registered.

Under Section 54 of the Transfer of Property Act, 1882, a contract for sale of an immovable property does not by itself create any interest in or charge on the property.

Agreement to Sell vs Sale Deed

Aspect	Agreement to Sell	Sale Deed
Purpose	Commits to future sale	Transfers ownership immediately
Ownership transfer	❌ No	✅ Yes
Registration	Optional but advisable	Compulsory
Possession	Usually with seller	Transferred to buyer
Stamp duty	Lower (flat/nominal)	5% of market value
Risk	Seller may default	Transaction complete

Why Execute an Agreement to Sell?

• Protects the buyer: Secures the property during loan processing or due diligence period
• Protects the seller: Token amount received ensures buyer's commitment
• Allows time for the buyer to arrange finances or obtain home loan
• Enables due diligence — verify title, search for encumbrances, etc.
• Legally binds both parties to complete the transaction on agreed terms
• Provides remedy — specific performance can be enforced in court if a party defaults

Essential Clauses in an Agreement to Sell

• Full names, addresses, and PAN numbers of buyer and seller
• Complete property description — survey number, area, location, boundaries
• Agreed sale price (total consideration amount)
• Token/Advance amount paid at time of agreement
• Timeline for completing the sale (e.g., within 90 days)
• Conditions precedent — loan approval, clearances, etc.
• Penalty for default by either party
• Possession date and conditions
• Property to be free from encumbrances declaration
• Seller's warranty of title and ownership

Documents Required

Document	From
Aadhaar Card	Buyer & Seller
PAN Card	Buyer & Seller
Property title documents	Seller
Encumbrance Certificate	Seller
Approved plan / Building permissions	Seller
Passport-size photographs	Both
Loan sanction letter (if applicable)	Buyer

Is Registration of Agreement to Sell Mandatory?

Stamp Duty in Maharashtra

For an Agreement to Sell in Maharashtra where possession is NOT transferred:

• Stamp duty: 0.1% of the total consideration or ₹500 (whichever is higher)
• If possession is delivered along with the agreement: stamp duty is same as Sale Deed (5%)
• Registration fee: ₹1,000 to ₹30,000 depending on value

Our Process

1. Share property and party details with us
2. We review the title documents and prepare a comprehensive agreement
3. Both parties review and negotiate terms through us
4. Stamp duty assessed and e-stamp paper procured
5. Agreement signed by both parties in presence of witnesses
6. Registered at Sub-Registrar Office (if registration opted for)
7. Certified copy delivered to both parties