A property sale agreement is a legal document that focuses on terms and conditions that the buyer and seller agree upon. You may need assistance at times while dealing with sales agreements. This blog will help you understand the property sale agreement, clauses, and process.
What is a property sale agreement?
The property sale agreement is a legal contract between the buyer and the seller that contains the conditions and terms that the buyer should abide by to purchase a real estate transaction.
The sale deed summarizes the details both parties agree to and the proper signature before transferring the property. It plays an important role as it is the legal agreement for the property sale.
The sale agreement covers certain key elements like:
- The property details: Clear address, identification number, and legal description.
- The total amount the buyer has to pay to the seller.
- The closing date.
- The details of the ownership transfer.
- The conditions present in the property sale agreement.
Why is a sales agreement important?
The sales agreement is important as it outlines the terms of the sale, including the payment and sales conditions, and is a legal document that protects both the seller and the buyer.
A sales agreement ensures that the seller and buyer agree to individual conditions. It helps to maintain relationships, and the document can be submitted as proof in case of any dispute.
In short, a sales agreement is an important tool that facilitates easy transactions and protects the interests of both parties.
Clauses That Go into an Agreement to Sell
The sales agreement is important, especially in the complex real estate scenario. Some important clauses that must be present in the agreement include:
Identification Certificate
Both parties (the seller and the buyer) must bring valid proof of identification containing the full address and contact number.
Details of Property
Details of Property in an agreement to sell refer to the comprehensive information about the property being transacted. This section includes:
Residential Address:
The full address of the property, including the street name, number, locality, city, state, and postal code. This ensures there is no ambiguity regarding the exact location of the property.
Property Description:
A detailed description of the property, which may include the type of property (e.g., apartment, villa, plot), the size (e.g., square feet or square meters), the number of rooms, and any unique features or amenities (e.g., garden, parking space, swimming pool).
Legal Description:
The legal description of the property as per the municipal or local authority records. This includes details like plot number, survey number, registration district, and any other specific identifiers used in official records.
Ownership Information:
Details about the current owner(s) of the property, including the name(s) of the seller(s). This section confirms the ownership and ensures that the seller has the legal right to sell the property.
Buyer Information:
Details about the buyer(s), including full names, addresses, and contact information. This establishes who the buyer is and provides necessary contact details.
Terms and Price of Sale:
The agreement is made upon specific terms and price that the seller and buyer have agreed upon. Hence, the terms involve deadline, balance due, and down payment details.
Risk of Loss:
Before the property transfer, the party that bears any risk of loss should be determined and mentioned in the agreement.
Title:
The title in the sale agreement determines who holds the property after ownership.
Closing and Transfer:
It is important to choose a closing date to transfer ownership. Additionally, fixing the specific information plays a crucial role in legal documents.
Clauses to Pay Extra Attention to in a Sales Agreement
Paying attention to certain clauses can help both parties proceed smoothly with the conditions of the agreement.
Clauses to look after in a sale agreement include:
- Termination clause: It focuses on the conditions that can be terminated when a party breaches the contract.
- Indemnification clause: It determines the party responsible for damage in liability or any damage in total.
- Confidentiality and dispute handling clause: This clause outlines how to handle the consequences of disagreements in arbitration or negotiation.
The entire clause of the agreement should contain all the details agreed by the buyer and the seller, which should be legally sealed and abide by the laws of the jurisdiction.
Sales Agreement for Commercial Property
A commercial sale agreement contains the legal contract that a buyer and seller agree to exchange for money. The document outlines the details of the property, location, and description of obligations until payment and transactions.
The agreement lists the price of purchase agreed upon for the property, including the earnest money and final deposit. Additionally, the commercial property contains clauses in which the buyer accepts the property as it is, and the seller agrees to no warranties.
Once the buyer finalizes the property after a period of inspection, the property will be legally stamped and transferred after full payment.
Process of Executing a Sale Agreement
The process of executing a sale agreement is listed below:
Agreement draft
A lawyer or a real estate agent should draft the agreement. The draft agreement contains the address, name, price of sales and payment terms, completion time, each party’s responsibilities, and dispute resolution process.
Finalizing the agreement
Once the agreement draft is completed, both parties carefully review it. The contract will be finalized upon both parties’ verified signatures.
Signing and execution
Both parties must sign the agreement to sell the property upon visiting the location.
Registration
The registration process is not always mandatory but will give you total control over legal security. Registering a commercial property is a legal document that is evidence in dispute cases.
Conclusion
A property sale agreement is important when dealing with a property transaction. Having adequate knowledge of what goes into a property sale agreement will help you avoid scammy deals. In case of doubts and deeper understanding seek the help of a legal advisor and move the process according to the legal terms.
A Property Sale Agreement and a Power of Attorney for Property are both legal documents used in real estate transactions, but they serve different purposes and have distinct roles in the process.
Consider crucial clauses such as termination, indemnification, confidentiality, etc. Ensure that all clauses have a proper legal basis. Always make sure to visit the location and study the agreement before proceeding.
FAQs
1. Why is a sales agreement important?
A sales agreement is a legal document that can be submitted as proof of any arising dispute. Hence, it plays an important role in case of any breach of the papers.
2. Is the process of sales agreement across all states in India?
The sale agreement for a commercial property remains the same across India. It comprises the sale price, payment terms, property description, and possession dates.
3. Who can I trust to make my agreement to sell a property?
A lawyer specialized in guiding property sale agreements can help you with the deal. So, make them deal with the sale agreement till the end.