Resale Property sale agreement features
1. Token money/Earnest money:
This is a token payment made to the seller to show their good faith in a transaction. Earnest money is useful in real estate transactions. It gives the buyer an additional time frame to arrange the balance. He forfeits any earnest money he has received from the seller if he does not make the balance payment by the agreed time.
Sellers may insist that the details of the sale agreement should include this information. If this is the case, ensure that everything is clearly stated along with the date when payment must be made. It is also important to clearly mention the amount that was received as token money. Payment by demand draft or cheque is appreciated.
It is important to mention in any agreement that while you will be purchasing property if the seller pulls out of the deal, he will not only pay the earnest money back but also compensate the buyer substantially
What can you do
Before you agree to the purchase, assess your ability to pay the balance amount by the deadline. You can pay a very small percentage as an advance. so You won’t lose much even if you have to cancel the deal. It is ideal for you to specify the circumstances in which you can withdraw from the deal without losing any token amount.
for eg, You might find that the carpet area you claimed is not as large or that there are structural problems.
2. You cannot inspect the property. No access to the property –
You may want to inspect the property again. You may not find it satisfactory after a single inspection and need an expert to help you. Your family members may also want to visit the property. If there is a no-access clause in the agreement, this won’t be possible. You cannot force the seller into allowing you to enter the house until making the final payment. You should have the right to inspect the property before registration.
What can you do
The seller might not prevent the buyer from visiting the property again if it is vacant. It can be difficult to visit the property if there is a tenant. The agreement must specify the time you can visit the property. It is imperative to ensure that the property is not in use before registration. Sometimes, a tenant or owner may refuse to vacate the property once he has the money.
3. As is where is condition
You may see an advertisement for bank auctions regarding property sales that states “as is, wherever is”. Banks don’t usually spend money on property repairs. The sale of such property will be made on an “as is, where it is” basis. This means that the property is sold in its present condition as it is. Before participating in the auction, the buyer may inspect the property.
However, on completion of the deal the seller will not be responsible for any damage or loss that might occur after the sale.
4. If the property is vacant or on lease – For commercial properties, a lease agreement can be made for some time. You must include the lease details in your agreement to sell if you are purchasing such property.so that the change in ownership does not create problems either for the buyer or the lessee This will ensure that there is clarity between the buyer & the lessor. It would help if you also mentioned who will receive the rent. There may be an agreement that the seller will get the rent until the lease ends. the contract must clearly mention all the details.
What can you do
It is advisable to have the property vacated before the execution of the sale deed. You should make sure that there are no ambiguities regarding who will get the rent. Send a notice to the current tenant to request that they vacate the property if you want to hire a new tenant. The agreement should also clearly state the date that the lessee must vacate the property.
5. Mention if the property has been mortgaged to the Bank
Sometimes, you might be able to purchase a property that is under a mortgage with a bank or non-banking finance company. A seller might have taken out a loan against the property or a housing loan. Purchasing such a property may be difficult as it involves the lender as third party.
There are two options:
The seller can repay the loan and may execute a sale deed
Or, he can use the advance money you paid to repay the loan.
The Bank can then release the original papers. Sometimes, the seller may not have enough funds and ask you to close your loan.
You may be able to take a home loan from the same Bank that the seller. The Bank will adjust the loan and transfer the money to the seller’s account. Even if you choose another bank, the new one may also be able to disburse your loan to the seller’s loan account.
However, it might ask for a security or third-party guarantee until you register your property. You can execute a sale agreement with the seller and deposit it at the Bank after closing his loan. make sure to include all details about the loan in the agreement. It would help if you also mentioned that you have fully paid off the loan under the no-dues clause.
6. You must check if there are any outstanding unpaid dues.
Normally, the agreement to sell stipulates that the property is free from any dues. If any dues do occur, they will be paid by the seller. This means the property is free from any pending dues, such as society maintenance charges, utility bills, taxes, or loans. Before the seller executes a sale deed, make sure they have paid all dues.
Always verify the most recent water and electricity bills. Check to see if any outstanding payments, such as house tax or lease money, are made. Before you sign the contract, check with the housing society if there are any outstanding charges. If there are outstanding dues from the flat owner, the society might refuse to issue a no-objection certificate. This could hinder the smooth transfer.
