If you are selling your property and the buyer is availing a home loan, your role is crucial in ensuring that the transaction proceeds smoothly. Based on my professional experience, here is a step-by-step guide outlining your responsibilities during the sale process:
- COLLECT TOKEN ADVANCE
Once the buyer finalizes your property, collect a token advance of Rs.5,000 to Rs.10,000.
This serves two purposes:
- It confirms the buyer's seriousness.
- It prevents unnecessary sharing of documents with uninterested parties.
- PROVIDE PROPERTY DOCUMENT COPIES
Hand over photocopies (not originals) of the following documents to the buyer. These will be submitted to the bank for legal verification:
- Registered Sale Deed & Parent Deed
- Latest Encumbrance Certificate (EC)
- e-Khata
- Latest Property Tax Receipts
- Home Loan Closure Certificate (if previously mortgaged)
- Cancelled Cheque (for refund purposes, if needed)
- Aadhaar & PAN Card (of all sellers)
- REVIEW THE DRAFT SALE AGREEMENT
Once the bank’s legal team approves the documentation, the buyer’s advocate will prepare a draft Sale Agreement and share it with you.
As the seller, review the draft carefully, especially:
- Names, age, and address of parties
- Government ID details
- Property schedule (with accurate measurements and boundaries)
- Consideration amount and payment terms
- TDS/tax responsibilities
- Cancellation and dispute resolution clauses
- SIGN THE SALE AGREEMENT & COLLECT DOWN PAYMENT
The buyer bears the cost of Sale Agreement execution, including stamp duty and legal fees.
During the signing, you must collect the down payment from the buyer. Usually, the download payment is the difference between the consideration amount and the sanctioned loan amount
Example:
Down Payment = Total Consideration – Sanctioned Loan Amount
Total consideration: ₹1 Crore
Sanctioned loan: ₹80 Lakhs
Down payment: ₹20 Lakhs
- BANK LOAN PROCESSING AND SALE DEED DRAFTING
- The buyer formally submits the loan application and the signed Sale Agreement to the bank.
- It typically takes around 15 working days for the loan to be sanctioned.
- Meanwhile, the buyer’s advocate will share a draft Sale Deed with you for review.
- LOAN SANCTION AND DISBURSEMENT READINESS
Once the loan is sanctioned:
- The bank shares the cheque image or DD details with both buyer and seller.
- This confirms the loan amount is ready for disbursal.
- REGISTRATION OF SALE DEED AND MODT
The buyer books the registration slot and bears all associated costs: stamp duty, registration fees, advocate charges, and other expenses.
At the Sub-Registrar’s Office, the Sale Deed is signed and registered by:
- Buyer
- Seller
- Two Witnesses
Immediately after, the Memorandum of Deposit of Title Deed (MODT) is registered by the buyer, usually as a back-to-back registration after sale deed
- DEPOSIT OF DOCUMENTS WITH BANK
After the registrations:
Both buyer and seller must visit the bank and submit the following:
- Registered Sale Deed
- MODT Document
- Parent Deed
- Any supporting property documents (Sale Agreement, Khata, POA, tax receipts, etc.)
- RECEIVE FINAL PAYMENT FROM BANK
Once documents are deposited, the bank will release the final settlement cheque in your name.
- Deposit the cheque in your bank account for credit.
- Wait for the payment to reflect before handing over possession.
- HAND OVER PROPERTY POSSESSION
After the full payment is credited to your account, formally hand over the possession to the buyer.
NEED ASSISTANCE?
We provide end-to-end support for property sale transactions involving home loans, documentation, and legal compliance.
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