A Sale Agreement is a Preliminary agreement between Seller and Buyer. It outlines the terms and conditions of Sale and safeguards the interest of both parties. It contains all the essential elements such as:
- Date and place of agreement execution
- Seller & Buyer name, age, address, and identification proof
- History of the transaction (previous owner details)
- Buying price, payment terms, and TDS
- Property Schedule includes flat number, measurement of flat. apartment name, village name, Taluk, Hobli, and District
- Timeline to complete the Sale Deed Registration
- Cancellation clause
- Dispute and Jurisdiction clause
- Two witnesses’ details
OBJECTIVE: We are going to cover the following topics which will give a wholistic understanding of Sale Agreement for a resale flat in Bangalore
- Documents Required for Sale Agreement
- Basic validation of documents for Sale Agreement
- Sale Agreement Execution
- Stamp Duty for Sale Agreement
- Cost of Executing a Sale Agreement
- Denotation of Stamp Duty
DOCUMENTS:
The seller should provide the following documents for Sale Agreement execution
- Parent Deed
- Sale Deed
- eKhata
- Property tax receipt
- Aadhaar
VALIDATION:
Buyers must do the basic validation of documents and we can do the below validation at the comfort of your home.
- Extract the Encumbrance Certificate (EC) on Kaveri Online Services: Extract the EC since the 1st Parent Deed registration. EC provides a list of all transactions related to property
- Extract Deed certified copies on Kaveri Online Service: Extract the certified copy since the 1st parent deed registration. The sequence of ownership from the 1st parent deed to the current deed should be in chronological order, continuous and unbroken
- Extract ekhata on eAasthi website to check the current ownership of the property and validate the ekhata on Kaveri Online service using ePID
- Extract the current financial year property tax receipt from the respective municipality’s website
It costs less than Rupees one thousand to extract EC, CC, and ekhata and it takes around 5 working days to get signed copies. These validations might save you from fraud deals
You must hire a lawyer for critical validation, such as disputes and auction properties. Lawyers can meticulously verify the documents, and advise the potential pros and cons which would help us with proactive decision-making
EXECUTION:
We can make a Sale Agreement in three different ways, they are:
- Sale Agreement by Registration
- Sale Agreement by Adjudication
- Sale Agreement by Non-Judicial e-stamp
In this answer, we will cover only the Sale agreement by non-judicial e-stamp paper. Refer to the below execution procedure
- Draft the Sale Agreement
- Share the draft with other party for draft confirmation (usually buyer makes the sale agreement hence the buyer must get draft confirmation from the seller)
- Buy a non-judicial e-stamp paper in a co-operative bank or near the sub-registrar office or court premises. You need the following information to buy an e-stamp paper
- Description: Sale Agreement for Immovable property (when you purchase e-stamp paper for Sale Agreement, you must insist to the stamp vendor that you need a Sale Agreement for immovable property. Most often don’t specify immovable property and they end up generating the wrong e-stamp paper for movable property which could be the costliest mistake)
- 1st Party: Seller Name
- 2nd Party: Buyer name
- Purchased by: The person who purchases the e-stamp paper
- Consideration Price: Buying Price
- Print the 1st page of Sale Agreement Draft on non-judicial e-stamp paper and use plan A4 size with at least 100GSM paper to print consecutive pages of Sale Agreement
- Seller, buyer, and Two witnesses sign the Sale Agreement
A Sale Agreement looks like the below image and we highlighted the Description for your understanding
STAMP DUTY:
The Stamp Duty for sale Agreement is 0.5% of the buying price
For Example: The buying price is Rs. 64 lakh
Stamp Duty for Sale Agreement is Rs. 64,00,000*0.5% = 32,000
COST:
Below is the cost incurred for me to execute the above Sale Agreement
- Stamp Duty: Rs. 32,000
- e-Stamp paper processing fee at co-operative bank is 5% of stamp duty that Rs. 32000 * 5% = 1600
- Paper and printing: Rs. 100 (approx.)
- Total cost Rs. 33,700/-
LEAD-TIME:
Time taken to execute the above Sale Agreement for me:
- Drafting and draft confirmation with seller: 1 day (productive time is around an hour)
- e-stamp paper purchase and Sale Agreement printing: 1 day (productive time 30 minutes)
- Seller, buyer, and two witnesses sign: 1 day (Productive time is 30 minutes)
The total time taken to execute the above Sale Agreement is 3 days (productive time is ~ 2 hours)
DENOTATION:
The Stamp Duty paid for Sale Agreement is offset in the stamp Duty payable for Sale Deed
For Example:
- The Stamp Duty for Sale Agreement is Rs.32,000
- The Stamp Duty for Sale Deed is Rs. 3,20,000
- The actual stamp duty payable for Sale Deed registration is Rs. 3,20,000–32,000 = 2,88,000/-
At the time of Sale Deed registration, Select the Denotation of Stamp Duty in your application to offset the Stamp Duty
We assist Sale Agreement for resale flat, please write to us pgnproperties@gmail.com or Whatsapp +91-97424-79020
Thank you for reading…