When it comes to real estate transactions, there are two common legal documents used to transfer ownership of property: the sale deed and the agreement for sale. While both documents serve a similar purpose, there are significant differences between the two that are worth understanding.
What is a Sale Deed?
A sale deed, also known as a conveyance deed, is a legal document that transfers ownership of a property from the seller to the buyer. It is a proof of ownership and serves as a valid legal document in case of any disputes or claims related to the property.
Once the sale deed is executed and registered, the ownership of the property is transferred in the buyer`s name. This means that the buyer becomes the legal owner of the property, and the seller no longer has any rights on the property.
What is an Agreement for Sale?
An agreement for sale, also known as a sales agreement, is a legal document that outlines the terms and conditions of a property transaction between the seller and the buyer. It sets out the terms of the sale, including the price, payment schedule, possession date, and other terms and conditions.
Unlike a sale deed, an agreement for sale does not transfer ownership of the property from the seller to the buyer. It is a contract that outlines the terms of the transaction and serves as a legal proof of the agreement between the parties.
Once the sale agreement is executed, the buyer typically pays a portion of the price as an advance, and the seller hands over the possession of the property to the buyer. The ownership of the property is transferred to the buyer only after the sale deed is executed and registered.
Differences between Sale Deed and Agreement for Sale
The main difference between a sale deed and an agreement for sale is that the former transfers ownership of the property, while the latter is a contract that sets out the terms of the sale.
Another significant difference is that the sale deed is a final legal document, while an agreement for sale is a preliminary document that precedes the sale deed. The sale agreement outlines the terms of the sale, including the price and payment schedule, while the sale deed serves as proof of ownership and transfers the property from the seller to the buyer.
In conclusion, it is important to understand the differences between sale deed and agreement for sale when it comes to property transactions. While both documents are essential, they serve different purposes and must be executed and registered as per legal requirements. A professional can help create accurate and informative content that provides clarity on this subject for readers.