Why Does a Sale Agreement a Crucial Document When Buying a House?

If you buy a house, you must have facts about the sale agreement to get the property smoothly.

A house sale agreement is a legal contract regulating the mutual promises made by the seller and purchase. The evidence of the sale and purchase of immovable property (house) is proven by this formal document. The written promise to transfer the immovable property for consideration (money) is contained in the legal document known as the sale agreement.

The transfer and payment conditions and penalty for non-transfer of the house in question or non-payment of consideration are recorded in the sale agreement. The details of how the current owner has acquired the title, Katha and Katha number, property identification number, all approvals from government authorities, outstanding charges, encumbrance details, etc., are essentially mentioned in the agreement.

Sale Agreement Essential Elements

Based on the Sale of Goods Act of 1930, experts find that certain elements must be present for the sale agreement to be valid. They are specified below:

  • Both parties must be present. At the least, two parties must be present in the contract of sale, as is the case with any contract. One shall play the role of a seller and the other as a purchaser.
  • The scope of the clauses noted in the sale agreement must be limited to the movable property only. Existing goods, goods in the seller’s possession or ownership, or future goods may be “movable property”.
  • Consideration of price is one of the most crucial elements. It is necessary to pay or promise a price in value (currency and not in kind).
  • The buyer must claim the ownership of the property from the seller. Similarly, as the contract elements, an offer has to be made and then accepted for the contract of sale. The seller has made an offer to the buyer, and then the buyer has accepted the proposed offer.
  • The sale agreement can either be conditional or absolute.

Similarly, as for a contract, the other essential elements of a sale agreement should be present here. Competency of parties, the legality of object and consideration, etc., are some crucial elements of a sale agreement that must be present like in any other agreement.

Legal Considerations for Sale Agreement

The clauses stating the terms and conditions between the parties are all noted down in a sale agreement which is recognized legally. Both parties must sign it on a printed judicial / e-stamp paper of the correct value. According to the State laws, it must get registered after stamping with proper value as this agreement involves immovable property.

Difference Between Sale & Sale Agreement Drawn by Statutory Provision

Following the Sale of Goods Act 1930, the sale and a sale agreement are one of its foundation concepts. The sale and agreement to sell are specifically dealt with by Section 4 of the Sale of Goods Act 1930, and the sale and agreement to sell are managed explicitly by it.

It expresses that:

  • Firstly, an agreement specifying how the merchant moves or consents to moving the property in merchandise to the purchaser at a cost is known as an agreement to sell products. An offer agreement might be present between one section proprietor and the other.
  • Secondly, an agreement to sell may be total or restrictive.
  • Thirdly, the agreement to sell is where the property exchange in the products is to happen at a future time or subject to some condition from that point to be satisfied. In contrast, a sale agreement is where the questioned merchandise is transferred from the seller to the buyer.
  • Lastly, if the conditions in which the merchandise property is to be moved are satisfied or time slips by, an agreement to sell turns into a sale.

What is the Use of the Sale Agreement?

A sale agreement about the moored property is drafted while stating a seller’s and buyer’s intent to buy and sell a particular property separately. They factor in the terms and propositions of a sale between the parties involved, and none of the parties associated with it can breach the agreement. It is a crucial step as all the rights and responsibilities of the parties involved explicitly get stated so that it should be free from shortcomings that may arise in the future.

It has several purposes, but the most important is evidential, and it protects the interests of both sides so that none of them faces discomfiture and has a factor of law involved by which it can be enforced in a court of law.

As a buyer, there are a plethora of details that you need to factor in. Some of them are: verifying documents, ensuring that the finances are in order, and restricting the time to get this work done.

All the criticalities involved in sale agreements will be taken care of by advocates so that your process of buying the house will be faster, easier, and simpler. It will ultimately lead you to a way that will not leave you standing in lengthy queues to register your sale deeds.

What Attributes Can Differentiate a Sale Deed from a Sales Agreement?

Differentiating a sale deed from a sale agreement is not an easily perceptible factor. If you think such is the case with you, it is not true because everyone makes the same mistakes while purchasing property and incurs huge losses.

So is the similarity that a sale agreement can easily get registered as a sales deed. A sale agreement incorporates several details, such as the seller and buyers’ terms to agree and the conditions for the transactions to be conducted.

A sales agreement, in essence, includes all the essential terms so that the sale deed will become conclusive. In contrast, a sale deed gets implemented when a property transfer happens, and this document has its utility when you transfer property from a seller to a buyer.

How Can a Lawyer Help in Drafting a Sales Agreement?

The most important step you can take is to hire a well-experienced lawyer to draught your document because they will be the one who is familiar with all of the legal methods and procedures in which drafting agreements of sale is involved. A lawyer has the authority to draft a sale agreement related to a house in a more proficient way than you could do it.

A lawyer has all the essential law-related knowledge and expertise to take on and get along with all such drafting databases. They are the one who works according to the facts involved in the case and the circumstances associated with it. Engaging a lawyer with expertise in legal documentation is a prerequisite and will assist you in many ways. They can also assist with the stamping and registration of the agreement involving the sale of a house or property.


From the point of view of the home buyer, he is the one who is most enthusiastic when it comes to owning a dream house, followed by the registration of the sale agreement. The burden of validating all the databases associated with the property on sale lies on the appointed lawyer so that the property owner should have access to every part of the property and have conveyed ownership. If any document can be valued more than anything for the owner, then that should be the sales agreement. That is why it is made, so everything should be clear concerning the seller and the buyer.


Is it mandatory that a sale agreement is registered?

The provisions in the registration act of 1908 indicate that the registration of sale agreements is essential.

Does the validity of a sale agreement last if it is not registered?

The validity of a sale agreement is zero if it is not registered. But considering it is based on peaceful possession over a long period, the property’s ownership is deemed invalid.

What consequences follow if the sale agreement gets cancelled?

If the sale agreement has expired, then the seller and buyer must get it revalidated within 45 days of its expiration based on mutual agreement.

Is a sale agreement binding in nature?

It is a vital database associated with the whole process of selling and purchasing a property. This agreement elucidates all the necessary terms and conditions that bind both parties. Due to this, it records the basic understanding propounded by both parties involved, which is binding by nature.

What is the duration of use of a registered sale agreement?

The validity of a registered sale agreement is three years. If a negative clause is specified in the agreement, for example, suppose a purchaser is required to register a property under three months, the limitation will get extended further by such a period.