An agreement of sale is a legal document that summaries all terms and conditions to sell the real estate property in the future. It is an agreement or contracts to transfer real estate property and it contains property price, other details of the transaction, and duly signed by the seller and the buyer.
- According to Section 54 of the Transfer of Property Act, 1882, which states that a contract for the sale of immovable property, is a contract that a sale of such property shall take place on the terms settled between the parties. Section 54 further states that it does not, of itself, create any interest in or charge on such property.
- An agreement of sale is also known as the Contact of Purchase, contract for sale, contract agreement or sale agreement.
Agreement of sale is the base document on which the sale deed is drafted. A sale deed is a document prepared at the time of full payment made by the buyer and when the actual transfer of the property ownership takes place.
Suppose Rajesh has purchased an apartment under a sales agreement and got possession, the title of the property will remain with the real estate developer unless a sale deed has not been executed and registered the property at local registrar’s office.