You need to enter into an 'Agreement to Sell' with the seller whenever you buy a property. The purpose of the 'Agreement to Sell' is to:

• Provide a record of the terms agreed upon by both the contracting parties (buyer and seller) for the sale/purchase of a property.
• Create the right for the buyer to obtain a sale deed for the property purchased.

The 'Agreement to Sell' is NOT a document through which the transfer of the title will be carried out. It is a document that precedes a sale deed and thus, does not require to be registered. 

The 'Agreement to Sell' is governed by the provisions of the Indian Contract Act, 1872 and the Transfer of Property Act, 1882. Such agreement details information about how the seller got the property, settlement of the sale price, mode of payment, seller's obligation to obtain statutory clearances to convey clear title and to indemnify the purchaser against loss or damage due to any defect in the title.

Before you enter into the 'Agreement to Sell'…

As a buyer, you should know the liabilities of the seller. A seller is bound to:

• Inform the buyer about any material defect in the property.
• Provide records of ownership rights over the property.
• Execute the sale deed.
• Pay all the old liabilities on the property.
• Hand over the possession of the property to the buyer.

You should carefully do the following checks:

• Check the original documents.
• Check the mode of acquiring the property by the seller.
• Verify the Encumbrance Certificate of the property (for a minimum period of 30 years) from the Sub- Registrar's Office to know if there are any encumbrances on the property to be purchased.
• Verify existing litigation, if there is any, on the property to be purchased.
• Verify if there is any litigation or objection in revenue and municipal office about inheritance or any other matter.
• In case the seller is holding a power of attorney (POA), confirm the genuineness and validity of the POA from the principal.

State government may by notification under Section 22A of the Registration Act, 1908 declare registration of certain documents as opposed to public policy. Buyer should verify applicability of such notification.

While finalizing the 'Agreement to Sell'…

As a buyer, you should ensure that the following terms are part of the Agreement:

1. Nature of the title held including encumbrances such as lease, mortgage and charges on the property
2. Any material defect in the property or defect in the title disclosed by the seller
3. Location and description of the property agreed to be sold
4. Consideration amount (including any part payment of consideration or earnest money), mode, place and time of payment
5. Time frame to complete local laws and statutory obligations
6. Forfeiture clauses in case of breach of contract by either party

For your reference, here is a sample 'Agreement to Sell' for a society flat:

(Highlighted in Yellow are the points that you should take special note of!)

THIS AGREEMENT made at ________ (city) on the __ day of ______ (year)

Between
___________________________, of ________(city), residing at_________________________ ________________________________, hereinafter called "The Seller" (which expression shall unless it be repugnant to the context or meaning thereof shall mean and include his heirs, legal representatives , executors and administrators) of the One Part 

And
________________________, of ________ (city), residing at __________________________ hereinafter called "The Purchaser" (which expression shall unless it be repugnant to the context or meaning thereof shall mean and include his heirs, legal representatives, executors, administrators and assigns) of the Other Part; 

WHEREAS the Seller is the owner of flat No._____, admeasuring about _____ square feet on ___floor of building known as "_________" (hereinafter referred to as "the said Building") (hereinafter referred to as "the said Flat" and which is more particularly described in the schedule to this agreement;) belonging to ______________ Co-operative Housing Society Limited situated at ___________ and he/she is the member of the ______________ Co-operative Housing Society Limited, registered under Serial No._________ of _____ (hereinafter referred to as "the said Society") and as a member and as the owner of the said flat in the Society, he was allotted five fully-paid-up shares of the said Society of the face value of Rs.50/- (Rupees Fifty Only) each bearing distinctive Nos._________ to ____________ (both inclusive) under share certificate No.___ (hereinafter referred to as "the said Shares") ; 
AND WHEREAS the Seller is now absolutely seized and possessed of and is otherwise well and sufficiently entitled to sell the said Flat in the said Building of the said Society;
AND WHEREAS the Seller herein has agreed to transfer and the Purchaser has agreed to acquire all rights, title and interest of the Seller in the said Flat and the said Shares with all legal consequences including the right of occupation, including his rights, title and interest in the said Flat for a total consideration of Rs. ________/- (Rupees ______________________ only); 
AND WHEREAS the Parties hereto have agreed to reduce into writing the Terms and Conditions on which the Seller has agreed to transfer and the Purchaser has agreed to purchase and acquire the right, title and interest of the Seller in the said Flat including the entire interest of the Seller in the said Society;

NOW IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES HERETO AS FOLLOWS:

1. The Seller doth hereby agree to transfer unto the Purchaser and the Purchaser doth hereby agree to purchase and acquire all the rights, title and interest of the Seller in the said Society including the said Flat admeasuring about _____ Square Feet of built up area on the ____ floor of the building known as ____________________ belonging to the ___________________ Co-operative Housing Society Limited situated at _________________________, together with the said Shares bearing distinctive Nos.________ to _______ (both inclusive) allotted under share certificate No.______ and all the rights of the Seller as to the use, occupation and enjoyment and ownership of the said Flat together with all rights, title and interest of the Seller in the said Society for a total consideration of Rs.________/- (Rupees __________________ _______ only) to be paid by the Purchaser to the Seller in the manner hereinafter mentioned.
2. The said consideration will be paid by the Purchaser to the Seller as follows: that is to say: a. Rs. ________/- (Rupees_________________________ only) paid on or before execution of this agreement as Earnest Money (the payment and receipt whereof the Seller doth hereby admit and acknowledge and acquit, release and discharge the Purchaser from the payment and receipt thereof and every part thereof); and b. the Balance consideration of Rs. ________/- (Rupees ______________________ only) will be paid on or before ____________ and against the delivery of vacant and peaceful possession of the said Flat by the Seller to the Purchaser.
3. It is agreed that in the event of any delay or default by the Purchaser in making payment of the balance consideration on the due date, the Seller shall be entitled to give seven days notice in writing to the Purchaser making time the essence of the contract and if the Purchaser fails to make payment within such notice period, then in that event this Agreement shall stand terminated and the Seller shall be entitled to forfeit the earnest money of Rs.__________/- Rupees __________________________ only) paid by the Purchaser on the execution hereof.
4. It is agreed between the parties that if there is any delay or default on the part of the Seller in performing his part of the contract then the Purchaser shall be entitled to specific performance of this Agreement together with right to claim costs, charges and expenses and losses from the Seller.
5. The Seller doth hereby declare and covenant with the Purchaser that the said Flat is free from all encumbrances of any nature whatsoever and that the Seller has full rights, title and interest in the said Flat and has full right and authority to assign and transfer his entire interest in the said Society including the said Flat and the said Shares to the Purchaser.
6. The Seller has represented to the Purchaser :
1. that the Seller has paid all the dues and outgoings in respect of the said Flat up-to-date.
2. that the said Flat is free from all encumbrances.
3. that the said Flat belongs to the Seller absolutely and that no other person or persons have any right, title or interest whatsoever therein by way of sale, gift, exchange, inheritance, lease, lien or otherwise in the said shares / said flat.
4. that notwithstanding anything herein contained, any act, deed, matter or thing of whatsoever nature done by the Seller or any person or persons lawfully or equitably claiming by, from, through or in trust for Him, the Seller has full rights, power and absolute authority to sell or transfer to the Purchaser the said Flat and his rights, title and interest in the said Society and that the Seller has not done or committed or omitted to do any act, deed, matter or thing whereby the ownership, possession and/or occupation of the said Flat by the Seller may be rendered illegal and/or unauthorised for any reason or on any account.
5. that the Seller shall obtain the necessary No Objection Certificate from the said Society for transfer, sale of the interest of the Seller in the said Society, as well as the rights, title and interest of the Seller in the said Flat as herein contained to the Purchaser and also to the admission of the Purchaser to the membership of the said Society in his place and instead of the Seller when the sale herein is completed by delivering the vacant and peaceful possession of the said flat to the Purchaser.
6. that on payment of the full purchase price herein reserved, the Purchaser shall be entitled to the vacant and peaceful possession of the said Flat.
7. The Seller doth hereby agree to sign and execute any deed or writing as well as all other papers and documents as may be required by the Purchaser for transferring the said Flat and the said shares to the name of the Purchaser in pursuance of this Agreement.
8. The Purchaser doth hereby covenant with the Seller that he shall always abide by the Rules, Regulations and By-laws of the said Society and shall pay the municipal taxes and maintenance charges in respect of the said Flat from the day the Seller delivers possession of the said Flat to the Purchaser. It is specifically agreed by and between the parties that till the said Flat is transferred in the name of the Purchaser, the Purchaser shall not be liable to pay any maintenance charges in respect of the said Flat to the said Society and the same shall be borne by the Seller.
9. That the Seller declares that his Membership of the said Society is subsisting and is in full force and has not been terminated.
10. The Seller has represented to the Purchaser that the total transfer fee / transfer premium / donation payable to the said Society for transfer of the said flat / said shares of the said Society in the name of the Purchaser shall be borne and paid by both the parties in equal proportion.
11. It is agreed between the Seller and the Purchaser that the expenses for stamp duty on these presents or on final sale deed / transfer deed and registration charges in respect of this transfer shall be borne and paid by the Purchaser alone and the Seller shall not be liable to pay the same or any part thereof. However, the stamp duty or duties in respect of all previous transfers in respect of the said flat shall be the responsibility of the Seller.
12. The Seller doth hereby undertake to hand over all the documents including share certificate, receipts, papers concerning the said Flat to the Purchaser against the receipt of the balance consideration of Rs. _________/- (Rupees ________________________ only).
13. The Seller doth hereby undertake to do and to execute all acts, deeds, matters and things as and when it is necessary, proper or expedient for the purpose of fully and effectually transferring the said Flat and the said Shares of the said Society to and in favour of the Purchaser in the record of the said Society to enable the Purchaser to have and to hold the said Flat and the said Shares absolutely.

SIGNED AND DELIVERED by the 

within named "Seller" 

Shri __________________________________

in the presence of: 

1. ____________________________________

2. ____________________________________

SIGNED AND DELIVERED by the 

within named "Buyer" 

Shri ______________________________ 

in the presence of: 

1. _________________________________

2. _________________________________

SCHEDULE OF PROPERTY

All that piece and parcel of the Flat No________________ on Floor ___________________ in Block No. _______________________ of the ______________________ Cooperative Housing Society Ltd. situated in/bearing Survey No._______________________ R.S. No____________ ___________in the Sub- District of _____________________constructed as per sanctioned plan and having Plinth area admeasuring __________________ square feet and delineated on the Plan hereto annexed and bounded as follows:
On or towards the East by: __________________
On or towards the West by: __________________       
On or towards the North by: __________________
On or towards the South by: __________________
SIGNED AND DELIVERED by the 

within named "Seller" 

Shri __________________________________

in the presence of the witnesses: 

1. ____________________________________

2. ____________________________________

SIGNED AND DELIVERED by the 

within named "Buyer" 

Shri ______________________________ 

in the presence of the witnesses: 

1. _________________________________

2. _________________________________