Also called: Agreement for sale, ATS, Sale agreement, Bayana (in north India)
The promise to transfer at an agreed price on agreed terms. It is not ownership, and a token amount usually accompanies it.
How it works and what to check
The agreement records the price, the payment schedule, what the seller must do before the transfer (clear a loan, get a society NOC) and the date by which the sale deed will be signed. It gives the buyer a right to enforce the sale, but not ownership.
For a flat in a registered project, RERA calls this the agreement for sale and stops a builder taking more than 10% of the cost before it is signed and registered. In resale, whether the agreement must be stamped and registered depends on the state.
Read the clauses on delay, refund of the advance and who pays which charges before you sign.
Common questions
Does an agreement to sell transfer ownership?
No. Only the registered sale deed does. The agreement gives you a right to have the sale completed on its terms.
How much can a builder take before the agreement for sale?
Under RERA, not more than 10% of the cost of the flat before a written agreement for sale is signed and registered.