1. When you accept an advance amount and that should be minimum 10% of the total sale value of the house, you have to give only xerox copies of the documents. However you can give one or two original documents like Encumbrance Certificate, Allotment letter etc... You can show all the original papers to the prospective buyer at the time of agreement of sale.
2. It is true that some unscrupulous people misuse the documents to their advantage and therefore unless & until you are sure of the transaction and having received substatial advance money only, you can handover some original documents.
3. All the remaining original documents be handed over to the buyer, on the day of registration of Absolute Sale Deed, after you are satisfied about the transaction and having received the entire money.