An agreement to sell is different from a sale deed. He can get a loan on the basis of an agreement to sell. 

MOU is not a proper legal document to be entered into before purchasing an immovable property. 

The buyer and seller can enter into a registered sale agreement which would enable the buyer to obtain home loan from bank. 

Moreover that would be the proper procedure to buy a property. 

A MOU  cannot be enforced in law. 

Yes, he won't get reimbursement cheque to seller unless and until seller sign the sale deed and registration copy. Now seller has to check the letter of approval from bank on buyer name that so and so amount loan has been sanctioned and for next six months will be active. 

There is no harm in execution of sale deed directly 

there is no need to execute agreement for sale and then sale deed 

if buyer is willing to pay sale consideration at time of execution of sale deed you can proceed with the deal 

The buyer is right.  MOU has no legal sanctity and only a proper sale agreement is right course of action. 

1. "Sale of Agreement" is a tentative agreement with conditional clauses relating to payment schedule, possession dates, revoking clause in the event of defaults etc.... This agreement is not Final /Conclusive and neither it is a Conveyance Deed for any purposes and can be revoked /rescinded anytime by both the parties. Based on this type of Agreement, Banks provide Loan for property.

2. "Sale Deed" is a Final Conclusive Conveyance Deed, which is executed & registeredONLY AFTER 100% payment is received and Possession is given immediately.

Keep Smiling .... Hemant Agarwal
VISIT: www.chshelpforum.com

Hello,

1. It's not mandatory to enter into an MOU before you sell or register an Agreement for Sale. Agreement to Sell is different from Agreement for Sale and as good as an MOU.
2. Whether or not his bank would allow him a loan without registration of Sale Deed is subjective. An Agreement to sell should normally suffice. In any case the bank will do a property search to make sure that there are no encumbrances before approval of loan and besides the capacity of the borrower and creditworthiness are criteria.

MOU isn't mandatory. So you can straightaway execute the Sale Deed. However, you need to take all other precautions before executing Sale Deed 

no need to directly register the sale deed

make a MOU first

in that all the terms and conditions will be mentioned as to how the final sale transaction is to be completed

the MOU is not required to be registered

if you directly register the sale deed, then the stupid bank from which the buyer would have applied for a loan will make you run helter skelter in case there is any defect in your title

also it will be very difficult to have this sale deed cancelled later on if the transaction does not go through

this is a scam which is perpetrated by the banks in order to lock up properties so that the poor seller is not able to exit once the sale deed is registered

these stupid banks will do the title due diligence at their own whims and fancies which can take several months on end

everything will be dictated to you and you will have to submit in order to get the disbursal cheques towards the sale consideration

so do not make this mistake of directly registering a sale deed

if MOU is not ok to the buyer then you can register a Agreement to Sell and also take a power of attorney from the buyer so that you can cancel this agreement to sell in case the transaction is cancelled between the parties for any reason and so that you dont have to run after the buyer for seeking cancellation

1. Agreement for sale and Sale Deed are different documents. 

2. Ordinarily, Agreement for Sale is first executed detailing the terms and conditions of the sale and after complying with all the said terms including payment term, sale deed is registered.

3. MOU and Agreement for sale is similar in nature.

4. You can skip the MOU or the Agreement for Sale  and directly register the Sale Deed and handover possession of your property on receipt of full payment from the buyer.

Dear Sir/Madam,

It is suggested that you may go for the agreement to sale and get the facts of MOU endorsed therein. 

- As per Section 10 of the Indian Contract Act, all agreements are contracts if they are made by the free consent of the parties competent to contract, for a lawful consideration and with a lawful object and are not expressly declared to be void.

- Further, a MOU is a statement of understanding between two or more parties which when made has no enforceability in the eyes of law , as such an agreement has no intention to create a legal bond between such persons. 

- But , when an MOU has been made as per section 10 of the Indian contract Act, then it is a valid agreement.

- Further , no stamp duty is required on MOU, but if the MOU for an agreement to purchase immovable property worth more than Rs. 100/- , then it is mandatory to be registered and stamped .

- Further, if the MOU contains its expiration , then it lost its value , otherwise , the limitation period to challenge an MOU is 3 years from the ate of its execution .

- Further , a Sale Agreement i.e Sale deed is having a legal value and can be executed directly without entering into an MOU.

- Hence, Sale deed is a better option for selling the property after getting full and final payment from the said purchaser , and this deed is also very much acceptable to the bank for loan . 

1. Agreement to sale is a precursor to sale deed.

2. Loan is sanctioned on the basis of Agreement to Sell.