The Short Sale Purchase Agreement is essential in situations where property owners need to sell their property for less than their outstanding mortgage balance due to financial distress or market conditions. This document, primarily used in the Indian real estate market, requires careful structuring to comply with Indian property laws while protecting the interests of all parties involved. It includes crucial elements such as lender approval provisions, property valuation details, closing conditions, and liability releases. The agreement must conform to various Indian legislations, including the Transfer of Property Act, 1882, the Registration Act, 1908, and the Real Estate (Regulation and Development) Act, 2016. It's particularly relevant in challenging real estate markets or when borrowers face financial hardship and need to avoid foreclosure.

1. Parties: Identifies and provides details of all parties involved - Seller, Buyer, and acknowledgment of Lender's involvement

2. Background: Explains the short sale context, current property status, and existing encumbrances

3. Definitions: Defines key terms used throughout the agreement, including property-specific terms and short sale-related terminology

4. Property Details: Comprehensive description of the property, including legal description and current condition

5. Purchase Price: States the agreed purchase price and acknowledgment that it is less than the outstanding mortgage amount

6. Earnest Money: Details about the earnest money deposit, including amount, holder, and conditions for return or forfeiture

7. Lender Approval: Terms regarding the requirement for and process of obtaining lender approval for the short sale

8. Closing Conditions: Specifies all conditions that must be met before the sale can close

9. Closing Process: Details about the closing process, including timing, documentation requirements, and procedures

10. Representations and Warranties: Standard representations and warranties from both buyer and seller

11. Default and Remedies: Outlines what constitutes default and the available remedies for each party

12. Governing Law: Specifies that Indian law governs the agreement and identifies jurisdiction for disputes