How To Sell Loan Property?

Here’s how to sell flat on loan:

• You can start by informing your lender about your purpose in selling the property. The bank will give you a foreclosure letter or a loan balance statement. It will detail everything, including the outstanding loan amount.

• Once you get the foreclosure letter, you can proceed with

  posting an advertisement of your property on NoBroker

  . You can find a buyer for your property. It is important to inform the buyer that the property is under a mortgage.

• There are two choices for dealing with the existing loan during the sale:

  • The buyer can directly pay the loan amount to your bank. He or she has to clear your home loan, while the remaining purchase price goes to you.

  • The buyer can also apply for a home loan to support the purchase. The buyer's bank will then pay off your housing loan to release the title deed.

• After this, the buyer becomes the new owner.

• The bank will release the property documents, such as the title deed, which essentially transfers to the buyer's name once your loan has been cleared.

  You must ensure that all documentation is properly recorded and signed.

You should also create a formal selling agreement that specifies the terms of payment, the loan closing procedure, and the time for your property transfer. The agreement should specify the terms of title transfer and debt repayment.

This is how to sell flat with home loan.

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Hi Avik, I saw you wanted to understand how to sell a flat which is on loan. I have gone through the process of selling my house in Delhi which had a running home loan. For this, you would need the lender’s consent first. I will share the whole process below.

How to Sell a Property With Home Loan?

1. You will have to ask for permission from the home loan lender. The consent will be given as a letter which states the amount due, which will be paid off once the outstanding payment is made by you. It is inclusive of the prepayment charges, if any. 

2. The letter also states the document list with the lender and will be provided to you once the payment is cleared. The calculated amount is of a future date as it gives the buyer the time to compile the needed funds.

3. Once the payment is received by the bank, your original documents will be released along with a loan closure letter which shows that there is no outstanding amount left to be paid. Get the no-dues certificate without fail to ensure it occurs in the future.

In case the buyer of your house is also looking to take a home loan, you can follow Ms Kanta’s steps to understand the process. She has explained everything well in her answer. I hope you now know how to sell flat with home loan.

I know it might sound impossible for people to sell their house with a mortgage but it's pretty easy actually. A friend of mine did that last year because he was in an awful financial crunch. As I wasn’t aware of the process, I asked him how to sell loan property? Here is what he told me. 

What is the Process of Selling a House with a Mortgage?

He told me that selling flat with home loan is very easy and that to sell my property without clearing the outstanding loan, I will have three options. Here are those.

• Buyer Decides To Pay For The Property

  : 

He told me that this process is simple and I need to obtain an outstanding loan   certificate from my bank. He also said I need to make a down payment, which is equal to the outstanding amount. 

The bank will then hand over the original documents to me, and I can start the transfer process to the buyer's name. 

• Buyer Takes Loan From The Seller’s Bank

  :

He mentioned that if the buyer decides to take a loan from my bank, the bank will expedite the process. According to him, this happens because the bank already has all the details of the property. 

After the approval, a Tripartite Agreement will take place between the bank, the buyer, and me. This agreement provides a part of the loan to pay off my existing loan, and the rest of it will be given to me as payment.

• Buyer Takes Loan From Another Bank

He said that if the buyer wants to take a loan from another bank, I will have to ask my bank to give me an outstanding loan certificate. Once the new bank is satisfied, it will issue the outstanding loan amount to my bank and clear the loan. Following this, my bank will release all the property-related documents to the seller's bank. 

My friend also mentioned that he posted his property on

and suggested me to do the same. I hope this information about how to sell loan property has been of help to you.