Buying real estate through the bank
Question

                I want to buy some real estate through one of the Islamic banks such as al-Raajihi or al-Bilaad. Is it permissible for me to sign a contract to purchase with the bank without checking whether the property deeds have been transferred to the name of the bank? Or is it essential to see the property deed and make sure that ownership has been transferred to the bank before I sign any papers?

My second question is: the real estate I want to buy is worth more than the amount that the bank has set for buying based on my salary. Is it permissible for me to give the bank the difference so that I can go ahead with the purchase?.
Praise be to Allah.
      Firstly: 

    Buying a property through the bank is done in one of two 
    ways: 

    1.

    The role of the bank is merely to finance the transaction, so 
    it gives the money to its customer or pays it on his behalf, on the basis 
    that the customer will pay it back in instalments, with something extra. 
    This is a haraam, riba-based loan. 

    2.

    The bank buys the property, then sells it to the customer. 
    This is permissible subject to certain conditions: 

    (i)That the bank does not 
    stipulate any penalty in the event of late payment of instalments, because 
    stipulating this penalty is a kind of riba which is haraam, whether the bank 
    takes the penalty for itself or distributes it to the poor. Please see the 
    answer to question no. 89978.

    (ii)That the customer does not sign 
    any purchase contract or make a promise to purchase before the bank takes 
    possession of the property.

    (iii)That the bank does not 
    stipulate that a down payment be made before it takes possession of the 
    property, because the down payment -- according to those scholars who say 
    that it is permissible, namely the Hanbalis -- is not valid before the 
    contract is drawn up.

    It says in Ghaayah al-Muntaha (3/79): It [the down 
    payment] means paying some of the price or rent after drawing up the 
    contract and not before. End quote. 

    But the majority of Hanafi, Maaliki and Shaafa’i fuqaha’ do 
    not regard the down payment as valid and they do not regard it as 
    permissible for the seller to take it, whether it is agreed upon after the 
    contract or before. 

    Dr. Muhammad al-‘Usaymi (may Allah preserve him) was asked:

    What is the ruling on the “Manzil Mubaarak” financing program 
    (buying a house in the name of the bank until the loans are paid off) which 
    is offered by al-Bank al-‘Arabi and al-Raajihi bank?

    He replied:

    Many commercial banks offer financing services for buying 
    real estate. In the riba-based banks, the customer asks for financing, and 
    the commercial bank gives the money to the customer, who buys the house and 
    mortgages the title or ownership papers to the bank. There is no doubt that 
    this is riba-based financing and is haraam.

    As for the Islamic banks, after the real estate is identified 
    by the customer, the bank buys the property in its own name and the title 
    deeds are transferred to it, then it sells it to the customer for a price to 
    be paid later with a stated, known amount of profit. There is no doubt that 
    this is permissible. 

    One of the matters that should be noted in this case is that 
    it is not permissible for the bank which offers financing for real estate 
    purchase to demand a down payment from the customer before buying a 
    property. And it is not permissible for it to oblige the customer to buy the 
    property; rather the customer has the choice of buying or not buying. 

    End quote from the Shaykh’s website. 

    The point is that it is essential that the bank take 
    possession of the property before selling it to you, and taking possession 
    is done through a purchase contract between the bank and the owner of the 
    property. It is not essential to register the property in the name of the 
    bank, especially if registering involves payment of large fees as is the 
    case in some countries. 

    Secondly: 

    It is permissible to buy property from the bank by 
    instalments; it is also permissible to pay part of the price and to pay the 
    rest by instalments, such as if you pay twenty thousand, for example, and 
    pay the rest in instalments in a manner that is compatible with your salary 
    and other commitments. There is nothing wrong with the bank deciding the 
    price of the house on the basis of the number of years you will pay 
    instalments, so that if you pay part of it up front, that will reduce the 
    number of years during which you pay in instalments, thus reducing the price 
    of the property.  

    And Allah knows best.