In India, what are some documents which one have to be careful about if he is dealing

with purchase/sell of property?

The following documents are required to be carefully seen (in case of bank loans, the
bank will also demand these) -

1) Blue print of the plan from the builder (In case of flat / constructed property)[not
relevant for land]

2) Commencement certificate[not relevant for land]

3) Completion certificate [not relevant for land]

4) Permission for Non agriculture use of land

If land is originally agricultural, permission from revenue authority is needed.

5) 7/12 extract in case of land property [specific to Maharashtra or some equivalent in

other states]

6) Previous sale deeds in case of resale

7) Builder's No objection certificate [not relevant for land]

From where these documents need to be obtained?

These documents can be obtained from the vendor /Builder.

What are the legal authorities need to be involved?

Sub registrar's office for registration.

What role does a lawyer play or one does even need to involve a lawyer?

A Lawyer comes into the picture while drafting your sale agreement. Estate agents /
builders  have draft agreements of sale which they give you and you may think that a
lawyer is not required.
That would be a grave mistake. Most agreements drafted by Builder's lawyers are
extremely one sided. Remember if tomorrow there is a litigation, the court is not going to
ask you as to what was agreed, they will read the contract.
Your contract is extremely important and should be drafted by a lawyer. Do not try to
save Rs. 5-10,000/- (depending upon your city. In most tier 2 cities like Pune lawyers
take Rs. 4-6,000/-) only to waste lakhs later on litigation.

Further, each agreement is different. In a Contract, the lawyer is going to write the entire
history of your property and customize it according to your specific situation. A builder /
Estate agent will not.
Not only that there are extremely important clauses that can help you win or lose a case
in case of litigation in the future.

In 60% of the cases, if you get your agreement drafted by non legal people, there may
not even be problems. But if you are among the 40%, it will be a big headache.
So in conclusion, the risk is not worth taking.

Consult the specialists in every field when doing something related to that. When
suffering from a disease, go to a doctor not Asaram Bapu. Same way, when dealing
with contracts, get them drafted by experts.

Hope this helps. Feel free to ask me anything more in comments.

EDIT ----- UPDATE -----

While buying an immovable property - (Like Flat or Land) -
 
Giving a public notice in the newspaper is a must. It doesn't matter which one. It need
not be English. Any state language too will do. And any newspaper with some
circulation will do. This Public notice is what protects your interest in the court of law if
you face any litigation regarding your purchased property.

Secondly, a legal search of the property (not to be confused with physical search) has
to be conducted by engaging a lawyer following which he gives a title note. If you
approach nationalised banks for loan to buy property, their lawyers conduct a search
and give title note. But if not, you have to do it yourself.
Lawyers conduct search by visiting sub registrar's office and checking the record of title
documents.
 
Example - You bought a flat without public notice and legal search, and turns out the
owner did not have a clear title. Now you along with the owner are being sued for
cancellation of your purchase.
 
In such a case, the law / court is bound to protect the interest of a bonafide purchaser if
he had given a public notice and had conducted search. If not, then the law is not going
to protect your interest.

SATBARA (7/12) Extract:

One such land record term used in the state of Maharashtra is the Satbara Extract
(7/12).  Although many discussion forums from time to time have discussed about the
Satbara Extract, most of these discussions ended without any definite answer to this
document. So here’s all you want to know about the document:
Satbara Extract is official document maintained by the Revenue Department of the state
of Maharashtra for agricultural land and for land that was converted into non-agricultural
land (NA).
It is sometimes also referred to as Satbara Utara, Seven Twelve Extract, 7/12 Utara,
7×12 Utara or 7 12 Extract. This official document contains key information such as
location, area, name of the legal owners of the land, survey number, hissa number, etc.
In many cases, the cultivator of a particular agricultural land can be different from the
owner, who had given permission to the cultivator to cultivate in his land. The Satbara
extract thus contains useful information such as, who the cultivator is, what crops were
grown, how much quantity was produced, how much tax was paid and how much is
due. It also includes if there is any outstanding loan on the land or if there is any
pending litigation.

The Satbara extract also includes the “significant” changes and corrections made to the
ownership records of a particular plot of land. These changes are recorded in 6/12
Extract/Utara, which is also known as “Pherfar Patrak” (Marathi for significant changes
and corrections).

If there is no formal access road to the land, the Satbara extract also details how the
land can be accessed. In such cases, the typical access would be through someone
else’s land, details of which are included in Satbara Extract. Meanwhile, the Pherfar
entries include changes to the ownership, changes to original measurements,
partitioning of plot (if any), loans against the land, pending litigation, etc.

Obtaining a copy of Satbara extract:

One can obtain the copy of Satbara extract of a particular plot from the Maharashtra
state revenue offices. The Talati office of the respective village maintains the Satbara
records. All you need to do is pay the official fee to obtain the extract.

A TIP TO BUYERS: Always remember, it is purchaser’s responsibility to have his/

her name recorded on Satbara as new owner of the land. All these convey legal
significance and importance of this document. So if you planning to buy a plot of
land in Maharashtra, make sure you have seen and thoroughly gone through the
Satbara extract and once bought the records are transferred to your name.