Ideally you should stay away from any such transaction if the seller is not available to sign the original documents like Agreement to sell and other MOU's which need to be in place in a transaction like this.
You need to have in writing the terms of registration , the payment should be made by Demand Draft , the details of the Draft should be mentioned in the Agreement to Sell. If he has cleared the loan ask him for the no dues certificate which the bank will have issue to him or ask him the name of the person who took the loan and the details of the bank such as loan number and the bank and then enquire the status of the loan from the bank directly.
It should be noted that any agreement made should be signed by the seller in your presence , else does not make sense at all , else later he can very well say - he has not signed. SO play on records, safe gurd your interest. Best of Luck