If you return the deed to the bank, how can you own the house?

I think what you're trying to say is the property is free of encumbrance.

To sell, you just need to advertise the property online. If got buyer, sign a letter of intent then proceed to SPA / Loan and etc.

However, low cost units have to go thru extra procedures. If it is on leasehold, even longer procedure.

As for your friend's mum's story, maybe the buyer can only afford to get 1,1M loan. By asking for 1,3M, it would complicate and slow down the process.

Bank would release the money to you in a lump sum via RENTAS most of the time.

Hello.

My mother owns a low cost single storey terrace house (freehold) and we have the intention to sell it (when the time is right). The property is already paid off and the deed is already returned from bank.

I have tried looking around for the procedure to sell off houses, but apart from the advice of just consulting a property agent, I can't seem to find any other info.. I'm sure there's already a post regarding this, could somebody here point me to the right direction? A website detailing the steps perhaps?

Also.. I'm confused about this part.

Recently my friend's mom sold off their house, she said they sold it off for 1.1 million instead of 1.3 million because they wanted it in cash. I'm quite confused, if you were to sell off the house and the new owner approaches a bank to borrow loan, we will only receive the money in parts is it? not the full lump sum? 
Intention to sell: feel that property appreciation already stagnant, won't get that much higher than current value, so sell and use as d/p for next house (landed as well).