Before signing the preliminary agreement, I inform the seller of my desire to purchase his property and we agree on a purchase offer (orally or in writing).

Purchase offer

  • Verbal purchase offers do not constitute a commitment in any way;
  • For a written purchase offer, before signing, I make sure all clauses that protect me (retraction time, purchase price, etc.) are included in the offer.

GOOD TO KNOW:
A written offer is a binding legal document. That is why it has more constraints. It implies that I take possession of the accommodation as soon as the seller accepts my offer. Retraction time is set at seven days according to the SRU (Solidarité et RenouvellementUrbain, solidarity and urban renewal) act. After this grace period, I am liable to pay damages and interest if I do not acquire the accommodation.

Information contained in the purchase offer

  • Purchase price;
  • Duration of validity of the offer (most often between 5 and 10 days), i.e. the time given to the seller to accept or reject the offer;
  • Conditions for retraction by the buyer (often 7 days);
  • Means of financing (loan, personal investment);
  • Note saying that sale will be definitive only upon signature of the preliminary agreement;
  • Note saying that the purchase offer will be canceled if the seller does not accept it in time;
  • It may contain information on the property as well (type of property, location, surface area, etc.).

GOOD TO KNOW:
The seller may not request any payment to be made at the time of the purchase offer.

Which preliminary agreement do I have to sign?

Sale agreement (or "synallagmatic" promise of sale)

A sale agreement is the most common preliminary contract. It represents a strong and reciprocal commitment from the seller and me. I make a down payment upon signature of the agreement. This amount will be deducted from the sale price if the purchase is made. Otherwise, I forfeit this amount if I do not complete the purchase.

GOOD TO KNOW:
The sale agreement is a binding contract. I can force the seller to fulfill the contract (and viceversa), unless the contract contains conditions precedent.

 

Promise of sale (unilateral)

As stated, a promise of sale commits only one of the two parties. The same conditions therefore remain in force (retraction time, etc.); however, as the buyer, I am free to retract my purchase and the seller cannot force me to complete it.

The seller cannotretract the sale, and must give me priority over other buyers. He cannot sell his property to another buyer for a set period of time (usually 2 or 3 months).

In return, I give him an "immobilization allowance" (10% of the sale price) which serves as compensation should I renounce my purchase within the set retraction time.

N.B.: Only existing accommodations are subject to a promise or an agreement of sale. In the case of new homes, we use the term "reservation contract."

Advantage Retraction time: The SRUactsets a mandatory retraction period of seven days, established in the buyer'sfavor, whether the seller is a real estate professional or not.

Information contained in the preliminary agreement

In case of a unilateral promise of sale or a sale agreement, some specific clauses must be contained in the contract.

  • Personal information of the seller and buyer;
  • History of the property (date of the previous deed of sale, name of previous owner, investigation by the notary authenticating the sale agreement);
  • Information about the property (type of property, address, neighborhood, etc.);
  • Dates of signature of the definitive deed of sale and transfer of ownership;
  • Means of financing (loan, personal investment);
  • Sale price;
  • Amount of intermediary fees;
  • Amounts paid at signature of the preliminary contract and sale;
  • Condition precedent clauses;
  • Clause related to renovation, defects and ten-year liability insurance (for accommodations built in the last 10 years).

Condition precedent clauses

Conditions precedent can be added to the contract at any time. As long as these conditions have not been fulfilled, the formation and performance of the contract may be suspended. Only one such clause is essential in the preliminary agreement. This clause concerns obtaining a loan, and entitles me to recover the amount paid with no penalty if I am not granted a loan.

GOOD TO KNOW
I have 45 days to remove conditions precedent.

Examples of conditions precedent:

  • Lack of urban planning easement or public utilities on the property;
  • Waiver by a public authority to their right of first refusal on the property. The right of first refusal allows a local government (such as the municipality) to sidestep the buyer and take possession of a real estate asset, in order to implement general interest programs such as construction of public facilities, promoting public heritage, sanitation, development of economic activities, etc.;
  • No current mortgage on the property.

I sign the preliminary agreement

To legalize a preliminary agreement, I have three options for the signature:

  • Before a notary;
  • In the presence of a real estate agency;
  • "Private agreement" (which is a deed written and signed between individuals without a notary, or written by a third party who is neither a public officer nor a lawyer) between seller and myself. Because the drafting and formulating of the preliminary contract are highly important, it is best to seek the help of a notary or an advisor (approved by both parties to the agreement).

If I sign before a notary, he or she is responsible for drafting the promise of sale or sale agreement, managing all administrative documents required for the sale, and verifying all administrative and legal information to avoid subsequent problems. The notary initially pays all administrative fees, which are rebilled to the client later.

GOOD TO KNOW:
From the moment I sign, I have between 10 and 15 days to prove that I have started seeking funds. To do so, I obtain a file custody certificate from my banker or from Meilleurtauxif I use a broker.

What is the notary's role?

Authenticate the sale

The notary handles all formalities needed for the deed of purchase:

  • Preparation of contracts;
  • Signature of the preliminary agreement;
  • Management of certain administrative formalities (purging preemption rights, etc.); Tax calculation and filings with the administration;
  • Signature of the definitive sale agreement.

Obtain the title

When the sale is signed and completed, the notary registers the deed at the mortgage office. It is then published in the land register. After that, the notary pays the duties and taxes that I agreed to pay upon concluding the purchase. He then provides copies and extracts of the deed of sale, keeping the original deed of sale for 100 years.

Advise and negotiate

My notary is my advisor during my real estate project. He or she informs me of all applicable real estate laws and can give me useful advice.

Benefits Why should I have my own notary? When I have my own notary (i.e., separate from the seller), I enjoypersonalized advice and guidance. For example, if my bank is late in disbursingfunds and I consequently cannot sign the deed in the allotted timeframe:

  • When I have my own notary, he will reach an agreement with the seller's notary by negotiating an extension.
  • When I call on the seller's notary, I benefit from no guidance and have less chance of having my request accepted.

 

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