How to respond to a purchase offer?
When you sell your property in France, a potential buyer will commonly give you an offer to purchase. This is a document that details their intention to buy your real estate and the price they're proposing to pay for it. You, as the seller, will then have to respond. And here's how you do it.
There are three ways to respond to a prospective buyer's offer to purchase, which include:
- Accepting the offer as is
- Making a counter-proposal
- Declining all offers
Whichever you decide, you can respond to their offer to purchase by submitting an acknowledgment of receipt, via email, or even through an agency.
An offer to purchase at price takes precedence only if it precedes other offers to purchase by one day or more. In this situation, the seller must give priority to this offer to purchase and respond in writing.
What does an offer to purchase commit you to? What are the consequences for the seller? What are the consequences for the buyer?
Article 1113 of the Civil Code provides that the sale of a property is formed by the meeting of an offer to purchase and its acceptance, upon which the parties express their willingness to commit. If both parties agree, the sale can be formed.
Important Note: accepting the offer to purchase doesn’t necessarily mean you’ll automatically sell the property to the buyer. It’s not a legally binding document.
What Does It Mean to The Seller?
This offer to purchase is important and useful for the seller as it sets the price of the property that you are selling.
If an offer of purchase arrives at the price formulated in the advertisement (sale between individuals) or is signed in the sales mandate (if you hired a real estate agency), you are prohibited from accepting an offer higher than the sale price.
As long as you haven't accepted it yet, an offer to purchase does not bind you to the sale. But upon accepting it, you're officially recognizing the other party as the sole buyer of the property. You are therefore no longer allowed to accept offers from other potential buyers even when their offers are higher.
What Does It Mean to The Buyer?
Just like with the seller, the offer to purchase doesn't bind the buyer to the sale.
Once the offer has been validated by both parties, only the buyer will have a “way out”. They can either exercise their right of withdrawal within 10 working days. Or if they buy on credit, they can also assert the condition precedent contained in the offer, which exempts them from the purchase if the bank refuses their application for a loan.
Any promise to purchase is accompanied by a period of acceptance that generally varies between 24 and 72 hours. The buyer and seller may also agree on another time limit.
If the seller finally decides to opt for another offer, the buyer will be able to obtain damages. In addition, the seller will also have to pay damages to the real estate agent who was also impacted by this refusal.
What are the conditions precedent of a sales agreement?
- Obtaining a loan from the buyer
- The sale of another property
- Carrying out work
- Obtaining a building permit
Sample Offer to Purchase Acceptance Letter
[Last Name First Name]
[Address]
[Postal Code and City]
[Date] Registered letter with acknowledgment of receipt [or by email]
Subject: Acceptance of an offer to purchase
Dear Madam, Sir,
Following the receipt of your offer to purchase received on [date], I accept the offer under the following conditions:
Type of property:
The characteristics of the property (surface in m², floor and number of rooms, etc.):
Conditions and commitments of each:
Price:
Acceptance is valid until: [date]
Conditions precedent of the property
Offer amount of [amount accepted], agency fees included and notary fees excluded, which will be paid in full on the day of signing the authentic deed of sale.
Financing conditions
This offer is not subject to financing.
This offer is valid subject to obtaining a loan in the amount of [maximum loan amount], euros at the maximum rate of [in %], from a lending institution present in the country of sale of the property.
I immediately notify my notary Maître [name] so that he will form a sales agreement and will begin the necessary steps for the establishment of the deed of sale.
I will contact you again to tell you the date and time for signing the sales agreement.
While waiting to meet you, Madam/Sir, I send you my distinguished greetings.
Signature
Name of Seller/Owner
- As the seller, you can respond to a prospective buyer's offer to purchase by:
- Accepting the offer as is
- Making a counter-proposal
- Declining all offers
- The offer to purchase must be submitted in writing and set at a price less than or equal to the initial asking price.
- The offer to purchase does not legally bind any party until it has been accepted by the seller in writing.
- Only the buyer can withdraw and renounce the transaction once his offer has been accepted.
- The offer to purchase does not bind the seller: only the signatories are committed.
- If the seller finally decides to opt for another offer, the buyer will be able to ask for compensation for damages.
- Any offer to purchase is accompanied by a period of acceptance that generally varies between 24 and 72 hours.
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Posted on 22/12/2022 by
Andy LECUYER
