What is the difference between the offer to purchase, the promise to sell and the sales agreement?
In order for the offer to purchase to be valid and facilitate exchanges with the seller, certain elements must appear such as:
- Your identity and that of the seller
- The period of validity of the offer
- The purchase price (should either be equal to or lower than the initial price set by the seller)
In common use, the validity period of the offer is between 1 to 2 weeks. The seller reserves the right to refuse your proposed price and make a counteroffer, upon which you can either accept or refuse yourself.
The sales agreement
The sales agreement sets the sale price, the lots purchased, the surfaces, the diagnoses, and all the elements related to the property while specifying the terms of purchase (i.e. long sale, conditions precedent, etc.).
A withdrawal period of 10 days is provided for by law without justification. This period allows the buyer to think before committing. Withdrawal is still possible after these 10 days but entails the payment of penalties (i.e. payment of agency fees, etc.).
It is a commitment where the seller undertakes to sell his property and where the buyer undertakes to acquire it. This process takes place once the offer to purchase has been accepted.
What you need to know
Following a decision of the Court of Cassation, the purchaser of a property who obtains a mortgage lower than the maximum amount provided for by the suspensive condition indicated on the sales agreement, is no longer obliged to proceed with the sale.
The condition precedent allows the future buyer of a property to renounce the promise of sale if he does not obtain the requested mortgage.
The different steps in selling property include:
- Price estimation
- Listing
- Announcement and visits
- Signing the sales agreement
- Signing the authentic deed of sale
What to Avoid When Selling Property
- An incorrect estimate of the selling price
- Underestimating ancillary costs
- Forget the principles of Home Staging
- Refusal to negotiate
- Disregarding the technical diagnostics
- Not reading the promise of sale carefully before signing
- Hiding defects intentionally
- Multiple sales mandates
The promise of sale
The promise of sale only commits the seller to sell for a certain period. The buyer can also use this period to think twice about either accepting or refusing the terms set on the document.
In return, the future buyer must pay between 5% to 10% of the sale price (capital allowance).
If the sale does take place, the sale price will be reduced by the compensation paid, but conversely (if no suspensive clause comes into play), the seller may then retain this amount as compensation.
Important Note: Following a decision of the Court of Cassation, the buyer who obtains a mortgage lower than the maximum amount provided for by the suspensive condition indicated in the sales agreement will no longer be obliged to proceed with the sale.
The condition precedent allows the future buyer of a property to renounce the promise of sale if they fail to obtain the requested mortgage.
1.Se set a budget, a personal contribution and inquire about a potential mortgage.
2. Finding housing.
3. Offer to purchase.
4. Sign the sales agreement
5. Sign the authentic deed of sale
Some pitfalls should be avoided:
- Underestimating ancillary costs
- Do not look at documents concerning technical diagnostics
- Do not read the promise of sale beforehand
- Do not anticipate resale or rental
- The offer to purchase, the promise to sell, and the sales agreement are important steps in the process of buying and selling property.
- The offer to purchase only commits the buyer to the purchase of a property. This corresponds to the proposed price that they are willing to pay for the property.
- The sales agreement binds the seller and the buyer which happens after the acceptance of the offer to purchase.
- The promise of sale only commits the seller to reserve the property for the buyer and give them a cooling-off period. In return, the future buyer must pay a capital allowance.
You want to
to sell in Paris or its surroundings ?
Posted on 23/03/2023 by
Andy LECUYER
