You have received several offers to purchase, how to go about it?
Also called a purchase proposal, the offer to purchase allows the buyer to “reserve” the property they intend to purchase. Not to mention it sets the price for the property sale as well.
The offer to purchase must be set in writing, at a price less than or equal to that of the advertisement, and be valid for a limited time. Though it's an important document in the sale, it doesn't legally bind any party until the seller accepts the offer. And in this regard, only the buyer can legally withdraw from the sale even when they've signed the document.
According to Article 1113 of the Civil Code, the submission of an offer to purchase and its acceptance by the seller legally expresses that both parties are willing to commit to the real estate sale. As such, the transaction officially starts from this document.
In case of simultaneous purchase offers, does the owner have a choice?
With that said the real estate agents of the potential buyers who submitted offers to purchase a day after the first prospective buyer still have every right to visit and check your property out. Only until you accept the first offer to purchase will the rest have to give up their claim to purchase your property. Moreover, you (or your real estate agent) are obliged to inform other buyers that an offer to purchase has officially been accepted.
The Court of Cassation provides if two or more offers of purchase are sent to the seller on the same day, the seller reserves the right to choose which one to prioritize.
As the property owner, you can either:
- Choose and accept an offer to purchase as is
- Make a counter-proposal to a selected offer
- Decline all offers if none are suitable
How do I choose between two offers?
- The professional situation of the buyer (compare the profiles of each prospective buyer)
- The amount of the personal contribution (the more it is consistent and the easier it is for the bank to accept the bank loan and it is a security for the seller)
- The buyer's dedication (i.e. their motivation to purchase the property, what they plan to do with the property, etc.)
- Financing/ Method of payment (i.e. cash purchase, proof of accepted loan/mortgage application)
Is recourse possible in case of refusal of an offer at the price set by the seller?
If you, as the seller, refuse the offer to purchase at the price the buyer set, it is possible to consider a recourse. Though it can be a long and expensive process.
However, if the offer is accepted by the seller, the next step is to sign the promise of sale and get it notarized. Afterward, once everything has been settled (especially regarding the buyer's financing), both parties will then have to sign the final deed of sale.
What does an offer to purchase commit you to? What are the consequences for the seller? What are the consequences for the buyer?
- Introduces a prospective buyer for their real estate sale.
- Sets the final price of the property for the sale
- Won't be legally binding unless the offer is accepted
- The seller won't be allowed to entertain other buyers once they've accepted an offer to purchase
For the buyer, the offer to purchase:
- Lets the seller know of their intention to buy the property
- Sets the final price of the property for the sale
- Won't be legally binding unless the offer is accepted
- The buyer is given a chance to withdraw from the sale (within a 10-day period) in light of certain situations (i.e. loan application is rejected)
- Will be paid in damages if the seller refuses their offer to purchase.
What are the mandatory information on an offer to purchase?
- Identity of both parties (buyer & seller) - surname, first name, address, and reference of the real estate offer.
- Price proposal - may be lower than the initial price set by the seller.
- Period of validity of the offer - cannot exceed two weeks (usually between 5 and 10 days).
- Description of the property and mention of the date(s) under which the property was visited.
- Means of financing and suspensive clauses (i.e. urban planning law, bank loan, etc.).
Important Note: If the purchase is made by several entities, the offer must include the names and signatures of all corresponding and future buyers to have any legal value.
- An offer to purchase is a document that details a prospective buyer's intention to purchase a property and the price they're willing to pay for it.
- The document is not legally binding unless the seller accepts the offer.
- When the seller receives multiple offers to purchase, they must prioritize the one that came a day (or more) earlier than the rest.
- If the seller received multiple offers to purchase on one day, they reserve the right to choose which one to prioritize.
- The buyer will be paid in damages if the seller refuses their offer to purchase.
You want to
to sell in Paris or its surroundings ?
Posted on 21/12/2022 by
Andy LECUYER
