What is the purpose of a sales agreement?
The COMPROMISE OF SALE is a reciprocal commitment of a seller and a buyer in the context of a real estate sale. It is also called "pre-contract" because it is established before the signature of the authentic and final act of sale.
The preliminary sale agreement is made after the acceptance of the purchase offer and as soon as the different parties are in agreement on all the elements constituting the sale contract, in particular: the price, the clauses or the suspensive conditions.
The preliminary sales agreement can be signed privately or with a notary.
Process of a provisional sale agreement
THE DIFFERENT PARTIES INVOLVED
In the context of a provisional sale agreement, the various parties involved are present: buyers and sellers as well as the representative real estate agency, if applicable.
The preliminary sales agreement can take place either directly at the real estate agency, but most often, the preliminary sales agreement is drawn up at the notary's office.
The preliminary sales agreement is a real contractual and reciprocal commitment on the part of the sellers and buyers.
Moreover, when signing the compromise, the buyer must pay a deposit on the sale price. This deposit corresponds to a range of 5 to 10% of the sale price of the property, depending on the jurisdiction. This "deposit" is legally called "security deposit".
THE ELEMENTS PRESENT IN THE PRELIMINARY SALES AGREEMENT
The preliminary sales agreement is most often drafted by a notary and thus allows for impartial neutrality and the conclusion of an official contractual commitment.
More precisely, the following elements must be included in a provisional sale agreement
The designation of the property, condition and diagnostics
The names of the buyers and sellers
The price
The nature of the financing
Taxes and duties
The right of withdrawal and penalties
Clauses: suspensive conditions (e.g. obtaining a loan or a building permit)
The date of reiteration of the deed of sale
However, at the end of the signature of this "contract" of sale, the buyer has an incompressible ten-day retraction period which allows him to go back on this commitment, without any reason, whether it is a promise of sale or a compromise signed under private signature at a notary's office.
The advantages of a compromise sale
COMMITMENT
The seller and the buyer agree and seal their contract through the official signature of a preliminary sales agreement.
This contract is contractually binding on both parties. Indeed, if all the elements of the preliminary sales agreement have been respected, the seller has the obligation to sell as well as the buyer has the obligation to buy.
If the buyer is no longer able to buy and is responsible for this situation, the deposit paid at the time of the compromise will not be returned.
In the same way, the salesman as well as the real estate agency in charge of the mediation can, if they wish it, ask for damages to the purchaser.
"The compromise sale is worth selling when there is an agreement on the thing and on the price" (art. 1589 of the Civil Code).
PROTECTION
The signature of a compromise of sale before a notary is strongly advised.
Indeed, the compromise drafted by a notary allows to protect the different parties involved and thus to ensure justice and impartiality of the measures, in particular in case of litigation.
As soon as the sellers and buyers agree to sign a preliminary sales agreement, they are committed. Consequently, if one of the parties were to withdraw, it would have to pay damages.
In addition, the ALUR law of March 24, 2014 reinforces the protection of a compromise sale for a property. Indeed, the ALUR Law imposes the presence of several mandatory mentions and documents in the file. In particular when selling a property in co-ownership the seller must provide the buyer with:
The co-ownership regulations and their amendments
The maintenance booklet
The last 3 minutes of the general assembly
The financial situation of the co-ownership
The seller's financial situation with regard to the co-ownership
Diagnostics of the private portions (also mandatory for the sale of a residential property that is not located in a condominium)
Once a preliminary sales agreement has been signed, the parties involved only have to wait for the final deed of sale to be signed before a notary, which will corroborate all the elements contained in the previously signed preliminary sales agreement.
In conclusion, it appears that the preliminary sales agreement in a real estate transaction is a contract that is mutually accepted by the various parties involved. It comes into play after the acceptance of the offer to purchase and before the signing of the deed of sale. This contract must include many elements so that it does not lapse.
The more detailed the compromise is and the more precise the elements of sale, the less there are subjects of discord. Finally, although it is not obligatory to have the preliminary sales agreement drawn up by a civil registrar, it is nevertheless true that a preliminary sales agreement drawn up by a notary is a guarantee of justice and protection for all parties involved.
The preliminary sale agreement is made after the acceptance of the purchase offer and as soon as the different parties are in agreement on all the elements constituting the sale contract, in particular: the price, the clauses or the suspensive conditions.
The preliminary sales agreement can be signed privately or with a notary.
Process of a provisional sale agreement
THE DIFFERENT PARTIES INVOLVED
In the context of a provisional sale agreement, the various parties involved are present: buyers and sellers as well as the representative real estate agency, if applicable.
The preliminary sales agreement can take place either directly at the real estate agency, but most often, the preliminary sales agreement is drawn up at the notary's office.
The preliminary sales agreement is a real contractual and reciprocal commitment on the part of the sellers and buyers.
Moreover, when signing the compromise, the buyer must pay a deposit on the sale price. This deposit corresponds to a range of 5 to 10% of the sale price of the property, depending on the jurisdiction. This "deposit" is legally called "security deposit".
THE ELEMENTS PRESENT IN THE PRELIMINARY SALES AGREEMENT
The preliminary sales agreement is most often drafted by a notary and thus allows for impartial neutrality and the conclusion of an official contractual commitment.
More precisely, the following elements must be included in a provisional sale agreement
The designation of the property, condition and diagnostics
The names of the buyers and sellers
The price
The nature of the financing
Taxes and duties
The right of withdrawal and penalties
Clauses: suspensive conditions (e.g. obtaining a loan or a building permit)
The date of reiteration of the deed of sale
However, at the end of the signature of this "contract" of sale, the buyer has an incompressible ten-day retraction period which allows him to go back on this commitment, without any reason, whether it is a promise of sale or a compromise signed under private signature at a notary's office.
The advantages of a compromise sale
COMMITMENT
The seller and the buyer agree and seal their contract through the official signature of a preliminary sales agreement.
This contract is contractually binding on both parties. Indeed, if all the elements of the preliminary sales agreement have been respected, the seller has the obligation to sell as well as the buyer has the obligation to buy.
If the buyer is no longer able to buy and is responsible for this situation, the deposit paid at the time of the compromise will not be returned.
In the same way, the salesman as well as the real estate agency in charge of the mediation can, if they wish it, ask for damages to the purchaser.
"The compromise sale is worth selling when there is an agreement on the thing and on the price" (art. 1589 of the Civil Code).
PROTECTION
The signature of a compromise of sale before a notary is strongly advised.
Indeed, the compromise drafted by a notary allows to protect the different parties involved and thus to ensure justice and impartiality of the measures, in particular in case of litigation.
As soon as the sellers and buyers agree to sign a preliminary sales agreement, they are committed. Consequently, if one of the parties were to withdraw, it would have to pay damages.
In addition, the ALUR law of March 24, 2014 reinforces the protection of a compromise sale for a property. Indeed, the ALUR Law imposes the presence of several mandatory mentions and documents in the file. In particular when selling a property in co-ownership the seller must provide the buyer with:
The co-ownership regulations and their amendments
The maintenance booklet
The last 3 minutes of the general assembly
The financial situation of the co-ownership
The seller's financial situation with regard to the co-ownership
Diagnostics of the private portions (also mandatory for the sale of a residential property that is not located in a condominium)
Once a preliminary sales agreement has been signed, the parties involved only have to wait for the final deed of sale to be signed before a notary, which will corroborate all the elements contained in the previously signed preliminary sales agreement.
In conclusion, it appears that the preliminary sales agreement in a real estate transaction is a contract that is mutually accepted by the various parties involved. It comes into play after the acceptance of the offer to purchase and before the signing of the deed of sale. This contract must include many elements so that it does not lapse.
The more detailed the compromise is and the more precise the elements of sale, the less there are subjects of discord. Finally, although it is not obligatory to have the preliminary sales agreement drawn up by a civil registrar, it is nevertheless true that a preliminary sales agreement drawn up by a notary is a guarantee of justice and protection for all parties involved.