You have finally found the home of your dreams! All you have to do is prepare an offer to purchase informing of your desire to acquire the property. But what exactly is it? What is it committing you to? We explain …
The Offer to Purchase: What is it?
The offer to purchase, also known as the letter of intent, is written by the potential purchaser of a property … As its name suggests, you are attempting, under the aegis of an official document, to formalize your commitment to the owner by reserving the house, land or apartment initially put up for sale in the form of a letter.
The said document can be drafted with the help of a legal adviser or a professional of the ‘real estate. It must contain the price offered and a period of validity of the offer. The letter of offer to purchase must be hand-delivered to the seller, or sent with acknowledgment of receipt. It is a legal act, so it is important to write it well.
What is the level of engagement?
Following an offer to purchase, the seller can react with: a counter-offer, a refusal or an acceptance … If your offer is accepted, you commit yourself as a future buyer. You will then have to sign a sales agreement.
Note that there is an exceptional condition allowing you to opt out in case your request for a bank loan is refused. However, it must be mentioned in the letter of intent that the price of the sale will be paid through a loan, whether partial or total. In the event that you get your loan, then your commitment to the sale becomes final.
Can you go back?
After signing the sales agreement, you will only have 10 days to reconsider your decision. After this period, if you decide to retract, the seller will be entitled to claim damages from you.
Legally, you are not required to pay a deposit during the offer to purchase in case of cancellation thereof. Normally, it is only upon signing the sales agreement that it is advisable to complete the negotiation by paying the seller a deposit. In the event of late withdrawal of the sales agreement, he will be entitled to keep this sum, or to request compensation. However, you can decide but are not compelled at this stage to make a partial financial exchange to the seller. This will give him a guarantee as to your true intention to buy and your apparent creditworthiness.