The promise to buy a house is a document that is not lightly signed.
The signing of such a contract has legal consequences. Here’s everything you need to know before you commit by signing the promise to purchase a home. With, the elements that will have to be included at your request to protect you.
Offer to purchase: definition
The offer to purchase, or promise to purchase, is a contract that governs the future sale of real estate. Being a contract, this promise commits you to hold it, otherwise you risk being sanctioned by a financial penalty. That is why it is necessary to take good knowledge of all its clauses. If you sign and then realize that a detail is crummy, it could cost you a lot. Indeed, in the vast majority of cases cancellation without costs is not possible. A major exception however: if it is a new property, you have a right of withdrawal of 10 days (with or without payment of a penalty depending on the contract).
Promise to purchase: the things to watch out for
Before committing yourself, you must obtain answers to the following questions:
- Has the property been damaged, has it been compensated by an insurance company?
- Is the property subject to legal proceedings (class action, complaint against the builder, etc.)?
- Is the land on which the property is located in a flood zone on an old marshland?
- If it is an old property, how much was it acquired by the current owner?
- Evaluation of the market value of housing (via an expert or by comparing with selling prices in the area where the property is located).
- Is the property subject to easements?
What the offer to purchase must include
It is of course the seller who writes the offer to purchase. But, nothing prevents you from imposing the addition of your clauses. The promise to purchase should for example provide that in case of refusal of mortgage, the promise is canceled without charge. You can also ask the seller to provide a report on the condition of the house, which confirms that the house has no major defects. If you already own a house or condo whose proceeds of sale are used to finance your purchase, you can also include a clause stating that the promise to purchase will be executed once your own transaction is finalized.
If you are granted with the owner on the inclusion of certain elements of the contents (furniture, children’s games in the garden, etc.), include these agreements in writing in the promise. On the contrary, if you absolutely want to see old things disappear, mention it also on the document.