This is a crucial step before the final sale of a property. After agreeing on the terms of the transaction, the seller and the buyer of a home will sign, in principle, a preliminary contract. Yes, but which one to choose?
Compromise, promise to sell or offer to purchase, for you, is it all the same? Be careful because these three procedures do not have the same consequences at all. Here’s what you need to know before choosing.
The promise of sale, an option for the buyer
Also called unilateral promise of sale (PUV), it allows the future buyer to benefit from an option for the purchase of the accommodation he covets. During this period of time, which generally lasts between 2 and 3 months, the owner is required to sell his property at a fixed price. In this interval, he has neither the right to offer it to another buyer, nor to waive the sale. He is smooth-footed.
But it has a sizeable counterpart. The buyer must pay the seller an indemnity which is around 10% of the sale price. If, in the end, he no longer wishes to buy the property or does not come forward during the period of validity of the option, he will not be able to recover the compensation. On the other hand, if he wishes to acquire the property, it will subtract the total sum to be paid.
Often in a hurry to conclude, buyer and seller sometimes imagine that signing the preliminary contract does not involve much. This is false: despite its name, this preliminary agreement constitutes a real contract, which entails important obligations for both parties. It allows them to specify the conditions of the future sale and marks their agreement. Although it is not legally obligatory, this document is therefore essential, specifies the site of notaries.
Promise or compromise of sale, who to contact?
The document can be produced directly between the seller and the buyer by private deed. A notary interviewed by MoneyVox estimates that around 1% of real estate transactions for individuals are done directly. A situation that arises when the amount is low (parking, maid’s room, etc.) or when the buyer has a large estate and does not need a mortgage. Another possibility: use the services of a notary who will draw up a authentic act. It is even mandatory when the period of validity of a promise or compromise is greater than 18 months.
Finally, and this is increasingly the case, the preliminary contract can be made through a real estate agent. Advantage: the procedure is faster. But to ensure that all the legal aspects have been examined with a magnifying glass, the parties do not hesitate to have the document examined beforehand by a notary, before signing it, even if it means paying additional fees.
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The compromise that is (almost) worth a sale
In this case, the synallagmatic promise of sale binds both the seller and the buyer. They undertake to carry out the term sale at a fixed price. Result, if one of the parties gives up, and the other does not agree, it can be forced to do so by a judge who can also award damages and interest. Generally a penal clause is inserted to oblige one of the two parties who would ultimately agree to pay a compensatory indemnity. Except that in practice, it is rather in court that the case is settled. In this context, choosing between the compromise or the PUV, the notary questioned by MoneyVox, believes that the latter is more flexible and makes it possible to avoid going before the judge in the event of disagreement.
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Beware the offer to purchase
This is the way for the future buyer to reserve a property under the conditions that he sets himself. Moreover, he did not pay any security deposit, under penalty of nullity of the offer according to article 1589-1 of the Civil Code. The written offer must contain a price and a validity period of one or two weeks.
Result, unlike the PUV or the sales agreement where you have a period of 10 days during which you can reconsider your commitment, the purchase offer does not include no withdrawal period. If the seller accepts the conditions of the offer, the prospective buyer is engaged. This document presented by some real estate agents is to be considered with caution. Indeed, its main characteristic is to engage only the buyer, not the seller, warns the site of notaries. However, if you opt for this solution, the buyer must consider including suspensive conditions.
Suspensive clauses
Including a suspensive clause in a preliminary contract allows each party to regain its freedom if the event mentioned materializes. In this case, the sums which had been paid by the purchaser are returned to him. The most common situations are the refusal of the mortgage or the exercise of the right of preemption by the municipality.
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