The promise of sale is a common contract in the real estate field. It is also called “unilateral promise of sale” and constitutes a contractual commitment between a seller and a potential buyer of real estate. Find out what a sales promise is, how it works and what are the obligations of each party.
The promise of sale is an important contract in the field of real estate, because it allows you to block the sale of real estate during a period of reflection.
What is a sales promise ?
The promise of sale is a contract by which the seller undertakes to sell real estate to a potential buyer., who for his part undertakes to purchase the property. It is a unilateral agreement, in which the seller undertakes to sell the good to the buyer, but the buyer is not obliged to buy the good.
The promise of sale is generally used to block the sale of real estate for a certain period, to allow the potential buyer to finalize the terms of the purchase. This period is called “reflection period” and it can be from a few weeks to a few months.
How does a sales promise work? ?
The promise to sell must be signed by both parties : The seller and the potential buyer. It must contain all the real estate information, like the address, the area, the sale price and payment terms.
The promise to sell can be accompanied by a immobilization allowance, which is paid by the potential buyer to the seller to block the sale during the reflection period. This compensation is generally of the order of 5% has 10% Real estate sale price.
During the reflection period, The potential buyer can take the time to finalize the methods of the purchase, as obtaining funding or making inspections on the property. If the buyer decides to abandon the purchase during this period, immobilization compensation may be lost.
If the buyer decides to buy the property, the promise of sale turns into an act of sale. The parties can then finalize the transaction and sign the deed of sale before a notary..
The obligations of the seller and the buyer
In a sales promise, the seller undertakes to sell the property to the potential buyer during the reflection period. He must also provide all information relating to the property, like the state of the property, co-ownership charges, THE real estate diagnostics, etc.
On his side, the potential buyer must pay the immobilization compensation to block the sale during the reflection period. He must also finalize the terms of the purchase during this period., as obtaining funding or making inspections on the property.