The promise to purchase is the materialization of falling in love with a property. After days, weeks or months of searching, the promise to purchase brings prospective buyers closer to the reality of their first purchase or life project.
To help you in your buying process, our realtors in Joliette explain everything you need to know to write a good offer and put all the chances on your side.
What is a promise to purchase?
An offer to purchase, also called a promise to purchase, is a legal proposal that commits you to purchase a property. It can either be oral or written in the form of a document. After the offer is made and accepted, the buyer is entitled to pay for a pre-purchase inspection.
Before making a promise to purchase, first-time home buyers are advised to learn about the property to be purchased, the procedures and possibilities for representation, as well as the market value of the property.
Who can fill out a promise to purchase form?
It all depends on the situation:
- Outside the real estate market: anyone can fill out a promise to purchase form, whether first time buyers or not
- In the real estate market: real estate brokers are in charge of drafting this document
Keep in mind that the drafting of the offer to purchase is a painstaking task and an incorrectly completed document can render the process null and void. In addition, the difficult communication between the buyer and seller explains why an intermediary such as a real estate broker, who specializes in drafting offers to purchase, should also be involved.
Should you not wish to hire them, you can contact lawyers who specialize in protecting you during the entire transaction.
What does a real estate broker check before drafting a promise to purchase?
Since the drafting of the promise to purchase can become a source of conflict, the collaborating broker (linked to the buyer) will carry out all the verification and management procedures.
Background check on the seller
First, if the seller is not represented by a registered broker, the agent will make inquiries about the seller. The agent will check the seller’s identity, credentials and psychological background.
Lot and property verification
Next, the broker will inquire about the property. They will make sure that the surface area and the lot number match those registered by the seller. This information must correspond to the land registry.
Verification of the legal warranty of quality
Only the seller can adopt the legal warranty of quality. This document ensures that if the buyer discovers a hidden defect after the purchase, only the previous owner can be held responsible. In the absence of this warranty, the future buyer will be responsible for the entire condition of the house, whether the defects were present before the purchase or not. This is why sellers prefer to sell without a warranty.
The broker will therefore inquire about the application of this warranty to ensure that the information is correct and advise the client in making a decision.
Clarifying payment terms
Is special financing required? Is there a down payment, a mortgage? Or even taxes to consider? These are all questions that need to be clarified before the promise to purchase is drawn up to guide buyers on their financing capabilities.
Detailing the terms of sale
The other role of the real estate broker is to ensure that the conditions of sale are accurate. Especially since these will play a role in the final real estate transaction.
The broker will ensure:
- The certificate of location is updated
- Compliance of the seller’s declaration
- Existence of renovation bills
- Compliance of the septic tank
- Water quality
The conditions of sale require a certain amount of expertise. This is why it is so important to choose the right real estate agent to represent you before starting the process.
Verification of the offer deadlines
Before the offer to purchase is made, the broker will ask how long a promise to purchase is valid. With this knowledge, the broker will ascertain the withdrawal time for the buyer and the limit before the seller withdraws to cancel an offer to purchase and accept a counteroffer.
How to prepare a promise to purchase with a real estate broker
Once the broker has gathered all the information on behalf of the buyer, they can begin to write the offer.
You can also find a promise to purchase template that is valid in Canada through the Organisme d’Autoréglementation du Courtage Immobilier du Québec (OACIQ).
1. Discuss the points and build the file
When drafting the offer, your broker will gather, together with the listing broker, the items mentioned above. They will also agree on other conditions including:
- Sale price
- Date of occupancy
- Date of the notarized deed
- Down payment, according to the financing conditions
- Whether the building is furnished (inclusions and exclusions)
- Deadline for acceptance
- Deadline and conditions for withdrawal
- Pre-purchase inspection report
- Zoning verification
Once the promise to purchase has been drafted, dated and signed, the collaborating broker will submit it to the listing broker to be transmitted to the seller.
2. Wait for the seller to respond
In the case where the promise to purchase is drafted by a representative, the buyer must wait for the response of the listing broker in order to know the seller’s final decision. A promise to purchase will be finalized when it is accepted by the seller. The deed of sale must then contain all the conditions accepted by the parties.
Contact Courtier Immobilier Lanaudière for your promise to purchase
The buying and selling process depends on communication between the two parties. This is why it is recommended to work with a real estate broker. The professionals at Courtier Immobilier Lanaudière are at your disposal to guide you and make a successful purchase.
With unmatched knowledge on the market of homes for sale in Lanaudière, we are the number one choice for helping you make your purchase in the Lanaudière region a reality. Contact us now and tell us about your project!
