What is the purchase agreement

You’re out with the seller and ready to sign the purchase agreement But what should you look out for and who should ideally draft the contract? Find out below.

What is a provisional purchase agreement?

A provisional purchase agreement, also known as a deed of sale or initial purchase agreement, is a legal document that sets out the main agreements on the purchase of a property. It confirms the buying intention of both parties and is usually used before the final purchase agreement is drafted and signed. A preliminary sales contract includes things like the price, purchase conditions and any resolutive conditions. It offers protection to both parties and ensures that all agreements are clearly and formally recorded.

How is a purchase agreement drawn up?

When drafting a purchase agreement, it is essential to clarify the sale details, such as the identity of the buyer and seller, the price and the property, and any conditions or restrictions. It is advisable to have the contract checked by a legal expert before signing it to ensure that it meets legal requirements and avoids future complications. The contract of sale is usually drafted by the seller or an estate agent on behalf of the seller. Drafting a thorough purchase agreement is crucial to avoid problems or misunderstandings about the terms of the sale. It is wise to seek professional advice when drafting a purchase contract so that all important issues are included and you can be sure the contract is legally conclusive. The buyer may also choose to have the purchase agreement drawn up and signed by a notary, which may be mandatory in some cases.

The 3-day cooling-off period

On the day of signing, you legally have 3 days of reflection time. The cooling-off period starts at 00:00 that night and weekends and public holidays do not count. For example, if you sign on a Thursday, your cooling-off period ends at 23:59 on the following Tuesday. If you decide to abandon the transaction within that time, there will be no financial consequences.

Completing the provisional purchase agreement

Completing a provisional purchase agreement is the final step in the purchase process. This is the moment when the legal responsibility of the property is officially transferred from the seller to the buyer. The process starts with the exchange of contracts between the parties and ends with the signing of the final purchase contract. It is essential to work closely with your estate agent, legal adviser or notary during this process to ensure that everything goes smoothly.

Roles and Responsibilities in the preliminary purchase agreement

In the preliminary purchase agreement, the seller, buyer and estate agent each have unique roles and responsibilities. The seller is responsible for providing all necessary documentation and information about the property, while the buyer is responsible for verifying this information and arranging financing. The broker plays an intermediary role between the two parties and ensures that the interests of both the buyer and the seller are protected.

Understanding the preliminary purchase agreement

The preliminary purchase agreement can be a complex document to understand, especially if you are not familiar with legal terminology. It is important to take the time to fully read and understand the contract before signing it. If you have any questions or doubts about the contents of the contract, discuss them with your estate agent, legal adviser or notary before proceeding.

Importance of the preliminary purchase agreement

The preliminary purchase agreement is an essential document in the home-buying process. It lays down the terms and details of the sale, such as the purchase price, the transfer process and any special conditions or restrictions. It also protects the buyer and seller’s interests by ensuring that both parties comply with their obligations.

Find notary here

Terms and conditions

Termination conditions are conditions that both the buyer and the seller agree to and include in the deed of sale. If it turns out afterwards that one of the parties does not meet these conditions, the contract can be dissolved free of charge. Dissolving conditions must be mentioned when the offer is made

Examples of resolutive conditions

Reservation of financing: if the buyer cannot get financing in the end, the contract can be cancelled free of charge.

Reservation of housing permits: In some cases, a housing permit is required. If it turns out afterwards that the buyer does not obtain this permit, the provisional sales contract can be dissolved free of charge.

Reservation of National Mortgage Guarantee: if the buyer wants to take out a mortgage with National Mortgage Guarantee and it turns out afterwards that he cannot claim it, the preliminary contract of sale can be dissolved.

Reservation of an architectural inspection: If an architectural inspection shows that there are problems with the condition of the house, the provisional sales contract can still be dissolved.

Reservation of alterations to the property: If the buyer intends to make major alterations or use the property for another purpose, permits must be obtained from the municipality. If this fails, the preliminary purchase contract can be dissolved subject to the alteration of the property.

It is important to include these resolutive conditions clearly and specifically in the preliminary sales contract so that both parties know under what circumstances the contract can be dissolved.

> Learn about the Notary’s role when buying a house.