The sales agreement is a key step in any real estate purchase. This preliminary contract commits both the seller and the buyer, and sets all the conditions of the future transaction. Although it is only a preliminary contract, its signing has significant legal and financial consequences. So, how does it work in practice? What is the difference with a promise to sell and what happens in case of withdrawal? Let’s take a look together!
Sommaire
Understanding the nature of the sales agreement
What exactly is a sales agreement?
The sales agreement is a preliminary contract where both the seller and the buyer commit definitively. This document precisely sets all the conditions of the sale, which will then be included in the final deed signed at the notary’s office. From a legal point of view, its signing already amounts to a sale, provided that the suspensive conditions included in the contract are fulfilled.
What information must it obligatorily contain?
To be valid, a sales agreement must contain several mandatory pieces of information, such as:
- The full identity of the seller and the buyer;
- The detailed description of the real estate property and its address;
- The sale price and payment terms, as well as the amount of the deposit;
- Any mortgages, easements, and suspensive conditions, the most common of which is obtaining a loan.
The concrete process, from signing to the final deed
Step 1: drafting and signing the document
To draft the agreement, there are two options: to make the sales agreement at the notary’s office or to do it under private signature, that is, directly between the parties or through a real estate agency. The notary provides legal security and neutral advice. Today, the document can be signed either traditionally on paper or electronically.
Step 2: exercising the right of withdrawal
Once the agreement is signed, the non-professional buyer has the right to change their mind. They have a 10-day withdrawal period, which starts the day after receiving the signed agreement by registered letter.
Our advice: if the buyer wishes to cancel the agreement, they must send a registered letter with acknowledgment of receipt to the seller before the deadline expires.
Step 3: fulfillment of suspensive conditions
The most common suspensive condition is the buyer obtaining a mortgage loan. Other conditions may also be involved, such as obtaining a building permit or verifying that the town hall does not exercise its right of preemption. The contract generally provides a period of 45 to 60 days for these conditions to be fulfilled.
Thus, respecting these steps is crucial to secure the transaction.
Financial and legal aspects not to be overlooked
What happens if one of the parties withdraws?
If the buyer withdraws within the legal 10-day period, they recover the entire deposit without any penalty. Likewise, if a suspensive condition is not fulfilled through no fault of their own (for example, a loan refusal), the agreement is then canceled. However, if a party withdraws without valid reason, the other may either enforce the sale through the courts or claim damages provided by the penalty clause of the contract.
What is the cost associated with a sales agreement?
Having a sales agreement drafted by a notary generally costs a few hundred euros. At the time of signing, the buyer also pays a deposit, the amount of which is most often between 5% and 10% of the sale price. This sum is held in an account at the notary’s office or the real estate agent’s until the final sale. Additionally, fiscal registration fees may sometimes be added if the agreement is signed without a notary and lasts more than 18 months.