Whether you are an investor in real estate or you decide to purchase a principal residence or land, the law requires to sign a document called a "private agreement" or more familiarly "under hand".
Contrary to the deed that completes the sale of the property, the private agreement does not require the intervention of a notary. You can sign a private agreement in the presence of a real estate agent or lawyer for example. This contract is considered a promise of sale. Called promise indenture or reciprocal promise of sale, this contract must include a deadline to sign the deed. It is also customary that the buyer pays a deposit to a vendor of about 10% of the total property. This sum will obviously be deducted from the final price.
But to preserve both the future buyer and seller of the property, the private document must be accompanied by safeguards called "suspensive clauses. These clauses are precedent because they do not depend on the will or the buyer or the seller.
The precedent-clauses related to the buyer.
They are mainly related to obtaining a loan to purchase the property.
Indeed, in most cases, the buyer asks for a mortgage to its bank or financial institution. If the loan is not granted, the sale will not occur, the deposit will be refunded or not charged and the agent, if any, will not receive his commission. Please note that registration at the Conservatory of mortgage of the property is considered a suspension clause, as well as the right of first refusal by the mayor of the municipality where the property.
The precedent-clauses related to the seller.
The seller is responsible to deliver goods in good condition. The suspensive clauses are mainly linked to possible work on such treatment of termites, detection of lead or asbestos in the housing. Note that the vendor must work for, or reduce the price when the value of this work.
In any case, know that all trades on condition that a private document is well written and accurate.
Example: You are a buyer and you have signed a private agreement including a deadline. If this date is exceeded, you are entitled to recover your deposit and cancel the sale. But why not in this case ask the seller to lower its price and conclude the matter anyway?
Remember the private writing:
No mandatory presence of a notary.
It must be very well detailed with a deadline.
The clauses are binding precedent and preserve everyone's interests.
A withdrawal period of seven days is given to the parties.
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