Once the apartment of your dreams in your price range found, the next step is to make an offer to purchase, either verbally or in writing. Although the verbal option is legally valid, it is better to formalize it in writing. L’Organisme d’autoréglementation du courtage immobilier du Québec (OACIQ) (the Quebec Organization for the Self-Regulation of Real Estate Brokerage) imposes a rule of ethics, namely that all acting real estate brokers must record in writing the intention of the parties to enter into real estate transaction.
Due diligence
Before submitting an offer to purchase, it is essential to obtain the most accurate description possible of the desired property and the identity of the owner(s) in title. Indeed, anyone who signs an offer to purchase as a seller must have the power to do so. The lot number is usually the best way to designate the private portion you want to buy (for example: the apartment or the parking box). You can in principle identify these lots by consulting the declaration of co-ownership and find out who is co-owner through the government website Info-lot or the Registre foncier du Québec en ligne.
Verbal offer to purchase
A buyer wishing to acquire an apartment must often act quickly. This means negotiating on short notice. To speed up the process, a prospective buyer might be inclined to present a verbal offer. Is this approach legal and binding upon the parties?
Yes, a verbal agreement is legally valid, provided the persons involved have the capacity to transact. This type of agreement creates rights and obligations. In other words, the verbal offer to purchase is sufficient to give rise to a bilateral promise of purchase and sale. The courts have recognized it.
Even if the parties have not chosen the written form as a prior condition of sale, it binds them, in that the deed of sale will represent the manifestation of their mutual will. A note of caution: if one of the parties defaults, it may be difficult to prove the existence of a verbal contract before the court.
Written offer to purchase
Being in essence a prior-contract to the transaction, the written offer to purchase must be drafted with rigor and precision. Its drafting requires legal knowledge to avoid litigation. The wording must include all the conditions governing the sale and list the mutual obligations of the seller and the buyer. They will be included in the deed of sale. You thus must formalize the offer to purchase carefully.
The offer to purchase usually provides certain suspensive conditions that is to say that the seller will have to maintain his undertakings for a certain time, so that you can analyze the information and documents supplied. A condition precedent will allow you to opt out of the transaction, if the information obtained does is not to your complete satisfaction. Any deposit will then be recovered, and you will no longer be liable to the other party, who may no longer claim damages.
In addition, it is possible to find, on the Internet, different models of purchase offer. We must be aware that these forms contain clauses that are not adapted to all cases and especially to the particularities of divided co-ownership. These forms may not be suitable and may cause difficulties for an inexperienced seller or promising buyer. The latter could, for example, have the unpleasant surprise of learning that he must respect certain deadlines or be held responsible for the seller's unpaid common expenses.
Promise to purchase
Although the term "offer to purchase" is often used, the term "promise to purchase" is the one used when it involves a real estate broker. The Real Estate Brokerage Act and the Regulation respecting contracts and forms require real estate brokers to prepare and sign a written document by the parties to a promise to purchase for the acquisition of a fraction. The Organisme d'autoréglementation du courtage immobilier du Québec (OACIQ) provides them with a mandatory form that must serve as the basis for the promise to purchase in divided co-ownership. It is designed to record all the data relevant to the filing of a valid offer to purchase.
WHAT YOU SHOULD KNOW! Preparing an offer to purchase is an important step. It requires adequate knowledge. The assistance of an experienced real-estate broker knowledgeable in condo-law is an asset. He assists you to fill the various sections of the offer to purchase (promise to purchase), and give you valuable advice before you sign it.
WHAT TO KEEP IN MIND: The OACIQ has prepared, for immovables held in divided co-ownership, a promise to purchase mandatory form. It provides better protection for the public.
WARNING! There is no requirement to sign an offer to purchase so that it be valid. A mere verbal agreement suffices; it could be cause for concern to the seller, if a potential buyer does not abide
Return to the super file Offer to Purchase
