The purchase offer is an extremely important document in the negotiations leading to the acquisition of a new property. It is the contract by which the buyer agrees to purchase the property that is the subject of the offer. In return, the seller who accepts the purchase offer commits to selling under the conditions determined therein.
The purchase offer will include the identification of both parties as well as a description as detailed as possible of the property (address, cadastral designation, measurements and area of the land). It will also be necessary to specify, if applicable, whether the property offered is held in divided co-ownership and if it has parking spaces and storage areas.
The purchase offer should also specify the sale price and the deposit given upon acceptance of the offer, the proposed date of the transaction, the inclusions and exclusions, the preparation of a location certificate, etc. The purchase offer should also include a date at which it will become null to allow the property to be put back on the real estate market if the preconditions contained in the purchase offer are not fulfilled.
The purchase offer should include a clause stating that the buyer will have the building inspected within a reasonable time and that their final acceptance is conditional upon satisfactory results from this inspection. The purchase offer must also be conditional on this building inspection to avoid any unpleasant surprises. The inspection carried out by a professional building inspector is a step that should not be neglected. The inspection report must not only describe the current condition of the property, but also provide an overview of the work that will be necessary in the coming years. This will allow you to assess the quality of the construction, evaluate the potential financial contribution you may need to make in the years to come, and avoid unexpected expenses. It is important, at this stage, to choose a recognized building inspector and, above all, to carefully read the inspection report relating to your property. Another undeniable advantage of a pre-purchase inspection is that if a problem arises after the sale, the inspector can be an important witness. They can generally confirm that the defect existed at the time of the sale. They will also be able to present to the court an evaluation of the costs of repair and restoration.
The purchase offer should also be conditional on the buyer obtaining mortgage financing and an environmental study. Finally, the purchase offer may contain a clause providing for a property appraisal.
For their part, the seller must ensure that the property is free of hidden defects. They should also declare that they are not aware of any information that could diminish the value of the property (rezoning, etc.). The seller will remain responsible for defects they were aware of but did not disclose to the buyer. In certain municipalities, the seller must be able to prove that the property complies with municipal requirements regarding water supply, sewer, septic systems, etc.
The purchase offer therefore binds both parties. Failure to comply with the purchase offer can have serious legal consequences for the party refusing to honour it. If it is the seller who refuses to execute the purchase offer, the buyer may request that the court compel them to sell under the conditions stipulated in the purchase offer. Conversely, if the buyer no longer wishes to fulfill their obligation, the seller may obtain a court order condemning the buyer to pay damages for any harm caused.
A buyer of a commercial building must insist on being able to visit the property and review the leases if applicable. They must know if there are any rents or deposits that have been collected in advance, which tenants are behind in their payments, and also be aware of the amount of expenses and annual income from the property.
Our team of notaries can draft your purchase offer for a single-family residence. Ideally, we can assist you in drafting your purchase offer before you submit it to the seller.
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