If you are not familiar with the buying process of a property, here is a little explanation about the different stages and steps, in particular the «Promissory purchase and sale agreement», also known as «Promissory agreement» which will be the foundation of your transaction because it contains all the important elements and details to close the deal.
The first stage is called: The pre-closing
You have found the property of your dreams, you are ready to buy it. You will then make an offer to the seller with the various conditions you want from the seller (e.g. price, furniture included or not, renovations to do before the official sale takes place, etc…). You will submit it to the seller and if he/she agrees, you will move to the closing process, the next stage.
In the closing process, the most important document is the “Promissory (purchase and sale) agreement”.
But what does it contains exactly and why is it important?
In the “Promissory agreement” you will find:
- the purchase price
- a description of the property that will be sold
- a full list of the furniture, items included within the property and in the purchase price
- obligations that the buyer must respect, the most important one being to pay the seller
- obligations that the seller must respect, the most important one being to provide the buyer with the property based on the characteristics that were agreed in the purchase and sell agreement.
- A date of when the physical possession will be delivered
- A certain date of when the transfer of title will take place
- Jurisdiction, which means the place where the agreement is executed
- Penalty clauses, to guarantee both the buyer and the seller, that if anything goes wrong, there will be some sort of indemnity or a legal security.
The “Promissory agreement” will then evolve and mature into the final document: The “Deed”. This last document will be formalized by a public notary, the last stage, is when the buyer pays all closing costs associated with transferring the deed in their name. And last but not least, that last document is submitted to the public registry for recording.
But as you can see the most important stage is the “Promissory agreement” because all the rest of the transaction ensues from that document.