Drawing up a provisional purchase contract
You have found a house that you would like to buy, congratulations! After several viewings, you’ve made an offer to the seller. After some negotiations, the seller accepts your bid and a provisional purchase contract is drawn up. The provisional purchase contract is also referred to as the purchase deed and it is signed by you and the seller. What does this document entail and what do you need to pay attention to?
When do you sign a provisional purchase contract?
You sign a provisional purchase contract if you agree on the purchase price. This document is the official purchase deed in which you record all agreements about the property you want to buy. Examples include the purchase price, the date of transfer, the payment and any resolutive conditions. The contract also stipulates which items are left behind in the house. If you negotiate well, curtains, etc. are often included in the purchase price. If not, you’ll have to make separate price agreements per item.
This phase is very important during the entire purchase process. This is the time that a lot of people can use some help! Are you a strong negotiator and can you assess the condition of the house yourself? If not, you’d be wise to engage a property purchase consultant. A property purchase consultant will join you during viewings and do all the hard work for you. He can also help you draw up the resolutive conditions.
Can you dissolve the provisional purchase contract?
The term provisional purchase contract is misleading. After signing the contract, you have, in fact, committed to the purchase of your home. As a buyer, you are legally entitled to change your mind within 3 days and opt out of the purchase without having to state the reasons. Note that the reflection period starts as soon as you have received the purchase deed and not from the moment you sign! Before you sign, it is wise to have a structural survey conducted. This will reveal any hidden defects and you know exactly what you are buying.
Why resolutive conditions?
If you do not opt out of the purchase within 3 days, the purchase is deemed to be final. If for whatever reason, you subsequently decide not to go ahead with the purchase after all, you have to pay a fine. Normally, this fine is around 10% of the purchase price. In order to prevent this, you can have certain resolutive conditions included in the provisional purchase contract. If for example, you are unable to obtain a mortgage, you don’t have to pay a fine.
What resolutive conditions are often included in the purchase deed?
- You are unable to obtain financing;
- You are unable to take out a mortgage with inclusion in the National Mortgage Guarantee scheme;
- A structural survey reveals that the house is in a poor condition;
- You still own a property yourself that you want to sell within a fixed period!
Reserve ample time for arranging the financing. A total time of 2 months should be sufficient to arrange everything. Note: if you want to opt out of the purchase on account of one of the resolutive conditions, you must be able to demonstrate it!
What step follows after the purchase contract?
You can take the signed purchase deed to Freek Hypotheek or a mortgage lender of your choice. If financing has been included as resolutive condition, it is wise to arrange this straight away. The advantage of Freek Hypotheek is that the initial meeting you have with them is entirely without obligation. They assess your situation and determine what they can do for you.