“Promesse de Vente” (aka «  Preliminary Contract ») or “Compromis de Vente” (aka « Sales Agreement »)

Two contracts with different consequences for the buyer and the seller.

A Preliminary Contract (Promesse De Vente) and a Sales Agreement (Compromis De Vente) are legal documents with very precise obligations for both parties and very specific conditions.

A PROMESSE DE VENTE (Preliminary Contract)

The vendor agrees to sell to a potential buyer a property at a set price with an exclusive “option” for a limited time-period (generally two to three months).

During this option period, the vendor is forbidden to offer the property to another purchaser or cancel the sale. The buyer, on the other hand, can use this option period to decide whether or not to buy.

In order for the preliminary contract to be valid, it must be registered with the tax office or with the Notaire (cost is 125 EUR) and a confinement deposit fee (5 to 10% of the sale price) must be paid to the seller.

If the acquisition is moves forward, the deposit fee will become part of the buyer’s personal contribution to finalize the purchase of the property.

If the buyer does not confirm his or her intention within the option period or voids to purchase the property, the vendor collects the deposit fee as compensation. There are a few exceptions:

  • The project is cancelled during the legal retraction period of 10 days
  • The buyers’ financing is not approved

A COMPROMIS DE VENTE (Sales Agreement)

The seller and buyer both agree to fulfill the transaction at a set price. This is a sales contract. If one of the parties cancels the transaction, the other can force the latter to conclude the purchase through legal means with the same exceptions as with the preliminary contract (project cancelled during the 10 day legal retraction period and/or financing is not approved)

Signing the sales agreement requires the buyer to pay an escrow deposit (1% and 10% of the sale price). The escrow deposit will be deducted from the purchase price when you sign your title deed.

Unlike the preliminary contract, the sales agreement does not require to be registered with the tax authorities but the buyer must rely on an amicable agreement or court decision to cancel the purchase.

Both contracts have a legal withdrawal period

You have a legal period of ten days to reconsider your commitment to purchase a property. Regardless of your reason, you may cancel the purchase within the 10 day withdrawal period by certified delivery letter and be refunded in full.

Negotiate the escrow deposit or confinement deposit fee before drafting your contract

The amount may vary with the type of contract (1% to 10% of the purchase price) but it is negotiable. Do not hesitate to question the Notaire and/or Real Estate Agent.

Customize your contract with commitment exceptions (aka “Conditions Suspensives” in French)

The buyer and seller can add suspensive clauses (commitment exceptions) to a preliminary contract or sales agreement to allow both parties to cancel the purchase and for the deposit to be refunded . The most common suspensive clauses for the buyer are:

  • Loan refusal from lender
  • Township and county commission right of preemption acted on the land or the property
  • Discovery of new mandatory easements and/or urban constraints imposed on the new owner of a property

Have your contracts drawn out by a professional

It is highly recommended to entrust the drafting of a preliminary contract or sales agreement to a professional. A Notaire or real estate agent has the duty to inform both parties on the content of the paperwork and verify that all the legal documents are attached. The cost is included in the real estate agent’s commission or the Notaire’s fees.

Our dedicated team of brokers can determine your mortgage capacity and review the efficiency of your financing to ensure you are receiving the right mortgage solution for your purchase in France.