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.
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.
In addition, the offer to purchase usually provides certain conditions precedent, 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.
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