The purchase of a home is, for the vast majority of people, the most important investment of their lives. Contrary to what is sometimes assumed, making an offer is legally binding. It is therefore essential to properly inform yourself about the property before submitting an offer. An offer should be drafted carefully and comprehensively to protect you against various undesirable scenarios.

1. What does ‘binding’ mean?

An offer is considered binding when it clearly and precisely specifies the property and the proposed price, without any reservations.

Property advertisements often mention an asking price. Does this amount constitute a binding offer from the seller? No. An advertised price is not considered an offer. In most cases, such publicity merely aims to inform the public that the property is for sale. The owner’s intention is simply to encourage interested buyers to submit an offer. Therefore, offering the advertised price does not automatically result in a sale.

2. When is a sale concluded?

A sale is concluded when the seller accepts the buyer’s offer. The seller must accept the offer fully and unconditionally, without any reservations. If the seller does not agree with the proposed price, they may reject the offer or invite the buyer to submit a new one.

3. Why is it important to inform yourself about the property before making an offer?

Drafting the sale agreement involves a series of searches and mandatory disclosures to ensure that the buyer is sufficiently informed about the condition of the property. However, this does not prevent the buyer from becoming legally bound even before the sale agreement is signed. Precisely because making an offer can lead to a binding sale, it is crucial to fully inform yourself about the property beforehand. Always pay close attention to the information provided in the property advertisement and never hesitate to request additional details from the seller.

4. What must an offer contain at a minimum?

In theory, an offer can be made orally. However, making an oral offer is not recommended. On the one hand, the buyer has no proof of their intentions; on the other hand, a proper offer should ideally include several elements in addition to the property and the price:

• The name of the buyer
• The address of the property
• The proposed price
• The validity period of the offer: stating an expiry date ensures that the buyer is not bound indefinitely
• The signature and the date

5. Why is it advisable to include a suspensive condition?

It is advisable for the buyer to include a “suspensive condition” in the offer. Such a condition makes the resulting sale agreement dependent on the fulfilment of a specific requirement (e.g., obtaining financing). This provides additional security for the buyer. For example, if financing cannot be obtained, the sale will not proceed.

In practice, a period of four weeks is often used for a financing-related suspensive condition, but the buyer determines this period based on their individual circumstances.

Example

A buyer signs an offer but discovers, just before signing the sale agreement, that the land is contaminated. They no longer wish to proceed with the purchase. If the offer included a suspensive condition requiring a soil certificate confirming that the land is not contaminated, the buyer is not bound by the sale.

Be cautious with text messages. A text message alone is not sufficient proof that an offer has been made. However, it may be considered a “beginning of proof,” which can be supplemented with other evidence (such as proof of prior contact between the buyer and the seller).

6. Why is it advisable to limit your offer in time?

Limiting the validity period of your offer ensures that you are not bound indefinitely. Without a time limit, your offer remains valid until the property is sold.

If you wish to make an offer on a property, do so in writing and, if in doubt, have it reviewed by a real estate professional.

7. When purchasing a property, a “deposit” must be paid. What is this?

When buying a property, it is customary for the buyer to pay a deposit (sometimes called an advance payment). Buyers typically pay between 5% and 10% of the agreed price. Paying a deposit demonstrates the seriousness of both parties when concluding the agreement.

The deposit provides additional security for both parties.

For the buyer:

The notary’s office must carry out numerous checks to ensure that the purchase is safe and legally valid. Until this is confirmed, the buyer’s deposit is not transferred to the seller. The money is “parked” in a protected escrow account to which neither party has access. This account is managed by the notary’s office, but the funds do not belong to it. Because the deposit has not yet been transferred to the seller, the seller’s creditors cannot seize it. If, for reasons beyond the buyer’s control, the purchase cannot proceed, the buyer is assured of recovering their deposit.

For the seller:

This rule also protects the seller. If the buyer ultimately fails to pay the balance of the purchase price within the agreed period, the seller may need to take legal action. Thanks to the deposit, the seller has access to a sum that can serve as compensation if the court terminates the sale agreement due to the buyer’s fault. The notary’s escrow account therefore protects both parties.

8. Do I pay the deposit directly to the seller?

No. It is strongly discouraged to pay the deposit directly to the seller. If the seller has debts, you risk losing the amount if the sale does not proceed. It is much safer to transfer the deposit to the notary’s protected escrow account. If the sale is handled by a real estate agent, the deposit may be paid into the agent’s escrow account. These accounts do not form part of the assets of the notary or the agent and are therefore protected from their creditors.

Source: Fednot