Purchase and sale agreement

What to know about the promissory note

In the promissory agreement there is only one promise, ie there is no guarantee that the buyer will acquire the property

 

The promissory purchase and sale agreement is a legal document, in which the two parties involved in the purchase and sale undertake such actions under certain conditions, depending on the requirements of each party. The realization of this type of contract does not require to buy a house.

 

This type of agreement precedes the definitive contractt, that is, it is a preliminary contract, being a relevant legal contractual figure in situations where, for example, the promised contract lacks a public deed, but it can not be carried out immediately because the object of the contract - the house - is not yet ready. This contract may also include the downpayment.

 

This contract shall contain:

  • Identification of stakeholders;

  • The identification of the property subject to the transaction;

  • The object of the business;

  • The price and form of payment (never accept checks or bank checks);

  • Reference to the loan requested, or to be requested, if applicable;

  • The deadline for the conclusion of the final contract - completion of the deed;

  • The specific clauses of the contract of sale, in accordance with the requirements of each party;

  • The explicit indication that the property will be sold free of burdens and charges;

  • The place and date of signing the purchase contract;

  • Penalties in case of not achieving the final agreement, in addition to those set by law;

  • The possibility of the parties to execute to specific performance of the contract, that requires the other party to fulfill the contract through a court action;

  • Signatures of the participants recognized in person in the notary.

 

Downpayment:

It is a sum of money delivered at the date of signing the preliminary contract, which guarantees the protection of both parties on how the promissory agreement results in a definitive contract. In case of non-compliance with this contract:

  • If the seller does not comply, he must return the double value of the sum to the other party;

  • If the buyer does not comply, the seller can keep the downpayment amount.

 

Make sure it includes:

  • Make sure it includes the complete identification information of both parts, the property and its housing / construction license, transaction price, form of payment, downpayment value, downpayment strengths and timing;

  • Do not forget to include the deadline for the execution of the final purchase contract;

  • Before signing the promissory contract, ensure the approval of your mortgage loan;

  • Make sure there are no liens or charges - such as mortgages - that affect the property you intend to acquire.