Purchase Agreement

This agreement outlines the terms and conditions of the sale, including the purchase price, any contingencies, and the expected closing date.

When buying a home, it is essential to know what is in the preliminary purchase agreement and the obligations of both parties. 'Preliminary' is an incorrect term because the provisions bind you to it contains after signing it. The term preliminary purchase agreement was created to distinguish it from the final deed at the notary.

What does the purchase agreement contain?

There are standard formats for the purchase agreement prepared by different brokerage branches. The sales broker is responsible for drafting the purchase agreement, processing the buyer's and seller's personal data, and processing the provisions as indicated in the buyer's offer letter.

Only in Amsterdam, it is not the seller's real estate agent but the notary who draws up the sales contract. If the seller's real estate agent draws up the purchase contract, the buyer (or the buyer's agent) should check it carefully. After all, the seller's real estate agent works for the seller and is therefore not impartial.

Obligations of the buyer

The purchase agreement also describes the buyer's obligations. These include a down payment after a specific deadline or providing a bank guarantee instead. After signing, the purchase agreement can only be dissolved within the legal 3-day cooling-off period (not counting weekends). Only the buyer and not the seller is entitled to a cooling-off period. After those three days, the contract can only be terminated if one of the resolutive conditions is invoked. Only when the terms of those resolutive conditions have expired is the deal set. If you, as a buyer, let the term of the resolutive condition for financing expire and you do not obtain the loan so that you can not buy the house, then you can expect a substantial fine. That's usually 10% of the purchase price, without prejudice to the right to further compensation. A good buying agent will help remind you of these deadlines promptly.

Obligations of the seller

The seller also has obligations to the buyer to transfer the property. These include providing all relevant documents and delivering the home in the condition it was in when the deal was made.

Upon transfer, the property must be empty, broom clean, and free of non-agreed furniture or tenants. However, sellers can indemnify themselves from several obligations in advance by including clauses in the purchase agreement. For example, age and non-self-occupancy clauses can limit the seller's qualitative delivery obligations. In that case, there is no recourse against the sellers should the quality of the property fall short. After all, the clauses state that mediocre quality was to be expected.

Registering purchase agreement

The seller is not allowed to sell the property to another buyer. If this does happen, the seller is obliged to pay a penalty of usually 10% of the agreed purchase price without prejudice to the right to further damages.

To be covered entirely against this as a buyer, there is an option to register the purchase agreement with the notary. This does incur notary fees, but with a registered purchase agreement, any notary will stop a possible sale to another buyer or third-party claims.