- In Québec, the broker uses a mandatory promise to purchase form designed by the OACIQ.
- Your protections are in the conditions: financing, inspection, review of documents.
- A counter-proposal cancels the previous ones; the last one accepted governs.
What the promise contains
The form identifies the parties and the property, then sets the price offered and the deposit. The deposit shows you are serious; once the promise is accepted, it is placed in a trust account, and it comes back to you if the transaction does not go through. It is then applied to your down payment.
The promise also specifies the method of payment, including the new mortgage loan you undertake to obtain, with a rate not to be exceeded and a deadline. It sets the dates: signing of the deed of sale at the notary's, occupancy, tax adjustments. And it lists what is included and excluded: appliances, light fixtures, shed. What is not written is not included.
Your broker fills in each section with you and explains every clause. Ask all your questions before signing, not after.
The conditions that protect you
The conditions are what let you withdraw without penalty if something goes wrong. The three usual ones: obtaining financing within a given time, inspection of the building by a professional within a given time, and review of the seller's documents. For a condo, the declaration of co-ownership, the building's by-laws and the minutes of meetings are added. If you must sell your current property, that goes in as a condition too.
Each condition carries a deadline and a consequence. If financing is not obtained or if the inspection reveals a serious problem, you notify the seller in writing within the set time, and the promise becomes void. Past the deadline, the condition is deemed waived.
You will also receive the Declarations by the seller of the immovable form: a kind of report card on the house, filled in good faith by the seller. Year of construction, past water damage, condition of the roof, work done. Read it with your broker before writing your price.
The counter-proposal and the acceptance deadline
Your promise sets a date and time limit for the seller's answer. During that period, you cannot withdraw it. The seller can accept, refuse, or make a counter-proposal: another price, another date, one inclusion less.
Each counter-proposal cancels the previous ones. Your final agreement is the promise to purchase as amended by the last counter-proposal accepted. Your broker explains each change and drafts the answer on the required form. Once signed and accepted, the agreement binds you both: what follows is the conditions to fulfil.
Frequently asked questions
Can I change my mind after signing the promise to purchase?
Not freely. Once the promise is accepted, it binds you. You can withdraw only through an unfulfilled condition, within its deadline and in writing. That is why the conditions are thought through before signing, with your broker.
The promise to purchase binds you. Your protections are the conditions: financing, inspection, documents, each with its deadline. Read the seller's declarations form before setting your price.
- Ask your broker for a blank promise to purchase form and read it calmly.
- Set the three conditions and their deadlines with them.
- List what you want included, with the brand when possible.
- Plan the deposit: amount available and deadline to hand it over.
Sources : OACIQ, Buyer's guide (the promise to purchase, the counter-proposal, the seller's declarations) · CMHC, making an offer and closing the deal
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