Private Sales Agreement: What You Need to Know Before Signing
Have you found the perfect property and are ready to buy? You have two options: hire a notary to ensure the legal certainty of the agreement or to ask the real estate agency handling the sale to draft the preliminary contract directly with the seller. This is referred to as a private preliminary sales agreement.
With our real estate agency in Paris's 16th arrondissement, our CENTURY 21 Auteuil Immobilier offices and Auteuil Seine, find out what information it should include, the benefits, and the precautions to take.
What is a private sales agreement?
A private sales agreement is a document signed by the buyer and the seller to formalize their agreement on a real estate transaction. It is drawn up without the involvement of a public official, hence its name “private agreement.” This contract sets forth the essential terms of the sale, such as the price, deadlines, and any conditions precedent. Its signing constitutes a firm commitment.
How does a private sales agreement differ from a preliminary sales agreement?
A private sales agreement involves a mutual commitment: the seller agrees to sell, and the buyer agrees to buy, subject to the fulfillment of the specified conditions.
Conversely, the preliminary sales agreement primarily binds the seller, while the buyer has the option to purchase the property, generally upon payment of a good-faith deposit. The preliminary agreement is therefore more legally binding, while the letter of intent offers the buyer greater flexibility.
What must a private sales agreement include?
A private sales agreement must include specific information to be legally valid. Among the essential elements are:
- The full identification of the parties (seller and buyer);
- A detailed description of the property;
- The sale price and payment terms;
- Conditions precedent (for example, obtaining a loan);
- The deadlines for signing the final deed;
- The amount of the down payment paid as collateral;
- Any easements or encumbrances on the property.
Each clause must be carefully drafted to avoid any ambiguity or future disputes.
How do you sign a private preliminary sales agreement without a notary?
It is possible to sign a private preliminary sales agreement without a notary, but this requires great care. The parties may draft the document themselves or seek assistance from a professional (such as a lawyer or real estate agent). Both parties’ signatures must appear on every page to avoid disputes. Each party must keep a copy of the signed document.
Good to Know : Although a notary is not required at this stage, it is strongly recommended to ensure legal validity.
What are the advantages of a private sales agreement?
A private sales agreement offers several advantages:
- It can be drafted and signed quickly, without having to wait for an appointment with a notary;
- Notary fees may be deferred until the final deed is executed.
It provides legal certainty by binding both parties to the transaction.
