The Purchase Offer in Quebec: Your Contractual Commitment

The purchase offer (promesse d'achat) is the most important legal document in Quebec's property acquisition process. Drafted using standardized forms from the Organisme d'autoreglementation du courtage immobilier du Quebec (OACIQ), it formalizes the buyer's intention to acquire a property at a specified price and creates binding legal obligations for both parties under the Civil Code of Quebec. For first-time buyers, understanding this document thoroughly is essential to protecting your interests and avoiding unforeseen financial consequences.

Key Elements of the Purchase Offer

The purchase offer contains several essential elements: identification of the parties (buyer and seller), detailed property description (address, lot number, dimensions), the offered price, inclusions and exclusions (appliances, light fixtures, curtains), the desired possession date, the deposit amount and suspensive conditions. It also specifies the deadline for the seller to accept, refuse or present a counter-offer. The document further indicates whether the sale is made with or without legal warranty, a crucial element that determines the buyer's protection in case of hidden defects.

Essential Suspensive Conditions

• Financing condition: grants 10 to 21 days to obtain firm mortgage approval. Without this condition, the buyer is obligated to purchase even if they cannot secure a loan.
• Inspection condition: sets a deadline for a professional pre-purchase inspection and a satisfactory report. Allows withdrawal if major defects are discovered.
• Sale of existing property condition: protects buyers who must sell their current residence before finalizing the purchase. Often accompanied by a pre-emption clause.
• Appraisal condition: the lender may require that the estimated market value from a certified appraiser meets or exceeds the purchase price.
• Condominium document review condition: for condo purchases, allows verification of the contingency fund, meeting minutes and condominium bylaws.

The Deposit and Pre-Emption Clause

The deposit accompanying the purchase offer has no legal minimum in Quebec, but typically ranges from $1,000 to 5% of the purchase price. This amount is held in trust by the real estate broker or notary until closing. A higher deposit demonstrates the buyer's seriousness and can strengthen the offer in a competitive market. The pre-emption clause (or 72-hour clause) is a mechanism that allows the seller to accept a conditional offer while keeping the property on the market. If a better offer comes in, the initial buyer generally has 72 hours to waive all conditions or withdraw without penalty.

Deadlines and Obligations After Signing

1. Submitting the purchase offer: The offer is presented to the seller with an acceptance deadline (typically 24 to 48 hours). The seller may accept, refuse or present a counter-offer. A counter-offer cancels the original offer.
2. Fulfilling suspensive conditions: Upon acceptance, condition deadlines begin. The buyer must act diligently: submit the mortgage application, schedule the inspection and, if applicable, list their current property for sale.
3. Waiving conditions: The buyer must notify the seller in writing of each condition being waived within the prescribed deadlines. Once all conditions are waived, the purchase offer becomes unconditional and both parties are bound.
4. Transfer to the notary: The file is sent to the notary who proceeds with title searches, prepares the deeds and schedules the closing date in accordance with the agreed possession date.

Practical Tips for First-Time Buyers

For a first purchase, it is recommended to always include financing and inspection conditions, even in a competitive market. Work with an OACIQ-member real estate broker for drafting the offer, and make sure your mortgage broker is informed as soon as the purchase offer is submitted so they can expedite the approval process. Keep a copy of all signed documents and strictly respect all prescribed deadlines. Finally, do not hesitate to negotiate: the listed price is only a starting point, and inclusions, the possession date and conditions can all be discussed.

Understanding Counter-Offers and Multiple-Offer Situations

In Quebec's competitive real estate market, sellers frequently receive multiple offers simultaneously. When this occurs, the seller's broker must inform all parties that the property is subject to multiple offers. Each buyer then has the opportunity to submit their best and final offer. The seller may accept any offer, counter one or more offers, or reject all of them. A counter-offer from the seller cancels the original purchase offer entirely, and the buyer is under no obligation to accept the counter-offer. When evaluating competing offers, sellers consider not only the price but also the conditions, the deposit amount, the possession date flexibility and the buyer's financial credibility. A strong pre-approval letter from a reputable lender can make your offer stand out even if it is not the highest price. Your mortgage broker can provide documentation that demonstrates your financial readiness and strengthens your negotiating position.