Promise to sell or provisional sale agreement: find out the precise difference now!

Promise to Sell or Sales Agreement—it's hard to tell the difference… Fortunately, at Deplanche Immobilier France, we explain everything! When buying or selling a property, it is common to sign a document that formalizes the agreement between the parties. However, there are two types of documents that can be used: the "promise to sell" and the "sales agreement." Although these terms are often confused, it is important to understand their differences to avoid any confusion or misunderstanding. In this article, we will examine the differences between the promise to sell and the sales agreement.

The Promise to Sell

In the promise to sell (also called a "unilateral promise to sell"), the owner commits to selling their property to the potential buyer (called the beneficiary) at a determined price. This gives the buyer an exclusive "option" for a limited period (usually two to three months).

During this period, the seller is prohibited from withdrawing from the sale or offering the property to another buyer. The potential buyer benefits from this promise to decide whether they want to purchase or not—an undeniable advantage! In return, the buyer pays the seller an immobilization fee, usually equal to 10% of the sale price. If they decide to proceed with the purchase, this amount will be deducted from the total payment. However, if they decide not to proceed or fail to confirm within the option period, the seller keeps the fee as compensation, unless one of the suspensive conditions in the preliminary contract is met—for example, if the buyer is unable to secure financing.

To be valid, the promise to sell must be registered with the tax office within 10 days of signing. Additionally, if the agreement lasts longer than 18 months, it must be executed as an authentic deed. The registration fees, paid by the buyer, amount to €125. Buyers and sellers, eager to close the deal, sometimes assume that signing the preliminary contract does not carry significant commitment. This is false: despite its name, this preliminary agreement is a real "contract" that creates significant obligations for both parties. It allows them to specify the terms of the future sale and marks their agreement. Although not legally mandatory, this document is essential.

The Sales Agreement

In the sales agreement (also known as a "bilateral promise to sell"), both the seller and buyer commit to completing the sale at an agreed price. Legally, the sales agreement is equivalent to a sale. If one party withdraws from the transaction, the other can enforce it through legal action, potentially claiming damages.

Signing the sales agreement requires the buyer to pay an amount of about 5% to 10% of the sale price. This sum, known as the security deposit, will be deducted from the final price upon signing the notarial deed. Unlike the promise to sell, the sales agreement does not need to be registered with the tax authorities. This absence of fees is a significant advantage.

However, in case of disputes over the fulfillment of suspensive conditions, the parties remain bound by the sales agreement unless they reach an amicable settlement or a court decision is made. In contrast, with a unilateral promise to sell, both parties regain their freedom if the buyer does not exercise their option.