Is a letter of intent to purchase binding?

  • Erstellt am 2019-10-08 16:00:48

markusPI

2019-10-16 02:36:12
  • #1
Wing7 has already largely described the legal situation correctly. But the actual problem lies completely elsewhere: The potential BUYER should generally aim to secure the seller firmly and bind him to the deal. Because in practice, in reasonably decent locations nowadays, there are usually several bidders. Often even higher prices are paid for existing properties than announced, especially if you wait a long time, and then it doesn’t help to have legally ensured which obligations you do not have by signing a piece of paper. Therefore, it is advisable to proceed in the following order:

1. Inquiry at 2-3 banks about the possible financial framework with disclosure of any creditworthiness issues. An indicative commitment is initially completely sufficient. (best if the bank writes a short note; but verbally is sufficient in an emergency)

2. Remote/online study of the property offers and already strong filtering of properties that are not suitable.

3. On-site inspection of the still eligible properties within a short period of a few days (preferably directly with an expert. It doesn’t necessarily need to be a full professional. Usually, you also have engineers, installers, etc. in your circle of acquaintances who you can bring along and who can take a closer look at insulation, heating system, facade, possibly roof, etc.).

4. If liked, signal strong interest to the seller, request 1-2 more days’ time. In this time, complete the remaining inspections, reflect and make the decision.

5. Contact the seller and ask him to sign the notarized preliminary contract.

6. Sign the final contract

Everything else often does not lead to the desired success. (often heard from acquaintances) Such an approach stands out from the crowd, and the seller thinks that he is dealing with someone serious (if the financing is already secured directly (bring the note from the bank) and additionally the expert is also immediately present). Other approaches can work but, as said, often do not lead to success with sought-after properties.

If one has not yet conducted bank talks – as in the specific case – then a contract providing for a conditional purchase can also be drafted (for example, under the condition that financing comes about at all/under certain conditions or that the yet-to-be-involved expert gives his approval, etc.). In principle, everything can be agreed upon as long as it is not immoral, i.e. does not violate fundamental legal principles. However, it is clear, of course, the more conditions are written into such a preliminary contract by the buyer, the less the seller will be willing to actually sell, as there are still thousands of others. Therefore, better to apply the above scheme.
 

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