Receipt of several promises to purchase?
Here’s how the Real Estate Brokerage Act protects you
Your property is for sale? It’s quite possible that you receive several promises to purchase (PP). Here is how the Real Estate Brokerage Act oversees the practices of professionals authorized by the OACIQ in this context.
Your broker must present you with all the proposals received, as soon as possible upon their receipt, regardless of the chronological order of their receipt, the identity of brokers or the circumstances surrounding the presentation of promises to purchase.
As set out in the Real Estate Brokerage Act and its regulations, real estate brokers are required to act with complete transparency and fairness at each step of a transaction. That’s why your broker must inform other brokers of the existence of any promise to purchase. However, he cannot disclose its content.
After the presentation of each promise to purchase, your broker will explain possible choices, such as:
- Accept one of the promises to purchase received;
- Make a counter-proposal to one of the buyers;
- Reject the promises to purchase received (see Right of refusal box).
Note: The promise to purchase has an acceptance period. If you do not respond to a promise to purchase, it becomes null and void. However, this does not mean that a seller who wishes to respond to the promise to purchase by a counter-proposal must do so within that period. Since the counter-proposal is the equivalent of a new promise to contract, it can be presented even after the expiry of the acceptance period of the promise to purchase.
Moreover, if a buyer is still interested in buying your property while the acceptance period of his promise to purchase has expired, his broker must complete a new promise to purchase on behalf of the buyer.
During the process, you may receive an offer enhanced by one of the buyers who already presented a promise to purchase. In fact, each buyer may modify his initial offer to make it more advantageous for the seller, as long as it is not accepted, expired or refused.