Jonathan H. from Bruges (West Flanders) spotted a beautiful house that was for sale through an estate agent and he sent in an offer for the house by e-mail. A day later Jonathan asked for time to think things over. However, as he was the highest bidder, the estate agent replied that his offer had already been accepted and that it was binding. If he were to withdraw the offer, he would be liable to make a damages payment equivalent to 10% of the asking price for the house. But is an offer made on a property via email or text message binding?
Notary Carol Bohyn told VRT News that “A bid by made by email, by text message or even a verbal bid can be binding. Buyers are not always aware of this. From the moment that the vendor has informed you that they have accepted your offer, the sale is legally closed. You can withdraw from the purchase, but that will have consequences."
However, there is an important nuance “As a buyer, when you make your offer, you must have received sufficient information to make a correct offer. If, for example, it later transpires that there are serious construction issues and you, as a buyer, were not made aware of this, you have grounds to withdraw your offer”.
You can your offer conditional
Before you make an offer, it is best to ask the advice of a notary. “If you want to buy a home through a real estate agent or through a civil-law notary, all the necessary documents and certificates are often already available and you as a buyer will have all the information at hand.
"But if you buy privately from a private individual, these certificates are usually not yet available. You can always include conditions in your offer. These can include a time limit (for example the offer is valid for two weeks) or administrative and financial conditions. You can also make an offer conditional on the purchase only going through if you get a mortgage or make it conditional on it being compliant with all planning regulations. A civil-law notary will certainly tell you which conditions are best to include in your offer”, Ms Bohyn told VRT News.
If you withdraw your offer because one of the conditions you set had not been met you will avoid having to make a compensation payment.
Compensation payment?
Jonathan H.'s problem was that if he failed to buy the house that he had made an offer on he would be liable to pay compensation equivalent to 10% of the asking price. Carol Bohyn told VRT News that “The 10% is not laid down in law. Standard contract law states that you are bound if you make an offer and if that offer is accepted by the vendor. The amount of compensation in the event of non-compliance with this obligation is not fixed. In many cases a detailed agreement drawn by the seller and the buyer often mentions a figure of that 10%”.
If no formal agreement has been made the vendor must prove that they had suffered due to the buyer’s decision to withdraw from the sale. “How high any damages should be is negotiable. I have noticed that vendors that had numerous potential buyers didn’t ask for compensation at all. If there was only one buyer, there is a chance that the vendor will only be able to sell the property for a lower amount than the original asking price. This means that they suffer financial loss”, Notary Carol Bohyn concludes.