What is an agreement in principle?

When is it necessary to obtain an agreement in principle?

When buying a property, it can be a good idea to establish an agreement in principle between the seller and the buyer. This reassures both parties that they are willing to sell or buy the property on the date and at the price agreed.

It is also often necessary to obtain an agreement in principle from your financial institution. This document certifies that your financing institution wishes to proceed with your purchase and will finance the property for the amount agreed. However, this is only a moral commitment.

An agreement in principle has no legal value and will not protect either party in the event of retraction or cancellation.