Buying French Property
The buying process
How the process of buying a French home works in France
Hopefully here we can give you some idea of what you can expect to happen next when buying a home in France. We do our best to keep this updated but recommend clients contact our sister company - IFS France for more specific information.
The very first document you will be asked to sign, if your buying through an agent is a sheet of paper which will be the "Bon de Visite" signing this document does not commit you to anything but does ensure if you buy the house that the french mortgage broker will receive his fees.
So you have found the french property of your dreams what happens next?
You ought to know at this stage that in France it is often the buyer who pays the estate agents fees. This is usually the case except for the Paris region or more specifically "Ile de France"as the conglomerate region surrounding Paris is known. In the area which surrounds Paris the seller pays the estate agent. It may be useful to know that the agents' fees are not fixed so regional variations can occur. Agents' fees could be anything from 4% to 15% although 7% is more common. The term used in France is "Honoraires Libres" - this term means the agent can charge what they like. There are market forces at play here as in any other domain. French law does state however that the agent must display their fees publicly in their office. French law also states that these fees can be renegotiated down but cannot be increased. So don't be frightened to ask and don't be put off if all you receive in return is a " Non ". It can also be common to see the same property advertised with different agents for different prices. Usually as a result of the agents' fees being different.
The first step of the purchase process is called the "Compromis de Vente" which is a pre-sale contract which basically commits both the seller and buyer to the sale. The compromise is usually completed by the agent if he holds the appropriate authorisation or the Notaire. There is a period of reflection of seven days when you can change your mind. The vendor however is not accorded this facility and is legally committed to selling the property to you at the price agreed. Outside of this period you are committed to going through with the purchase and the vendor is committed to selling the property to you. You can however insert certain clauses which would effectively cancel the transaction. These clauses are referred to as "Conditions suspensives de la vente". You are normally asked to pay a deposit of 10% at the time you sign the "Compromis de Vente". A little tip here, if you have had the foresight to open a French bank account most agents will accept a cheque which will not be cashed until you have agreed or provided money from an alternative account. IFS France our sister company will be happy to arrange a French bank account for you. All details of the sale should be included in the "Compromis" sale price, agents fees, name of the vendor and your own details. There is no legal obligation to sign the "Compromis" in France. You do need to bear in mind however that the property can still be sold to another buyer until it has been signed by both the vendor and purchaser.
IMPORTANT
If you are buying a property in France with the aid of a french property loan you should ensure that there is a clause in the pre-sale agreement that states if for any reason you do not obtain your loan that the purchase will be cancelled and any deposit you have paid will be returned to you. We at French Mortgage Advice are happy to verify that this clause has been inserted on behalf of our clients. On occasion we have seen the clause omitted even though it has been asked to be inserted.
With the pre-sale agreement signed and both parties legally committed to the transaction the Notaire will start to prepare the final contract. If purchasing with the aid of a property loan we would now submit the application to the lender. Who will then make a firm loan offer available to you. We can arrange for a survey to be carried out on the property for you and would strongly advise this. There is no obligation under French law for a survey to be carried out. Property in France is "Sold as seen" in fact the Notaire will point this fact out to you at the time of signing the final contract. Certain banks but not all may send a valuer to visit the property to ensure they are happy with security being offered.
In December 1996 a new law came on the statute books in France. Known as the law Carrez or "loi carrez" this law states that any property involved in shared ownership "co-propriete" of the either the ground on which it is built or communal parts, as in the case of an apartment block, must be the subject of a survey for "plomb, parasites et amiante" (Lead, Termites and Asbestos) also the exact usable square footage has to be confirmed and if it is not as described in any advert this can lead to compensation being paid. Please be aware however that when buying property which is built on its own land and no shared ownership issues arise, there is no verification of these or any other issues unless you request your own survey. We would also advise that a clause is inserted into the pre-sale contract stating that the sale is conditional on results of this survey.
The "Acte de Vente" or the final contract:
This will be drawn up by the Notaire. It is probably worth mentioning here the role of the Notaire. The role of the French Notaire is to ensure that the transfer of ownership of the property is carried out in accordance with French law. The Notaires' role is not to advise the buyer or seller and quite often the same Notaire will act for both parties (see more information here) The final act should be ready approximately 3 months after the pre-sale agreement has been signed. The Notaire will confirm the seller owns the property being sold, there are no outstanding loans on the property, the identity of all parties must be established, and the Notaire should carry out a local search to verify there is no adverse planning application that would affect the property.
You do not have to attend the final signing in France person. You can appoint a person with "Power of Attorney" to attend and sign for you. Although the occasion is worth making the effort to be there in person for. You must ensure that the Notaire has all funds readily available within their client account to complete the transaction on the designated date. If not this can result in you not only losing the property but also losing your 10% deposit!
After the signing of the contract you are handed the keys to your new property.
Welcome to France
Please bear in mind our sister company IFS France is available to assist you with any queries you may have regarding French legal matters and we would advise all prospective purchasers to discuss how French inheritance tax laws may affect you prior to purchasing in France.
Buying a french home
Borrowing limits and rules in France - How much?
Pre-agreed loans
Terms of business
Useful information
About French Mortgage Advice
Quick Contact
Home • About us • Buying French Property • Types of French Mortgage • French Property Law • Additional Services
Sister company in France • Links • Mortgage Application Form • Contact Us
French Mortgage Advice, 12-7 Rue du Parc, 78130, Chapet, France |
Tel 00 33 1 34 74 91 64
email us at info@french-mortgage-advice.com |
French Mortgage Advice ©Copyright 2009