If you are just setting out on your journey to buy a property in France – maybe a holiday home or perhaps you plan on emigrating – here are 12 of the most important things you should be aware of:
1. Agents and Property Details
The property/real estate market in France is regulated, and so French estate agents must hold a carte professionelle – a licence to sell property. French agents tend to provide less information on a property than you might be used to in your own country. Don’t get frustrated with them, just ask for the additional information which is important to you. The agent should be able to provide you with a plan cadastral (showing the parcels of land being sold, and how the buildings sit in the land) but you will find floorplans less common. They are unlikely to let you know exactly where the property is but some agents will provide this if you sign a bon de visite.
French agents will usually also accompany you on all viewings.
2. Initial Sales Contracts
One of the best things about the property buying process in France is that both the buyer and the vendor are committed much earlier in the process. You just have to make 100% sure you want to be tied in and know what you are committing to! No-one should rush into or be pressured into signing a compromis de vente as they are legally-binding documents.
Once an offer has been accepted and terms agreed both the buyer and seller sign a sales contract, which is a legally-binding contract which sets out the names and addresses of the buyer(s) and seller(s), the details of the property for sale including the address and cadastral references, agreed price and any conditions etc.
Conditional clauses (clauses suspensives) can also be included at this stage. This may be conditions you want to rely on – i.e. “I am buying this property on the basis that I can get a mortgage” or “I am buying this property on the condition I can get outline planning permission to convert the attached barn…” The vendor has to agree to these conditions being added so you can’t just add anything.
3. Cooling-off Period
Good news – there is a large degree of consumer protection for buyers of property in France. After signing the sales documentation, there is a 10-day cooling off period for the buyer. This means the buyer can change their mind and pull out of the purchase without penalty.
Note – there is no equivalent cooling-off period for the vendor!
The buyer only pays their deposit when the cooling-off period expires, ie. on the 11th day.
It is customary for the buyer to pay a deposit (held by the Notaire). This is never paid directly to the Vendor. For non-residents this is usually 10% of the net sale price, but it can be negotiable.
It is worth getting in touch with a specialist currency broker – like our longstanding partners Moneycorp – for a quotation and to understand the options available to minimise the impact of currency fluctuations. Read more about how to get the most Euros for your money here.
5. Property Conveyancing
In France the property transaction process is handled by a Notaire. Once the compromis de vente has been signed by all parties and the cooling period has expired, the 10% deposit is paid to the Notaire, who then starts work. Most Notaires will not begin working on a dossier until they have receive the deposit.
Once all the searches, checks and title deed registration have taken place, completion will take place with an acte de vente (deed of sale) in the Notaire’s office. This is quite a formal affair where the buyers and sellers get together in a room with the Notaire who reads through the document making sure his or her clerks have done their due diligence and there are no errors, before it is signed by all parties. If the buyer cannot attend in person – often the case if the live overseas – a power of attorney can be granted to someone else to sign on their behalf. That said, ideally you (or someone acting on your behalf) should view the property on the day of completion as you are buying the property ‘sold as seen’.
The balance of payment (90%) is made to the Notaire at completion (part of which may include funds from a mortgage), as well as the estate agency fees (if applicable) and the legal/transaction fees (usually erroneously called the “Notaire’s Fees”). After the signing of the acte de vente the buyer will receive an attestation from the Notaire certifying they are the new owner of the property. Title deeds and final papers are usually sent 6-9 months later.
We’ve mentioned this above but there are several sets of fees the buyer will be responsible for, and in France these fees are comparatively high compared to other countries.
Estate agencies set their own fees, typically between 4% and 10% depending on the same price of the property, and are legally required to display these in their shop window and website etc – remember, it is a regulated profession.
Most property transaction fees – Notaire’s fees – are between 6% and 8% depending on the property’s value and whether there is a mortgage involved. There is no getting out of using a Notaire – it is a legal requirement when either a property or land is sold.
***Please Note: It is no more expensive to buy through FrenchEntrée than if you went directly to an agency, we don’t charge fees. We are remunerated by our partners, so you pay the same but you get the benefit of our back-up and support throughout the process – for free! ***
Notaires are similar to a solicitor – or perhaps, more appropriately, a conveyancer – but they are employed by the French government to ensure that due diligence is carried out, that the sale is above board and that all taxes are paid. They are not there to give the buyer or vendor specific guidance, although most Notaire’s clerks are happy to point in the right direction.
As a buyer your default will be to use the Notaire who was last involved with that property, so they would also be the ‘Vendor’s Notaire’. There’s no fundamental problem with this, as Notaires are required to be neutral/impartial, but you may feel more comfortable appointing your own Notaire. In this case the Notaires would share the fees, it wouldn’t cost twice as much! A solicitor will always advise you to use your own Notaire, but having been involved with scores of property transactions I personally have never found it to be a problem using the same Notaire.
If you are buying a property which is not straightforward, or your personal situation requires some additional thought before you sign on the dotted line, it is worth seeking independent legal advice from a specialist French property lawyer.
8. Mortgages and Finance
If you think you may need or want finance to buy your property in France, don’t leave until the last minute. Certainly don’t leave it until you have signed a compromis de vente! Begin having conversations early to explore if you are eligible, and to what extent. You might be making a huge assumption that a French bank will lend to you, when they have very specific rules on lending criteria which you may not meet. We can help you with this process – if you’d like to explore the feasibility of getting a mortgage, email us: [email protected]
If you need a mortgage – or are just considering getting one because interest rates are so low – this will need to be a condition, or clause suspensive, in the compromis de vente. You can’t turn around 4 weeks into the conveyancing process and decide you want a mortgage; it has to be enshrined in the initial sales documentation. If you then fail to get a mortgage (and can evidence this) then as long as there is a relevant condition in the compromis you can lean on, you can reclaim your deposit and walk away from the purchase penalty-free.
If you’d like to find out more about mortgages in France click here.
You should absolutely shop around for currency deals and the best rate possible, just as you would for a mortgage or any other financial instrument. Just because you aren’t familiar with currency or the right rate, don’t accept the first rate put to you. Most currency specialists will be able to beat the rates and fees from a high street bank. A specialist currency broker will be able to talk you through the different options available to avoid fluctuations in the market and get the most Euros for your money.
You can save hundreds, potentially thousands of Euros when transferring funds to France. Moneycorp, are our longstanding foreign exchange partner, who can obtain bank-beating rates for you and you’ll also benefit from free transfers for life as a FrenchEntrée client. I’ll introduce you to our friendly Account Management team for an initial chat about options, and/or you can open your free trading account here to take advantage of this offer.
The buyer will need to get buildings insurance ready for when they complete. Typically the Notaire will want to see evidence that the building has been insured, especially if there is a mortgage, before he or she allows completion to take place. You can take over the previous owner’s insurance – very common – but it might be better to obtain your own policy based on your requirements. A good example where the existing vendor’s policy would be inappropriate might be if the property will be used as a holiday and will be unoccupied for long periods.
11. Surveys and Reports
In addition to the statutory diagnostic tests which must be provided by the Vendors (lead, asbestos, flooding, electrics, natural risks, energy efficiency etc) you may decide you want a UK-style house survey. They are not commonplace in France, and some vendors may be deeply suspicious if they have never heard of one before, but there are British or English-Speaking Surveyors working in France. You can either get this done before you sign the compromis de vente, or ask for it to be added as a clause suspensive to the sales documentation (if the vendor agrees).
12. Inheritance and Succession
A really important area which many buyers overlook, but where independent legal advice ought to be sought prior to buying in France. The French system means you cannot leave your property to whoever you wish, and you cannot disinherit your children. If your personal situation includes a divorce or children from a previous marriage, it is worth getting advice to make sure you set yourselves up to buy in the right way. There are a number of different ways of managing this, and we’d recommend speaking to a specialist lawyer.
Whatever stage you are at in the property buying process, if you’d like help with your property search or introductions to any of our partners, please don’t hesitate to get in touch: [email protected]