In the early stages of your property search, most buyers will be scheduling viewing trips to assess their buying areas and potential future homes. At this point, it is important to be prepared to ensure it doesn’t become an unduly stressful process for you when you arrive.
Things to consider when preparing your trip
Deciding the property you want to buy
Where are you buying? With 27 Estates and an offer of coast, country side and mountains it is not an easy choice to make!
What type of property are you buying? The requirements for the property will be different if you are buying a holiday home or a permanent residence. For instance if you are buying a second property you might want to be close to an airport.
Deciding how you are going to pay for the property
It is a good idea to arrange your finances in advance. If you make an offer and it is accepted, the process of completion is fairly swift and therefore you should be prepared before well in advance of landing in France. You will need to determine whether you are going to be paying in cash or via a mortgage to finance the purchase. If you are expecting to use a mortgage you need to consider applying for a Euro mortgage. If you are in the position to you can also consider releasing equity from your property in the UK to fund the mortgage for you French property.
If you are obtaining a mortgage, the notaire will automatically include this fact as a suspensive conditional clause in the contract. This removes the obligation to continue with the purchase in the event that your mortgage provider rejects your application. You may also be applying for planning permission on a property or request repairs prior to a purchase, which if are declined or not carried out, you will not be obliged to continue.
You should discuss these clauses very carefully with your agent and with the notaire at the time of making the offer. Many problematic purchases or disputes could have been avoided if the purchasers had introduced clauses to protect themselves at this stage. You may also wish to seek independent advice from a legal advisor who specialises in international property purchases.
Deciding your budget
How much can I afford? What are my options? Determining your budget should be the first thing ticked off your check list. Understanding your budget will help you to define the areas you can afford to buy in, the types of property that fit within your budget and your payment options available for your budget.
Finally, remember that if you are buying in France you will need to pay for the property in Euros. If you don’t hold Euros you will need to exchange your funds to make the different payments involved in the transaction. It sounds obvious however this element is often forgotten.
The real cost of the property will be determined by the exchange rate applied at the time of making the payments. Therefore it is crucial to understand how to protect your budget from any negative fluctuations that might take place between the offer and the completion of the property.
How to account for risk posed by foreign exchange?
It is worth getting ahead of the game by opening an account with a foreign exchange specialist prior to your travel. It doesn’t involve any cost or obligation and it will give you access to the tools and information to help you planning the best way to proceed with your payments as soon as you find a property.
For those more risk averse, one option could be fixing the rate before the payments are due to take advantage of a rate movement. This would mean once you have committed to the full property price by signing the compromise de vente and agreeing the rate of exchange in advance of the completion date. This will prevent any last minute fluctuations increasing the price of your property in sterling since the date of completion.
For those with a little higher risk appetite, you can track or even target a specific rate. This is by utilising a market order which will automatically buy your euros when your desired rate is hit. You can also set a stop loss order which will trigger the same automatic purchase of funds, preventing you from negative sway in the market. This is why it is important to know your budget beforehand as you can set the stop loss order to activate when the exchange rate moves outside of your maximum value purchase price.
The earlier you begin to plan, the easier and potentially cheaper the process will be to purchasing your home abroad. French Entrée members receive free currency transfers from moneycorp for life, so we can help you every step of the way online or over the phone. From the initial viewings through to purchase and maintaining the property with our Regular Payment Plan, moneycorp can help you make your dream of a home in France a reality.
With a Platinum Trusted Service Award 2020 from independent review site Feefo and 40 years of experience in the industry, FrenchEntree has been recommending moneycorp for more than 15 years. During this time they have helped thousands of client planning the best way to pay for their property as well as supporting them afterwards with any further payment from paying bills, mortgages to repatriating UK pension payments for those who have retired to France.
Furthermore, we have worked with the same person at moneycorp for more than a decade! You might be familiar with her as she often writes for our FrenchEntree magazine. She has 13 years’ experience in foreign exchange, and is a qualified European lawyer with experience in European transactions. Mar will be happy to answer any questions or enquiries to support you through these difficult times.
Opening an account is really easy and free of cost. You can register online or over the phone in a couple of minutes and for FrenchEntree there are no transfer fees in any payment.
Lead photo credit : Money built from US dollars (C) Kostiantyn Li
Leave a reply
Your email address will not be published. Required fields are marked *