When looking for French property, make sure you’ve done your homework and be prepared to act quickly, or you might miss out, advises Mar Bonnin-Palmer
While you might have hoped to leave the phrase ‘fail to prepare, and prepare to fail’ behind in your schooldays, when it comes to purchasing French property, it remains a pertinent truism.
With more than 150,000 UK citizens living in France, and thousands more joining them from all over the world, competition for the best properties is fierce. Many who choose a new life in France are inspired by a little je ne sais quoi, but when it comes to understanding how the process of buying a property in France differs to that in England, tangible knowledge is necessary. Thankfully, moneycorp, in partnership with FrenchEntrée, has compiled this handy overview, which will help you ensure that securing the perfect French property is firmly in your hands, and out of the realm of luck.
FIRST THINGS FIRST: CONTRACT OF SALE
In France there is no such thing as a sale ‘subject to contract’ as in England. Once you’ve found your dream property, and after your offer has been accepted, you will be asked to sign a Compromis de Vente or a Promesse de Vente (Contract of Sale and Promise of Purchase respectively). These are binding documents confirming your intention to buy the property from the seller.
In most cases, following the signing of one of these documents, there is a 10-day cooling-off period, during which you’ll carry out searches on the property. Once these 10 days are over, you are required to pay a 10 per cent deposit of the net purchase price and if you have not made preparations beforehand, you are at the mercy of the prevailing exchange rate.
THE MOMENT OF TRUTH: COMPLETION
The final act is the signature of the Deed of Sale or Acte de Vente. This document is prepared and signed by a notaire (solicitor). Although the time between signing the sales contract and the final Deed of Sale varies, in general it takes around two to four months. Before you can complete on a French property, the notaire will need to have all purchase funds in place. Some buyers would have already planned for this when they signed the sales contract.
Planning the transfer of the funds in advance will help you to manage your budget and avoid last-minute surprises. Exchange rates fluctuate constantly and if the Pound falls between the time you sign the sales contract and completion, you might find yourself paying a higher price than initially expected or, worse, you could end up not being able to afford the house at all. It is therefore worth making enquiries and preparing for these payments well in advance by speaking to a foreign exchange specialist at the beginning of the process.
Aside from the completion funds, you will also have to plan for other costs to be added to your final bill such as the notaire’s fees, which tend to be approximately 6-8 per cent of the net purchase price, although this is inclusive of items such as Droits d’Enregistrement (Stamp Duty). You will also have to pay the French agent’s fees, which can vary from 4-12 per cent, although 7-8 per cent is more common.
Opening an account with moneycorp is free and carries no obligation, but will allow you to access our free dealer analysis and market updates, which may be useful when planning a transfer.
Call Moneycorp on +44 (0)20 3773 6355 for more information or to discuss your currency transfer requirements. Receive free transfers on all your payments.