Buying a property in France
Property purchase in France
The system.
The system of property purchase in France, as in most of Europe, is quite a bit different from that in the UK and Ireland – but in many ways it is a much less stressful experience. In France the estate agent plays a much more significant role in the sale and purchase process undertaking much of the background legal work for the Notaire (the government’s legal representative for property transactions) right through to the completion act, utilities transfer and even, in our case, to the organisation of a housewarming party with the neighbours! For this reason the profession is highly regulated by legislation and each agency requires a government licence to operate. This, in turn, involves the agency director having specific degree-level qualifications and, for the sales consultants, an approved (and examined with a 75% pass mark) training programme.
The estate agency and its consultants have a duty of care to both the sellers and the purchasers to try and ensure that there are no hidden problems with either the property or with financing the purchase before putting forward an offer.
Of course it is the Notaire who is ultimately responsible for ensuring the title deeds are in order and that there are no charges or debts outstanding on the property - but it’s the agency that does the legwork! All this is to say that you shouldn’t be surprised that your agent will need to ask you pertinent questions about your motivation and ability to finance the purchase, as well as to ensure that the property that you want to buy ticks all the important boxes within the limits of budget and other constraints.
The preliminaries.
Like most property purchases these days, your research into possible target areas and prices on offer will usually begin on the Internet. However Internet research, although very helpful, is no real substitute for a personal visit to the area. That beautiful stone cottage at a knockdown price in a Pyrenean village may seem very seductive on the Internet – but is it is only when you visit in person that you realise that you may need a 4x4 to guarantee accessibility during some of the winter months!
All this is by way of saying that when you plan your visit please allow enough time to get to know the area and redefine your search criteria before jumping in with property visits. Within reasonable limits you can always change the property to suit your requirements – but you can never change its location. Most serious agencies will wish to spend at least an hour with you discussing your purchase project before proposing several areas/villages that you should spend some time discovering – on your own – before even starting to look at individual properties.
A good agent will then be able to guide you to 2 or 3 properties which should meet 95% of your criteria - enabling you to make an informed choice from the most suitable currently on offer. Most people who come out with the objective of seeing as many properties as possible usually end up confused and disappointed and convinced that they have had a wasted trip. Don’t be one of those!
The offer.
Hopefully you will find a property which meets your criteria and you will wish to make an offer – and this is where the process may start to diverge from the processes you have previously known back home.
Rather than just putting in an offer based on a relatively arbitrary discount from the asking price, you should listen to the opinion of your agent about what price is likely to be acceptable. One of our jobs is to be in constant discussion with the owner to make sure the property is realistically priced in relation to actual achieved sale prices. This is to ensure we get the maximum number of non-locals actually making the effort to visit the area to see properties that are in line with their budgets. In other words if properties are realistically market priced then there is usually little, if any, margin for negotiation. Prices in our area of France tend to be very competitive on a national and international basis, and if the property really suits you there is no point in losing it for a few thousand euros just for the sake of ‘getting a deal’, particularly if it is already at an attractive asking price and within your budget.
That being said your agent will do his best to make sure that both parties – buyer and seller – reach an agreement which is satisfactory to both of them. Generally offers in France will not be accepted if they are conditional on the sale of an existing property, even one in France. A full cash purchase, with no conditions is actually the norm in this region so offers conditional on getting a French mortgage will not in general be accepted unless an offer in principle, and in writing, has already been obtain for the amount of the loan required. If the offer is in cash then we, the agency, will require proof that the necessary funds are available ( in a building society, bank or investment account etc) before asking the vendor to make an irrevocable commitment to accept it.
Once an agreement has been reached the agency will produce an “Offre d’Achat” document, which is essentially a heads of agreement offer from you, the purchaser, to us, the agency outlining the main terms and conditions of the offer that you are proposing to the seller. The vendor(s) then have 15 days to accept this offer in writing, otherwise it falls. However once this offer has been countersigned by the vendors the property is effectively off the market, and no gazumping can take place thereafter.
Although the vendor is engaged at this stage, you, the purchaser, still have 10 days after having signed the ‘Compromis de Vente’(see below) to pull out of the transaction without penalty*. However in France it is considered very bad form to put in an offer unless you are 99% committed to proceed.
The Compromis de Vente.
The Compromis de Vente defines the sales transaction in depth, including conditional clauses: to validate the title deeds; to verify the fitness for purpose from a planning point of view (e.g.. for habitation); to check that that the local council or other bodies do not wish to compulsory purchase the property; to ensure that there will be no remaining charges or claims over the property on the day of completion, etc..
This document also incorporates the findings from the compulsory diagnostics (currently, where applicable: termites, gas, electricity, insulation and energy performance, lead, asbestos and natural risks). If termites have been discovered they have to be eradicated at the seller’s expense whether or not the sale proceeds, but all other diagnostics are for information only. They are presented so that you can decide whether you wish to proceed with the sale (or use your 10 days reflection period to pull out) but not to invite you to renegotiate the price.
The signing of the Compromis de Vente usually takes place 7 to 14 days after the offer has been accepted, to allow time for the necessary personal and legal documentation to be assembled. It helps speed up a whole process if you come on your visit prepared with the necessary documents in the event that you see a property that you wish to secure before leaving. Please click on this link to download a PDF list of the copies of documents you should try to bring with you on your visit.
For practical reasons it is often not possible for many purchasers to be present at the Notaire’s office to sign the Compromis de Vente, and/or the completion act. Under these circumstances the Notaire will draw up, free of charge, a “procuration” (power of attorney) document which one of his staff will execute on your behalf. If possible we advise you to sign such a document when you are still in France as that avoids both postal delays and the costs of having your signature(s) witnessed by a solicitor or notary public in your home country. We usually advise people to take out a power of attorney anyway - in case events beyond their control arise which prevent them being present in the prescribed date and time of completion (e.g. air-traffic controllers strikes, illness, accident etc).
Once the Compromis de Vente has been executed the notaire will send each joint purchaser individually a registered letter informing them of their 10 days to pull out of the transaction without penalty*. Assuming you, the purchaser, wish to continue with the purchase you do not need to reply. However at the end of this period you should ensure that the deposit for the property (normally 10 % up to €100,000 and 5% thereafter) is transferred to the Notaire’s client account. Details will be provided with the documentation in the registered letter.
If you have any queries on the content of any documents that you have received then of course we, as agents, will do our best to answer your questions quickly and clearly.
The period from the end of the 10 days cooling off period to the completion act can be anything from 1 to 3 months depending on such factors as public holidays, pre-emption rights of the community or of SAFER, the agricultural holding body, mortgage applications, any problems found with previous planning applications etc. If there are any surprises (e.g. newly discovered rights-of-way etc that were not were not in the previous deeds etc) then the purchaser has the option to withdraw or to seek compensation from the vendor.
*The Notaire will require a 300€ non-refundable deposit against his costs of drawing up the Compromis de Vente at the time of accepting the offer d’achat (as a contribution to his costs in the event that you to decide to use your right to pull out of the transaction in the 10 days after the compromise hs been executed). Assuming you do not, the €300 will count as prepayment against the Notaire’s legal fees and the government’s property transfer taxes (collectively called the ‘Frais du Notaire’).
The Completion act.
Roughly 3 weeks before completion is scheduled the notaire will send you an account detailing the exact amount to be paid before completion can take place. He will usually also have given the date and time and place of completion, irrespective of whether you have already signed a power of attorney. You will need to confirm whether you intend to be present or not, as you may still opt to be present even if you have previously signed a power of attorney. If you have decided to take a French mortgage to help finance the property and do not intend to be present at the act you will also need to sign a 2nd power of attorney to allow the Notaire’s office to execute the mortgage deed on your behalf.
The day (or morning) before the completion act we will visit the property (with you if you are available) to confirm that the property is in the same condition that it was when you made the offer, that it is vacant (or remains appropriately furnished if you decided to purchase it that way) and to read the various utility meters. We will also make sure that we have all the keys in our possession to hand over to you on completion.
It is a legal requirement in France that the property is fully insured on completion: we can organise that on your behalf if you wish. Expect to pay around €30-€60 a month (depending on size, location etc) for structure, contents to €15,000, third-party liability and legal cover. We can also often open electricity and water accounts for you if you are not a French language speaker - but for us to do this you will need to have already opened and funded a French bank account and provided us with the details. If possible try to do this immediately after you have had the offer accepted and before you leave the area. Alternatively there are several online banking facilities that you can subscribe to via the Internet (e.g. CA Britline) but, in practice, it is much more useful to have an account with a bank situated close to where you have decided to purchase your property.
Following the completion act the property is yours. Congratulations!
After sales service.
If you intend to take a permanent residence in this area then we propose a further service – that of a housewarming party with your neighbours within the 3 months after completion. The French are very friendly and welcoming people and, even if you do not speak their language, this gives you an excellent opportunity to get to know them, and vice versa.
The housewarming usually takes place towards the end of the week, Thursday or Friday, starting around 17:00 hours and lasting for 2 hours. We organise the invitations, the snacks and liquid refreshments, signage, buntings thank you letters etc! And, of course, we enjoy it too ….
Welcome to France.