Specific Guide to Buying Property in France
The first step in the buying process in France is an oral agreement to make a purchase. The oral stage of the real estate buying process is
informal and actually not legally binding.
However, once a buyer conveys a purchasing price to a seller, and if the seller agrees on that price, movement towards a binding agreement which is known
in France as the compromis de vente. The compromis de vente is a conditional or preliminary agreement to purchase a property - and now you are well on your way to buying a property in France.
Generally speaking, the compromis de vente will set forth those steps and acts that must be taken and that must occur before a final contract will be entered into between
the parties and before ownership of the property will transfer from the seller to the buyer.
For example, after the signing of the compromis de vente, the buyer will have to obtain suitable and appropriate financing while the seller will have to work to
make certain that the title to the property is free and clear of debt and that the property can be transferred to the buyer without any encumbrances.
At the time the parties enter into the compromis de vente, the buyer will have to make what normally amounts to a deposit in the amount of 10% of the total purchase
price. Please note - there are limited instances when the deposit is refundable. For example, if free and clear title to the property cannot be arranged during the time period
set forth within the compromis de vente, the buyer can back out of the deal and get the deposit money back.
However, barring something of this nature, if the buyer does back out of the agreement, he or she will generally lose the deposit money that has been paid pursuant to the
terms and conditions of the compromis de vente.It is highly recommended that the deposit be paid to either a qualified
solicitor in France or a designated notaire.
A solicitor or notaire will hold the money until all of the requirements and obligations of the compromis de vente are completed and concluded. At that time,
the money will be paid to the seller if the deal goes through or will be refunded to the buyer under limited circumstances as outlined previously.
Generally, there are legal fees of around 10% that are associated with most property sales in France. These fees are due to be paid upon the completion of the
sale - at the same time that the balance due on the overall property sale is paid by the buyer.
The real estate agency if there is one involved will also be entitled to a commission. Negotiations between the parties will determine whether it is the buyer or the seller who will pay these
fees. The real estate agency fees can be as low as 5% of the purchase price or as high as 10% of the purchase price in some instances.
There are restrictions on how much of the purchase of property a foreign national can finance in France. If a foreign national is a citizen of another European Union
nation, that person can finance up to 85% of the total purchase price of the real estate.
If a foreign national is from a country beyond the European Union, he or she can only finance up to 80% of the total purchase price of the property. On the other
hand, a French citizen can finance 100% of the purchase price of the real estate in question.
The final agreement in the real estate sales transaction is what is known as the acte de vente (which roughly translates as the final deed for sale). This agreement
is to be signed in front of an official notaire.
Property Abroad always recommends using a
Solicitor or Lawyer when considering any property purchase in France
View our buyers guide here >