The first step that occurs in the real estate 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 offering
price, movement towards a binding agreement which is known
in France as the compromis de vente.
At its essence, the compromis de vente is a conditional or
preliminary agreement to purchase real estate,
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 real estate 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 and that the real estate 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. 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 generally will 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
or a designated notaire. A solicitor or notaire will hold
the money until all of the requirements and obligations of
the compromis de vente appropriately 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 under 10% that are associated
with most real estate 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 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 real
estate 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
FRANCE
