Guide to Buying Property in France
The French Property Market
The French real estate market
has been booming over the course of the past ten years. Indeed, since the birth
of the European Union, a greater number of foreign nationals have taken to purchasing
property within the country of France.
When it comes to the sale of
property in France, there are two primary areas in which the real property
market has been hot. On the one hand, in major cities in France -- particularly
in the French capital of
Paris -- newly constructed residential properties have experience a brisk
business and trade. A notable number of foreign nationals have taken to purchasing
new residential properties in major cities such as Paris in the past five or six
years.
In addition to the fast paced market in new residential properties in major
French locations, older, larger residences in more rural regions are also
in demand. Foreign nationals are making up a significant portion of the group of
purchasers who are seeking out and purchasing these types of older, larger properties
in rural areas in the country.
Investment Property in France
Like other nations comprising the European Union, France has experienced an up tick
in the number of foreign nationals who are investing in commercial
real estate in France since the creation of the EU. The pan-European marketplace
has created an environment in which investing across national boundaries and throughout
Europe has become a profitable enterprise for many men and women.
One example in which foreign investors have played a significant role in real property
is found in the number of foreign nationals who have invested in real estate associated
with the retail trade in major French cities. Indeed, within Paris alone, the number
of foreign investors in commercial real estate, most particularly in buildings and
property associated with retail operations, has increased by over 100% in recent
times.
Overall, the commercial real estate market in major French cites has proven to be
a very profitable investment for many foreign nationals. Most analysts agree that
the commercial real estate marketplace should remain a stable and solid investment
for investors, including foreign nationals, well into the next decade.
Even with some of the civil unrest that has been experienced in some
locations in France during the past year, the real estate market has not
experienced any real aftershocks as a result of this restiveness in some parts of
the nation.
Residential Real Estate in France - Single Family Properties
As mentioned previously, the residential real estate market has been hot in many
locales throughout France. In the major cities, newly built properties have been
the subject of brisk sales in recent years. Many foreign nationals have been found
snatching up these new residences in Paris and in other larger French cities.
In addition to newly built properties in larger French cities, rural residences
have also traded on the marketplace steadily over the course of the past decade.
Many foreign nationals have taken to purchasing larger residences in rural areas
in France for retreat and holiday or vacation properties.
For many years, France has been a destination of choice for holiday travelers from
much of Europe and from other ports of call around the globe.
Apartments in France
In the 21st century, the resort communities in France remain some of the most popular
destinations for travelers and tourists from around the world. When it comes to
French resorts, including the magnificent cities located on the French Riviera,
many travelers and visitors actually return to these cities time and again for holiday
stays.
As a result, the demand for residential properties to be used for vacation purposes
runs high in some of these communities. Apartments
in Paris communities have been in steady demand over the course of the past
twenty years.
For the most part, apartments for sale in French resort communities are priced high.
Buying an
apartment in France does not come cheap.
In addition to resort communities, Paris has also experienced a significant increase
in the number of new and more expensive apartment units that are being constructed
each and every year. Many foreign nationals have taken to purchasing apartments
in the French capital city -- particularly since the inception of the European Union
and the integrated European economic community.
Holiday Property in France
As referenced previously, vacation real estate has been in high demand in France
in recent years. The French resorts, most particularly those resorts in and around
the French Riviera, have experienced brisk business in vacation real estate. Generally
speaking, these properties come in the form of apartments that are being snatched
up by foreign nationals at record rates.
In Paris as well a significant number of residential properties are sold each year
to foreign nationals that intend to make use of these properties for vacation or
holiday purposes. As in the resort communities, apartments tend to be the residential
property of choice for people seeking vacation or holiday properties in the capital
city.
Finally, when it comes to vacation or holiday
property in France, rural residences are also greatly in demand. There are
some spectacular (and large and expensive) estates that are on the market at this
point in time, a good share of them having been purchased by foreign nationals for
vacation purposes. Rural French residences are expected to remain in high demand
by foreign nationals for use as vacation or holiday properties well into the next
decade, according to real estate analysts in France.
Specific steps to buying real estate property in France
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.ssence, 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.ghly 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
Further information on France
France Mortgages Options
When considering the options for a
France mortgage on your overseas property there are a couple of choices to consider:
- Do you consider raising finance on your existing property in the UK to cover the
whole cost of your purchase abroad? A good idea if the interest rate in the country
in question is a lot higher than it is here in the UK as you will pay a lot less
in monthly repayments.
- Do you secure a mortgage against the property from a local bank in the country of
purchase? This can be a wise option especially if the interest rate is lower than
our current UK interest rate. Most overseas mortgage / bank lenders will require
upto 30% deposit on mortgages. However, you will need to give some thought to how
you will service your mortgage payments each month especially if you are not living
or earning in that country as you may well lose out on exchanging money each time
to cover monthly expenses. Check out our
Foreign Currency page to see how you can save money in this example
- Some Builders and developers may well offer their own mortgage facilities on their
properties for sale. This can be beneficial to both parties depending on the logistics
of the mortgage or loan facility. Always check and compare with the two options
above before making your final descision.
For more details on Mortgages in
France visit our Mortgage page in France section.
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