Monday, January 18, 2010
A guide to buying property in France
Whether you are taking your first tentative steps to buying a house here or are a seasoned ex-pat it pays to take professional advice throughout. Here's my step by step guide to finding and buying your dream home in France.
Around 50% of house sales in France are still done so privately, without the help and advice of an estate agent.
For most people though you would be well advised to either appoint a buying agent to act upon your behalf or to only view properties through licenced immobiliers.
A buying agent will scour the local market, visit properties on your behalf, compile a shortlist, accompany you on all viewings and help negotiate the lowest price possible. For this service they will typically charge you between 2-3% of the purchase price. You can find a list of accredited agencies by visiting the website of their national federation at www.fnci.fr
Traditional agencies must also have a carte professionnelle as well as a financial guarantee and full professional indemnity insurance. Most agencies are members of their national federation, you can find a list at www.fnaim.fr.
Many people begin their house search using the internet. Just as in the UK there are a selection of “portals” listing house details across France.
Making an offer
The process here is not too dissimilar to the UK.
Once you have found a house that you like you should make an offer (preferably in writing) to either the agent or vendor.
Make sure that all parties know exactly what is included in the offer (ie if it includes agents fees) and don’t forget to set aside a budget for the notaires fees and taxes.
There is no hard & fast rule as to how low your offer should be. In a “hot” market you may well need to pay the asking price, in troubled times you may well be able to negotiate a hefty discount.
You should have all your financing in place before you make the offer.
As you probably know most French purchasers do not bother to have a house surveyed.
There are a list of tests that the vendor must pay for and have undertaken by professionals. This is called the Dossier de Diagnostic Technique (DDT).
Up to seven surveys must now be undertaken. These are for asbestos, electrics, energy efficiency, gas, lead, “natural or technological risks” and termites.
Most sellers wait until they have an offer agreed before commissioning the reports, some of which have a short “shelf life” before they need to be undertaken again.
If you would like a more comprehensive survey you will find plenty of RICS registered surveyors offering a service throughout France.
Contrary to popular opinion, the Notaire is not there to represent you. They represent the state and undertake planning and other searches with the local authorities.
If you want to have someone representing your legal interests there are many UK legal practices who employ French notaries and offer this service (for a fee).
Preliminary sale agreement (Compromis de Vente)
Once your offer is accepted and the compulsory tests have been undertaken you will be asked to sign the compromise de vente.
This will either have been drafted by the agent or notaire. It is a binding agreement between the vendor and the buyer, subject to any conditions that may be stipulated in the contract. The most common such condition is that relating to a mortgage being secured but others could include planning consent, rights of way etc.
Once signed you do have a seven day cooling off period – during which you may pull out of the transaction at any time, without explanation, but you must do this by registered letter.
You will usually pay a deposit (between 5-10%) to the agent or notaire and this will be kept in a special bank account as a guarantee until the purchase is completed.
Completion (Acte de Vente)
It usually takes between eight – twelve weeks from signing the compromis for the final acte de vente to be completed and ready for signature.
The signing is at the notaires office and they will confirm the final time and date a short time beforehand. Beware, the date set in the compromis is a target date and not set in stone.
You must have transferred the balance of funds in advance (make sure you shop around using specialist currency brokers). You must also provide proof that the house is insured.
Once the signing is complete you are given the keys and the house is yours.
Buying new build property
This option is particularly popular with French buyers and is strictly regulated with developers forced to have a bank guarantee in place for each new development.
This guarantee is provided in the Deed of Sale to ensure that the new development will be completed to the advertised standards even if the developer or construction company runs into financial difficulties.
Contracts are drawn up in accordance with the French “Code de la Construction et de l’Habitation”. This sets out very clear terms and conditions and is extremely protective of the purchaser.
Notaires fees are lower and typically 2.5-4% of the house cost.
Houses come with a 10 year guarantee and need to comply with modern building standards.
The first step is to identify the developer/builder you wish to use. Visit the sites and make sure your chosen plot is available.
Once you have made your decision you will be asked to make a deposit of between 2-5%. Again this will be held in a special bank account by either the notaire or the developer (if he is licenced to do so) and, again, you have a 7 day cooling off period.
The payment of the deposit is accompanied by the signing of the “Contrat de reservation” which reserves the property and fixes the price.
This contract specifies the building schedule, stage payments and date of delivery (ie completion).
About 4-6 months after signing the reservation contract the notaire will send you the deed of sale (or projet d’acte) by recorded delivery. You should sign this within one month, usually at the notaires office.
When the property is ready to be handed over you will be accompanied by a representative of the developer and will agree all snagging issues. You then have a further 30 days to add to this list which you must do by recorded delivery.
I believe that everything here is correct at the time of writing but obviously things change and you should take up to the minute professional advice at the time of purchase.