Once you have chosen your French property:
Probably after many hours of deliberation and over many
fine French courses you will want to know exactly what the
French buying process is so that there are no nasty
surprises round the corner and so you can plan for the
future. Here we try to explain the different steps to be
taken, what role everyone plays and what is expected from
each person. This article covers negotiation, the survey,
the signing of the "Compromis de vente" (preliminary
contract), the period between this and the signing of the
"Acte de vente" (final deed), and also the role of the
notary and his fees. It is important to take tax and legal
advice before this preliminary contract is signed on how
best to arrange your finances and ownership of the property
to minimise tax expenditure and in the future inheritance
tax issues.
Negotiation:
We are here to guide and assist you through the entire
buying process and this includes helping you get the best
deal possible on the price of your property. The agent in
France may well hint at the lowest price acceptable to the
vendor, as they do in England. It is wise to follow what
they say as they will know roughly what price will clinch
the deal and what would simply annoy the French vendor.
You ought to speak to us before you make an offer to clear
up any issues that you may not have fully understood and to
help with the negotiation but there is nothing wrong with
letting the agent know how interested you are and if you
are about to make a serious offer. It is a fast paced
market out there and you don't want to lose a fantastic
property because you spent too long dithering or trying to
obtain a better deal by playing it cool and not making your
interests clear.
The Survey:
Unlike in England the French do not tend to have surveys
done to their houses and a French chartered surveyor does
not exist. The options available to you are: a British
chartered surveyor based in France or a local established
builder. It is wise to have someone check the property over
and check for any expensive repairs which you can sometimes
use to negotiate the price and forecast upcoming
expenditure. Leapfrog Properties or the agent in France can
help organise this survey for you.
The Compromis de vente:
This is the preliminary contract between the buyer and
vendor which sets out the exact conditions under which the
"Acte de vente" will be completed and how the transfer of
the property will take place. It is a binding contract that
is signed before any conveyancing takes place by the
notary. There is, however, a seven day cooling off period
during which the purchaser may pull out without forfeiting
any of his deposit (usually 10% of the purchase price).
This period begins from the time the buyer receives a
signed copy of the compromise and if he decides to pull out
of the transaction then he must inform the notaire by
written confirmation BEFORE the seven days are over. The
buyer does not have to give any particular reason for this
and should expect his deposit returned to him within 21
days of the notaire receiving the letter. It must be noted
though that if the purchaser pulls out of the deal after
this period then he is liable to losing the deposit unless
any of the "conditions suspensive" (conditional clauses)
are not met. This contract can be signed either at the
estate agency itself or at the notaire's office and can be
one which has been drawn up by the estate agency or by the
notaire although it is always safer to sign one prepared by
a notary as it is more likely to protect you and include
more details on the transaction. At this point the notary
will spend some time with you on the details of the
transaction and outline any "conditions suspensives" such
as the contract being subject to mortgage approval for
example.
What happens after the compromis is signed?
The Notaire now carries out his searches and conveyancing
checking records and documentation concerning the property.
Certain certificates are required by him from the buyer
showing that surveys have been carried out to verify any
existence of Lead, Asbestos or termites. Remember he is
impartial and works for the state, not for the buyer or the
vendor so he will be thorough to the point at which he is
happy that the sale conforms to French law. This could take
up to three months and you should use the target completion
date to base your planning around but do not use it as a
definitive completion date as it is hard to predict exactly
how long it will take the Notaire to complete his work.
Therefore you should keep in constant communication with
the Notaire to find out how it is going and get an exact
completion date nearer the time.
What exactly are the duties of the Notaire?
He must ensure that all the conditional clauses have been
fulfilled and that the vendor has given full and complete
information regarding the property to the buyer. The
following checks are also done by him: Checking that the
title of the property is correct, that any co-ownership
records are up to date and check the exact location within
the commune. Establish the identity of both parties
Mortgages have been approved and the purchase price will be
sufficient to cover the mortgage. Rights of way within the
property Verifying that the property conforms to the
building regulations of the commune The co-ownership
situation Rental situation Public works that may impact the
property Ensure there are no covenants other than those
within the contract that might adversely affect the
property Inform any people entitled to pre-emption rights
of the sale
Notary fees
These can range anywhere between 3% and 13% of the purchase
price of the property- New builds tend to be about 3% while
the average is between 7% and 8%. As these are fixed by law
(much like stamp duty) its does not matter which notary you
appoint as the price will be the same.
And Finally....
When you are finally given a date for the signing of the
Acte Authentique (Final Deed) you can organise your
removals company and your travel arrangements to the
Notaire's office for the final signing. (If you cannot make
it you can give someone power of attorney to sign on your
behalf). NB. It is important that you make sure all the
money required for the transaction including the Notaire's
fees are in the Notaire's bank account BEFORE your
completion date. The final deeds will be read out loud in
the office, deeds signed and the property will become
officially yours!
----------------------------------------------------
Nick Dowlatshahi is Managing Director of Leapfrog
Properties and is an Expert on the French Property Market.
Leapfrog Properties is a French Property agency that
specialises in Property for sale in France.
http://www.leapfrog-properties.com
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