The Step-by-Step Process
of Purchasing Real Estate in France
This article will discuss the main steps involved in buying real estate in France, which, for the most part, is very straightforward and logical. This article is intended as a general overview of the process, and does not cover all the points that may be relevant to you.
Due to the way that real estate transactions are processed in France, you should expect at least three full months from signing the offer until to the closing when you will receive the keys. In rare cases it may be possible to finish the proceedings in one month, but three months is the most likely scenario.
The good news is that in most cases, your physical presence will be required only in the very beginning for visiting and choosing the property, and then signing the important first documents including the offer, the sale and purchase contract, and possibly a power of attorney (so that later on the closing can proceed without you) — all of which can be accomplished in as little as three weeks.
Prepare your budget. It must include not only the purchase price, but also the notaire's tax (droits d'enregistrement), which are usually 7-8 % of the purchase price. You will find a helpful calculator on the official notaire's website here (Haute-Savoie is department 74).
Before taking any steps of committing to the property, it is a good idea to review the technical survey reports that the seller is obligated to provide, notably the official survey measurements, and reports on presence of termites, asbestos and lead, among others. These diagnostics are the responsibility of the seller and are included in the sale price.
In France it is unusual for the buyer to undertake these tests, as it is the seller's responsibility. The experts hired by the seller are usually considered independent and competent. However, if you have doubts, or if you need more information than provided in the reports, you can hire experts at your own expense.
The purchase of real estate in France begins with the buyer's offer (offre d'achat).
Most often, the offer is a letter, signed by you, addressed to the real estate agency, indicating the subject property and the price that you propose. A pre-printed form is often provided by the agent. The price proposed can be lower than the asking price, and sometimes reflects negotiation that has already taken place. The offer should state any pertinent conditions, one of the most important being whether you are planning to seek a mortgage loan.
It should be noted that sellers view more favorably those buyers who intend to pay in full and without a mortgage. This is because mortgage buyers have certain protections under the law, notably that if their mortgage application is denied, they will have the right to cancel the sale without losing the deposit. As a result, sellers risk losing time and money, and potentially other buyers, if they commit to a mortgage-buyer. Consequently, if you come to the negotiating table ready to pay in full, you will be in a much stronger position.
The real estate agent will let you know whether the seller accepted your offer. Sometimes the seller will reject your offer and make a counter-offer with a different price.
If both sides have agreed, the next step is to sign the sale and purchase contract.
The Sale and Purchase Contract ("Compromis de Vente" or "Promesse de Vente")
There are two types of sale and purchase agreements in France — a promise to sell ("promesse de vente"), or a contract for sale ("compromis de vente"). The main difference is that the "promise" binds only the seller, while the "compromis" binds both, and hence is the one most frequently used.
The sale and purchase contract is to be taken very seriously, as it obligates you to purchase the property, subject to any conditions that may be in the contract and the ten day "cooling off" period to which you are entitled, discussed further below.
You will be invited to the real estate agency to sign the agreement. The seller may also be invited to sign at the same time, and you should request to sign together, if possible. That way, you will be sure that the seller has signed also.
The contract is most often drafted by the real estate agent, or otherwise by the notaire, and includes the technical survey reports as attachments.
At the time of signing, you will have to make a deposit of approximately 10% of the purchase price. The deposit is placed into the real estate agent's or the notaire's bank account. It may be possible to negotiate the amount lower than the standard 10%.
After signing the contract, a copy will be either handed to you or sent by recorded delivery mail. Under the law you will have 10 days from receipt to decide whether to proceed with the purchase, during which you can cancel the sale without losing your deposit. It should be noted is that the 10 day period does not apply in some cases when purchasing a building plot or if the purchase is made by a French property company (SCI), but often real estate agents will allow you to insert this clause into the contract anyway.
After the sale and purchase contract has been signed, the notaire will need 30 to 90 days to check that the transaction conforms to all legal norms and requirements (such as establishing proper title to the property and rights over the property), after which an appointment will be made for signing the final deed of sale.
Deed of Sale (Acte de Vente)
An appointment will be scheduled with the notaire for signing the deed of sale (acte de vente) between the seller and buyer in front of the notaire. This deed effectuates the legal transfer of the property.
There is no requirement to be present during the final signing and you can sign via representative (who can be, for example, the real estate agent, or the clerk in the notaire's office) through a power of attorney ("signer par procuration"), which you must have previously signed in front of the notaire in France or your home country (but before signing a power of attorney in your home country, check ahead to what extent this procedure will be accepted in France). The best scenario is to sign the power of attorney in front of the notaire in France.
Before signing, you will have to transfer the remaining sum, including the notaire's fees, into the notaire's trust account via wire transfer. In case of a mortgage, the lender will transfer the funds.
Once both parties have signed the deed of sale, it is signed by the notaire, and the seller hands the keys to the buyer. The notaire should give you a certificate of purchase ("attestation"), which you will need to open a bank account, if you have not already done so, and connect public utilities to your residence, including electricity, gas, and telephone. You are now considered the official owner.
Then the notaire will send the documents for registration of the transfer, which can take two to three months. Afterwards, the notaire will mail you a copy of the deed of sale with a detailed receipt for all fees and costs, and a check for a refund if there was an overpayment. If you ever need to obtain a copy of the deed of sale, you will need to inquire with the French land registry.
This article is intended for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem.