The following is a step-by-step guide to the property buying process in France:
Step one: Research and planning
The Internet will be the first place many turn to when it comes to looking into buying a property in France. The web is an ideal tool to start looking at the types of properties that are currently available, and at how much they tend to cost. From online research you can also start to get a feel for particular regions and start to draw up a list of where you think you would like to buy a property. Once you have an idea of how much the type of property you are interested in is likely to cost, you can then start to think about how to finance the purchase. At this point, you will also need to explore any hidden costs associated with purchasing a property in France and budget accordingly. You should typically allow between 7-10 percent of the purchase price to cover all taxes and fees (however, this can be as low as 2-3 percent if you are purchasing a new-build property).
Hidden costs of buying a home in France include notaires’ conveyancing (legal) fees; agent immobilier (estate agent) fees; Stamp duty; and land registry. Quite often, some of these fees will be combined with the overall notaire’s fee. It is at this point you should also start to plan your currency exchange. Exchange rates change constantly and only a small fluctuation can have a huge impact on the final fee you will pay for the property.
By talking to a currency exchange specialist such as Halo Financial early on in the process, you can discuss ways to ensure you are protected against any adverse changes and ensure that you stand the best chance of exchanging at the best time. This can further help you budget for your purchase. What’s more, you can also consider any recurring and regular payments (for example, a mortgage) and discuss how you could potentially save money on these with a currency specialist.
Step two: Language
Unless you are fluent in the French language (both written and spoken) then you should ideally look to engage the services of agents and lawyers who are proficient in both French and English. When dealing with any legal documents involved in the house buying process it is essential that you fully understand what you are agreeing to. Misunderstandings caused by misinterpretations can ultimately prove to be extremely expensive and lead to your property dream becoming a nightmare. If the property you end up with your heart set on is marketed by a company or agency which doesn’t have any English speakers, then you will almost certainly need to engage a translator. This will again be something you would again need to add to your budget.
Step three: Local area
While the internet will undoubtedly give you a good introduction to an area, the only way to really get to know a location is to visit it for yourself. When visiting an area – or a particular property – it’s a good idea to talk to locals about what the area is like and make enquiries as to ongoing local developments and the like, as these are unlikely to be revealed by the notaire’s searches. Take the time to visit all the local estate agencies and peruse local newspapers and any free neighbourhood magazines.
If you can, stay in the area that you are interested in – rent an apartment or try out a holiday let to get a feel for what it’s really like in the area in which you wish to buy. It’s always a good idea to look at any potential property investment at different times of the year and in different situations – visit both day and night, if you can – and comparing and contrasting what a property is like in both summer and winter is advisable. If you purchase purely be research undertaken on the Internet, then you can’t really complain if the promised two-minute walk from the local amenities/beach turns out to actually be a 30-minute car drive.
Step four: Make an offer
Once you have found the property you want, your finances are in place, and you have engaged a suitable notaire and lawyer to work on your behalf (preferably in English), it is time to make an offer. Typically, as in the UK, you make an offer via an agent. They will then work on your behalf to come to an agreement with the seller on the offer.
Many, although not all sellers, will accept offers below the market value, so it is worth starting with a lower offer, just to test the water. If the purchase is going to be subject to preconditions such as obtaining a loan or planning permission for new works, etc., then make those clear at that time. If the offer is accepted, this secures the property at the agreed price, but no money exchanges hands at this time and nothing needs to be signed, except perhaps for a nonbinding offer of purchase (offre d’achat). You will be required to supply various legal documents, however, (birth certificate, wedding certificate and a photocopy of your passport), so make sure you have these to hand.
Step five: Do your due diligence
As part of the property sale process, the seller is required to arrange (and pay) for a number of surveys and reports to be prepared on the property. These surveys are called the Dossier de Diagnostic Technique (DDT). They do not, however, comprise a formal structural survey of the property. When completed, they are attached to the sale and purchase agreement. They include a number of diagnostics inspections that are required, depending upon the type and situation of the property. These include asbestos, drainage, electrical installations, energy use/carbon emissions, gas installations, lead, natural risks (flood, forest fires, earthquakes, mining and land pollution) and timber infestation (termite report). If the property is served by a septic tank system and if the system is not compliant, you will have one year from completion to make it compliant – and this can be expensive (more budgeting!). If the property comes with a swimming pool, there needs to be evidence of a check on the swimming pool, particularly its safety aspects.
However, some buyers will still look to pay for their own independent surveys to be carried out on a property, to check for structural defects and issues of damp – issues that are unlikely to be brought up by the DDT reports (yes – more budgeting!). If you plan to have your own survey carried out it makes sense to do this before the signing of the preliminary contract.
Step six: Compromis de Vente
The next step is for you and the seller to sign the first contract, called the compromis de vente. This contract includes all the information and data pertaining to the sale, such as exactly what is included in the sale, the parties, the price, any let out conditions (conditions suspensives) and the expected completion date. The DDT Inspections (see step five) carried out are listed in the compromis de vente and your legal adviser will explain their importance to you.
The reports most likely to lead to some financial outlay by the owner of the property are problems with asbestos, drainage, electrical or gas installations, swimming pools and timber infestation. It is then a matter of negotiating whether the seller pays for these before completion – or by way of reducing the purchase price – or if you will assume the liability of correcting any defaults.
Once signed, the seller is at this point legally obliged to sell you the property, although you still have a further ten days from receipt of the formal consumer protection notice from the agent or the notaire to withdraw from the transaction without liability. At the end of these ten days, providing you wish to go ahead with the purchase, you will need to pay a deposit (usually 10 percent of the purchase price). You are now committed to buying the property, subject to any let-out conditions set out in the compromis, usually if a loan is required or dealing with satisfactory planning, usage and title searches.
Step seven: Completion date
It tends to take between six to 12 weeks for all the paperwork and clearances required for a French property transaction to be completed. On the date of completion (which will previously have been agreed upon in the compromis de vente), you will be invited to the Notaire’s office to sign the Acte Authentique (deed of sale) which guarantees the legal transfer of the property. You will now need to pay the balance of the property and ensure that all fees have been paid to the agent and notaire. You will also need to have a valid household and content insurance policy in place as this is a compulsory requirement on completion. Once all this is in place, the purchase is complete and you will be handed the keys to your very own French abode.
Estate Agents and viewing properties
When researching potential agents, look at some of the overseas property portals to compare regions and agents. This will give you a feel for what’s available and the different services they can offer.