The French property buying process
The prospect of buying a property in France can be an exciting, life-changing experience. Here are the key steps in the process.
The French buying process is relatively straightforward for international buyers. There are slight differences between buying a new-build or development property and a resale home, so it is important to understand the right steps for the type of property you’re purchasing.
Here is a basic outline of the property buying process in France:
- Step one: Initial research & planning
- Step two: The property search
- Step three: Viewing trip
- Step four: Making an offer
- Step five: Initial contracts
- Buying a resale property
- Buying new or off-plan
- Step six: Mortgage (if applicable)
- Step seven: Final contract & completion
Step one: Initial research and planning
The first step of the French buying process is to research where you want to purchase a property. Consider the reasons you’re buying a property as they may influence the location or property that’d best suit you.
Once you’ve got an idea on where and what you want to buy, it is wise to get in touch with professionals who can help make the French buying process smoother.
Key professionals should include an estate agent, independent property lawyer and a currency specialist. You may also need to speak to a mortgage advisor, financial advisor or a visa & residency expert.
Once you’ve made initial contact with your “A team”, you can start your property search.
Step two: The property search
If you have already appointed an estate agent, they will likely send you regular communications on properties that are new to the market. You can also browse property portals online. Here are a few to get you started:
Once you’ve found a few properties you’d like to visit and view in person, it’s time to start planning a viewing trip.
Step three: Viewing trip
International buyers typically visit France to view properties around four months before they want to move or complete on the property. How you organise your viewing trip is up to you, but they typically last between four days and a week. That allows enough time to explore local areas and neighbourhoods when you’re not viewing properties.
Step four: Making an offer
Hopefully, your viewing trip will have been a successful and you will have found a property you like and are in the position to make an offer.
In France, you typically make an offer via your estate agent, who will approach the seller on your behalf. Once accepted, the next step is for you and the seller to sign the initial contracts.
Figure 1 – Basic timeline for a resale property purchase in Franc I Original Image: PropertyGuidesFrance
Step five: Initial contracts for resale homes
There are two options here, the Promesse de Vente or the Compromis de Vente.
Promesse de Vente
The first stage of the French buying process for resale properties starts with the Promesse de Vente. This is an optional document when you have reached an agreement on the purchase of a property with the buyer. This document is not mandatory, but it is recommended.
The Promesse de Vente is a unilateral promise where the seller promises to sell the property to the prospective buyer and the buyer has an option to purchase, in return for a holding fee. This setup gives the buyer a bit more leeway.
It is legally binding to the seller, but not the buyer. This is a common route for those who need time to decide for various reasons, as it grants peace of mind that the property won’t be sold to someone else.
This contract can be carried out as a deed under private signature or as an authentic deed in the notaire’s office.
Clauses included in the Promesse de Vente may provide for the payment of sums of money as soon as it is signed or within a specific period.
After signing, there is a 10-day cooling off period in which either party can withdraw from the agreement without penalty. After the 10 days, the contract is legally binding to both parties.
Compromis de Vente
The Compromis de Vente is the most common initial contract when buying a property in France. It is a bilateral contract whereby the vendor agrees to sell, and the buyer agrees to purchase. This act binds the buyer and seller.
This contract will be drawn up by your estate agent or notaire. It will contain all the usual information such as the price, property description and notional completion date. It will also contain any conditions that must be fulfilled prior to the signing of the acte de vente. Should you wish to add any suspensive clauses, we recommend you speak to an independent property lawyer.
Once signed by both parties, a 10-day cooling off period commences the day after register of receipt. After the 10 days, the contract is legally binding to both parties.
Sales deposit
The buyer will usually pay a deposit of 5% of the purchase price, to either the seller’s estate agent or the nominated notaire. After this has been received, the notaire will commence the usual checks on the property re. standard searches.
It can be best to avoid the Offre d’Achat. If this comes up, ensure the content is reviewed by a solicitor or specialist property lawyer as they can be construed as binding without condition.
Step five: Initial contracts for new or off-plan properties
Véfa reservation contract
If buying a home to be built or under construction (sometimes referred to as off plan), you will likely be asked to sign a reservation contract (Contrat de Réservation in Véfa). The Contrat de Réservation, also known as the preliminary contract, is a recommended contract (although non-mandatory) between the developer and the buyer which determines the conditions for the sale and the delivery of the property.
It must contain information about the seller and buyer, accommodation and about the sale. Find out more about what it must contain here. The contract is typically drawn up as a deed under private signature, however, it can be signed at a notary’ office.
There is a 10-day cooling off period following the signing of the Contrat de Réservation, which allows either party to withdraw from the agreement without penalty. This period starts the following day after receiving the register of receipt.
Security deposit for Véfa reservation contract
To reserve a new or off-plan property, the seller can ask the buyer to pay a security deposit which represents a certain percentage of the total price. This is paid into a bank account in the name of the buyer or the notary.
The amount of the security deposit is limited to[i]:
- 5% of the sale price if the deed of sale is signed within a period of less than 1 year
- 2% if the deed is signed within 1 to 2 years
No security deposit can be claimed if the deed of sale is signed beyond two years.
In circumstances where:
- loan is refused by the bank
- the seller fails to complete the contract
- the selling price is more than 5% higher than the revised forecast price
- or if there is an abnormal difference between the contract of sale and the provisions of the preliminary contract
then the security deposit will be returned to the buyer. This return will be without penalty or deduction and returned within three months of the above situations.
Step six: Mortgages (if applicable)
The best good time to explore financing options for your French property purchase is before you start looking in the first place.
Alternatively, after signing the Compromis de Vente you’ll have a legally binding contract. Consider consulting with a mortgage advisor in France as they’ll be able to access more lenders and advise you on applications and other things, such as health and life insurance.
Since the global financial crisis lending conditions have become more stringent. In France, interest rates are lower than they were, but they are set by the lenders. These are usually influenced by the Euribor (European Interbank Offer Rate).
Lending criteria tends to be based upon a percentage of your income, typically to a limit of 33%. However, there are exceptions to this and different interpretations of the rules. Some lenders believe it should be on gross income and others contrarily on net income. As there are many different types of French mortgages available, each with varying levels of criteria, it is important that you assess all your options carefully.
Step seven: Signature of purchase deed & completion
Usually two-to-three months after signing your initial contract, the signature of purchase deed will be ready.
This is known as the Acte de Vente. The Acte de Vente is signed at the notaire’s office in France by the buyer and the seller. If either party cannot be there in person, they may grant responsibility to their independent lawyer via Power of Attorney. The notaire will oversee this process then authorise the sale. After signing, you will receive the keys to the property either from the notaire or estate agent.
If you can’t be present, your lawyer can take the keys on your behalf.
Before signing the final deed (Acte de Vente), the buyer must pay the full price of the sale and the notary fees. This is paid by bank transfer for all sales greater than €3,000. Funds are usually deposited into the notaire’s account at least three working days before the Acte de Vente is signed. Give yourself plenty time to do this in case there are any issues with making your payment e.g. anti-money laundering checks.
The notaire will then register the title deed and mortgage with the land. A copy of the registered title deed will be sent to the notary archive and the buyer approximately one year after purchasing.
The notaire will issue a receipt to the buyer, and then transfer the amount of sale to the seller after the registration of the deed with the Land Registry Service.
Once the Acte de Vente is signed and you have received the keys to your property in France, the purchase is complete.
[i] https://www.service-public.fr/particuliers/vosdroits/F2963
