What are the main steps in the buying process?
How can I be sure there are no major defects with the property?
In addition to the diagnostic tests can I demand a pre-sale inspection?
What is the deposit required when the buyer signs a preliminary agreement of sale?
Is it hard to get a mortgage? What are the rates?
What is the preliminary agreement of sale called?
Is it preferable to sign a promesse or a compromis de vente?
Are the advantages of a Promesse de Vente rather than a Compromis great enough that I should insist on a Promesse?
After signing an agreement of sale and putting down money, can I change my mind and walk away from the sale and get my deposit back?
I've signed a promesse or compromis de vente to buy a property, and the seven-day cooling-off period has expired. What are my obligations?
If I'm buying an apartment, should I be concerned about the co-proprietors association?
What happens at closing, and how do I pay closing costs?
Does JFS help during the entire acquisition process?
Does Just France Sales have a Carte Professionale?
The buying process in France - Paris real estate - Luxury apartments for sale in Paris - Acquire a Paris Apartment
THE PROCESS OF BUYING A PROPERTY IN FRANCE
What are the main steps in the buying process?
We view the acquisition in five distinct phases:
How can I be sure there are no major defects with the property?
The French government requires extensive diagnostic tests (paid for by the seller) to be conducted on a property before it can be transferred to a new owner. The tests are conducted by government-certified private companies. The purpose of these tests (analyses diagnostics) is to inform the buyer of any hazards or defects in the property. The required tests do not cover every aspect of a property, but they do treat most elements that would be covered in a privately financed property inspection.
In addition to verifying the size of the living space and the integrity of the electrical, heating, plumbing systems and insulation, the analyses diagnostics check for the presence of asbestos, lead poisoning, and in some regions, termites. Recently initiated laws further require statements as to potential environmental hazards (floods, earthquakes, water pollution, etc.) as well as an assessment of the property's energy efficiency.
In addition to the diagnostic tests can I demand a pre-sale inspection?
Yes. Given the required diagnostic tests , however, an inspection is generally redundant and not worth the cost. Also, since privately financed inspections are alien to the French real estate culture, insisting on one can sour otherwise cordial price negotiations with the seller.
If a buyer does demand an inspection, the general way of proceeding in France is for the buyer and seller to negotiate a price, and then make signing of the preliminary agreement of sale conditional on the buyer being satisfied with the results of the inspection.
The cost for a private company to conduct a pre-sale inspection runs around 750 - 1,000 € for a country property with pool, and considerably less for an apartment in Paris.
What is the deposit required when the buyer signs a preliminary agreement of sale?
Generally 10% of the purchase price, though during price negotiations it may be possible to negotiate the deposit down to 5%. However, if the buyer backs out of the sale after signing an agreement of sale and expiration of the seven-day cooling-off period , the buyer's penalty for rescission will be a full 10% of the purchase price.
Is it hard to get a mortgage? What are the rates?
While lending requirements have tightened in recent years, buyers with regular job income and generally good credit should have no trouble obtaining a mortgage from a French lending institution. (The lending bank must be euro-based.) With rare exceptions, to qualify for a mortgage foreign buyers will be required to put down at least 15 to 20% of the purchase price, with 20% being the preferred figure.
Smart buyers will strengthen their leverage in price negotiations by being able to show a seller that they have been pre-approved for a mortgage up to a certain amount. Pre-approval can come as quickly as a week after all documentation has been submitted.
Documentation requirements are little different from those in the US and UK: at least two years of tax returns (they do not have to be translated), plus a loan application detailing job history, assets and liabilities, etc. French banks do not use ratings from credit bureaus.
Unlike the United States, where the standard loan has a 30-year term, a French mortgage typically has a 15 to 20-year term. Both fixed and variable-rate mortgages (and combinations thereof) are available.
As of early 2013 interest rates are near an all-time low, in the 3.5% range for a fixed-rate 20-year loan.
French lenders require that the borrower have life insurance on the amount of the mortgage. This requirement can add noticeably to borrowing costs when the applicant is elderly. It may be possible for a buyer with an existing life insurance policy to satisfy the requirement by designating the lending bank as a beneficiary.
What is the preliminary agreement of sale called?
A preliminary agreement of sale is called a Promesse de Vente, or a Compromis de Vente. Its chief elements are the identity of the parties, sales price, conditions of sale (such as the sale being conditioned on the buyer being able to obtain a mortgage), results of diagnostic tests on the property, and the proposed date for the acte de vente (final signature).
Is it preferable to sign a promesse or a compromis de vente?
If you're the buyer, a Promesse de Vente is preferable because it is a one-way contract in which the primary obligations to act fall on the seller.
In brief, in a Promesse the seller is always required to perform - that is, go through with the sale of the property - whereas the buyer has the right to rescind the sale, pay a 10% penalty and walk away.
In a Compromis de Vente, the seller theoretically has the right to compel the buyer to go through with the sale. In practice sellers are usually content with the 10% penalty if a buyer rescinds, but the right to force the buyer to purchase the property is legally available to the seller. If a real estate agency is involved in the sale, the greater threat comes from the fact that the agency has the right to sue to force a sale in order to collect its commission.
Are the advantages of a Promesse de Vente rather than a Compromis great enough that I should insist on a Promesse?
Probably not, if it means jeopardizing the deal. In our experience motivated buyers and sellers who want to do a deal are much more common than parties who maneuver for a legal advantage because they think it's likely one party will back out.
That said, if you're a buyer and you think there's a good chance you may want to bail out, you will be far better off with a Promesse. Of course if you're a seller, the Compromis will you in a stronger position against a balky buyer.
Whether the notaires involved in the transaction will tend toward a promesse or Compromis will have a lot to do with local tradition. In Paris, sales transactions are almost always executed as a Promesse de Vente, whereas in the South of France the compromis is the more common instrument.
After signing an agreement of sale and putting down money, can I change my mind and walk away from the sale and get my deposit back?
Absolutely - for up to seven calendar days after both the buyer and seller have signed the promesse or compromis de vente, and both have physically received fully executed copies of the document.
This seven-day cooling-off period, fixed in French law and taken very seriously by notaires and real estate professionals in France, gives the buyer the opportunity to withdraw for ANY reason and be refunded ALL deposit money. Nor does the buyer need worry about a delay in getting the deposit back, as it is refunded by wire transfer to the buyer's account in a matter of days.
We like to tell the story related to us by an owner who signed an agreement of sale for his sizeable estate in Provence. Within the seven-day cooling off period the purchaser invoked his right to withdraw, saying he had been visited in a dream by his grandmother's ghost, who said the house was haunted. The deal was rescinded and all money promptly returned. That's the law in France.
I've signed a promesse or compromis de vente to buy a property, and the seven-day cooling-off period has expired. What are my obligations?
If you are the buyer and you have signed a Promesse de vente, your obligation is to proceed with the sale. You have the right to withdraw, however, with your penalty being limited to 10% of the purchase price. If the seller tries to back out of the sale, the buyer has the right to demand that the seller perform - that is, go through with the sale. compromis, you are legally obligated to perform - that is, buy the property. In fact the seller will probably let you off the hook for a penalty equivalent to 10% of the purchase price. It is rare, but not unheard-of, for a real estate agency to sue a buyer for specific performance so the agency may collect its commission.
If I'm buying an apartment, should I be concerned about the co-proprietors association?
Every apartment building in France is based on a condominium form of ownership, so each building has its own co-proprietors association, or syndicat. You should definitely make it your business to know what has been voted on at recent meetings of the syndicat, as the association may have recently approved a special assessment for which the buyer will be liable.
However, since it is the notaire's responsibility to inform the buyer fully of any pending assessments, one doesn't have to be on special alert against untoward surprises. As with all stages of the property acquisition process in France, there is full transparency here, and any possible liability for improvements will be explained to the buyer before the preliminary agreement of sale is signed.
Some improvements subject to syndicat approval - installing an elevator, replacing the roof or cleaning the façade, for example - can be very expensive. If the seller was the owner of the apartment at the time the co-proprietors met and approved an improvement, it is the seller's responsibility to pay the special assessment. The buyer is liable only for improvements voted on during the buyer's ownership.
The syndicat meets at least annually to form a budget for paying shared expenses common to the building. These expenses are paid by assessments to individual owners based on their unit's square meterage relative to the entire building.
These assessments, called building charges, are assessed periodically (usually quarterly) and cover ongoing expenses such as maintenance of the common areas, salary of the resident gardien, taxes and insurance, etc. Sometimes the charges include the cost of water or heat to the apartments.
What happens at closing, and how do I pay closing costs?
A week to 10 days before the agreed-upon closing date, the notaire will transmit to the buyer a full accounting of the amount due at settlement. This amount will include the balance due for the property, and closing costs. It will be calculated to the centime. The statement will be accompanied by the notaire's wire transfer instructions.
Using the wire transfer instructions provided by the notaire, the buyer's bank or currency exchange company transfers the designated amount to the notaire's escrow account. The money should arrive in the notaire's account two or three days in advance of closing.
The acte de vente - final signature - takes place in one of the notaire's offices, generally the seller's. The notaire goes through the final sales document section by section, in English if necessary. The acte de vente will be virtually identical with the promesse or compromis de vente. A seemingly endless number of pages are signed or initialed. The whole process takes a little more than an hour. Final signings are often scheduled in the late morning so they can be followed by a celebratory lunch.
Finally, the notaire files the appropriate papers with the French government, and within several weeks the parties receive by mail the equivalent of a deed as well as other official papers certifying the property transfer.
Does JFS help during the entire acquisition process?
Yes, Just France Sales shepherds the buyer through the acquisition from initiation of a property search through price negotiation and (if required) mortgage application to final signing and transfer of utility accounts to the new owner. Just France Sales can also assist with post-acquisition projects such as interior decorating or renovation.
Does Just France Sales have a Carte Professionale?
No. If a Carte Professionale is required to complete a transaction Just France Sales collaborates with one of its scores of agency partners in France that have a Carte Professionale. I'm plenty savvy about real estate transactions in my own country. Can't I just find my own property in France without Just France Sales? Yes, you can. But we suspect you will find the project extremely time-consuming, frustrating and inefficient unless you:
In brief, to find out what properties the agency has for sale will generally require a physical visit to the agency, and will further require getting the attention of a competent person who is interested in working with you. All that can sometimes be a tall order. Additionally, even a Multi-Listing System does not provide an advantage that real estate professionals have - access to owners who are selling their properties privately. Private sales account for a large percentage of real estate transactions in France.
With its access to private owners and its network of licensed real estate partners in France, Just France Sales becomes your MLS. We develop precise search criteria, scour the public and private market for properties that correspond as closely as possible to those criteria, and schedule visits only for apartments that have a reasonable chance of being of interest to the buyer. The savings in time and frustration is incalculable. What should be a joyful experience - searching out a long dreamed-of second home in France - is spared from being a nightmare. Depending on how the property is marketed, the additional cost to the buyer for search services can be very low, or even zero.
The savings in time and frustration is incalculable. What should be a joyful experience - searching out a long dreamed-of second home in France - is spared from being a nightmare. Depending on how the property is marketed, the additional cost to the buyer for search services can be very low, or even zero.
We view the acquisition in five distinct phases:
- Defining your personal and investment goals, and developing search criteria.
- Visiting properties and selecting a property to buy.
- Making an offer and finalizing the purchase price and sales conditions
- Signing a preliminary agreement of sale (Promesse or Compromis de Vente).
- Signing a final agreement of sale and arranging for transfer of utility accounts into the buyer's name.
How can I be sure there are no major defects with the property?
The French government requires extensive diagnostic tests (paid for by the seller) to be conducted on a property before it can be transferred to a new owner. The tests are conducted by government-certified private companies. The purpose of these tests (analyses diagnostics) is to inform the buyer of any hazards or defects in the property. The required tests do not cover every aspect of a property, but they do treat most elements that would be covered in a privately financed property inspection.
In addition to verifying the size of the living space and the integrity of the electrical, heating, plumbing systems and insulation, the analyses diagnostics check for the presence of asbestos, lead poisoning, and in some regions, termites. Recently initiated laws further require statements as to potential environmental hazards (floods, earthquakes, water pollution, etc.) as well as an assessment of the property's energy efficiency.
In addition to the diagnostic tests can I demand a pre-sale inspection?
Yes. Given the required diagnostic tests , however, an inspection is generally redundant and not worth the cost. Also, since privately financed inspections are alien to the French real estate culture, insisting on one can sour otherwise cordial price negotiations with the seller.
If a buyer does demand an inspection, the general way of proceeding in France is for the buyer and seller to negotiate a price, and then make signing of the preliminary agreement of sale conditional on the buyer being satisfied with the results of the inspection.
The cost for a private company to conduct a pre-sale inspection runs around 750 - 1,000 € for a country property with pool, and considerably less for an apartment in Paris.
What is the deposit required when the buyer signs a preliminary agreement of sale?
Generally 10% of the purchase price, though during price negotiations it may be possible to negotiate the deposit down to 5%. However, if the buyer backs out of the sale after signing an agreement of sale and expiration of the seven-day cooling-off period , the buyer's penalty for rescission will be a full 10% of the purchase price.
Is it hard to get a mortgage? What are the rates?
While lending requirements have tightened in recent years, buyers with regular job income and generally good credit should have no trouble obtaining a mortgage from a French lending institution. (The lending bank must be euro-based.) With rare exceptions, to qualify for a mortgage foreign buyers will be required to put down at least 15 to 20% of the purchase price, with 20% being the preferred figure.
Smart buyers will strengthen their leverage in price negotiations by being able to show a seller that they have been pre-approved for a mortgage up to a certain amount. Pre-approval can come as quickly as a week after all documentation has been submitted.
Documentation requirements are little different from those in the US and UK: at least two years of tax returns (they do not have to be translated), plus a loan application detailing job history, assets and liabilities, etc. French banks do not use ratings from credit bureaus.
Unlike the United States, where the standard loan has a 30-year term, a French mortgage typically has a 15 to 20-year term. Both fixed and variable-rate mortgages (and combinations thereof) are available.
As of early 2013 interest rates are near an all-time low, in the 3.5% range for a fixed-rate 20-year loan.
French lenders require that the borrower have life insurance on the amount of the mortgage. This requirement can add noticeably to borrowing costs when the applicant is elderly. It may be possible for a buyer with an existing life insurance policy to satisfy the requirement by designating the lending bank as a beneficiary.
What is the preliminary agreement of sale called?
A preliminary agreement of sale is called a Promesse de Vente, or a Compromis de Vente. Its chief elements are the identity of the parties, sales price, conditions of sale (such as the sale being conditioned on the buyer being able to obtain a mortgage), results of diagnostic tests on the property, and the proposed date for the acte de vente (final signature).
Is it preferable to sign a promesse or a compromis de vente?
If you're the buyer, a Promesse de Vente is preferable because it is a one-way contract in which the primary obligations to act fall on the seller.
In brief, in a Promesse the seller is always required to perform - that is, go through with the sale of the property - whereas the buyer has the right to rescind the sale, pay a 10% penalty and walk away.
In a Compromis de Vente, the seller theoretically has the right to compel the buyer to go through with the sale. In practice sellers are usually content with the 10% penalty if a buyer rescinds, but the right to force the buyer to purchase the property is legally available to the seller. If a real estate agency is involved in the sale, the greater threat comes from the fact that the agency has the right to sue to force a sale in order to collect its commission.
Are the advantages of a Promesse de Vente rather than a Compromis great enough that I should insist on a Promesse?
Probably not, if it means jeopardizing the deal. In our experience motivated buyers and sellers who want to do a deal are much more common than parties who maneuver for a legal advantage because they think it's likely one party will back out.
That said, if you're a buyer and you think there's a good chance you may want to bail out, you will be far better off with a Promesse. Of course if you're a seller, the Compromis will you in a stronger position against a balky buyer.
Whether the notaires involved in the transaction will tend toward a promesse or Compromis will have a lot to do with local tradition. In Paris, sales transactions are almost always executed as a Promesse de Vente, whereas in the South of France the compromis is the more common instrument.
After signing an agreement of sale and putting down money, can I change my mind and walk away from the sale and get my deposit back?
Absolutely - for up to seven calendar days after both the buyer and seller have signed the promesse or compromis de vente, and both have physically received fully executed copies of the document.
This seven-day cooling-off period, fixed in French law and taken very seriously by notaires and real estate professionals in France, gives the buyer the opportunity to withdraw for ANY reason and be refunded ALL deposit money. Nor does the buyer need worry about a delay in getting the deposit back, as it is refunded by wire transfer to the buyer's account in a matter of days.
We like to tell the story related to us by an owner who signed an agreement of sale for his sizeable estate in Provence. Within the seven-day cooling off period the purchaser invoked his right to withdraw, saying he had been visited in a dream by his grandmother's ghost, who said the house was haunted. The deal was rescinded and all money promptly returned. That's the law in France.
I've signed a promesse or compromis de vente to buy a property, and the seven-day cooling-off period has expired. What are my obligations?
If you are the buyer and you have signed a Promesse de vente, your obligation is to proceed with the sale. You have the right to withdraw, however, with your penalty being limited to 10% of the purchase price. If the seller tries to back out of the sale, the buyer has the right to demand that the seller perform - that is, go through with the sale. compromis, you are legally obligated to perform - that is, buy the property. In fact the seller will probably let you off the hook for a penalty equivalent to 10% of the purchase price. It is rare, but not unheard-of, for a real estate agency to sue a buyer for specific performance so the agency may collect its commission.
If I'm buying an apartment, should I be concerned about the co-proprietors association?
Every apartment building in France is based on a condominium form of ownership, so each building has its own co-proprietors association, or syndicat. You should definitely make it your business to know what has been voted on at recent meetings of the syndicat, as the association may have recently approved a special assessment for which the buyer will be liable.
However, since it is the notaire's responsibility to inform the buyer fully of any pending assessments, one doesn't have to be on special alert against untoward surprises. As with all stages of the property acquisition process in France, there is full transparency here, and any possible liability for improvements will be explained to the buyer before the preliminary agreement of sale is signed.
Some improvements subject to syndicat approval - installing an elevator, replacing the roof or cleaning the façade, for example - can be very expensive. If the seller was the owner of the apartment at the time the co-proprietors met and approved an improvement, it is the seller's responsibility to pay the special assessment. The buyer is liable only for improvements voted on during the buyer's ownership.
The syndicat meets at least annually to form a budget for paying shared expenses common to the building. These expenses are paid by assessments to individual owners based on their unit's square meterage relative to the entire building.
These assessments, called building charges, are assessed periodically (usually quarterly) and cover ongoing expenses such as maintenance of the common areas, salary of the resident gardien, taxes and insurance, etc. Sometimes the charges include the cost of water or heat to the apartments.
What happens at closing, and how do I pay closing costs?
A week to 10 days before the agreed-upon closing date, the notaire will transmit to the buyer a full accounting of the amount due at settlement. This amount will include the balance due for the property, and closing costs. It will be calculated to the centime. The statement will be accompanied by the notaire's wire transfer instructions.
Using the wire transfer instructions provided by the notaire, the buyer's bank or currency exchange company transfers the designated amount to the notaire's escrow account. The money should arrive in the notaire's account two or three days in advance of closing.
The acte de vente - final signature - takes place in one of the notaire's offices, generally the seller's. The notaire goes through the final sales document section by section, in English if necessary. The acte de vente will be virtually identical with the promesse or compromis de vente. A seemingly endless number of pages are signed or initialed. The whole process takes a little more than an hour. Final signings are often scheduled in the late morning so they can be followed by a celebratory lunch.
Finally, the notaire files the appropriate papers with the French government, and within several weeks the parties receive by mail the equivalent of a deed as well as other official papers certifying the property transfer.
Does JFS help during the entire acquisition process?
Yes, Just France Sales shepherds the buyer through the acquisition from initiation of a property search through price negotiation and (if required) mortgage application to final signing and transfer of utility accounts to the new owner. Just France Sales can also assist with post-acquisition projects such as interior decorating or renovation.
Does Just France Sales have a Carte Professionale?
No. If a Carte Professionale is required to complete a transaction Just France Sales collaborates with one of its scores of agency partners in France that have a Carte Professionale. I'm plenty savvy about real estate transactions in my own country. Can't I just find my own property in France without Just France Sales? Yes, you can. But we suspect you will find the project extremely time-consuming, frustrating and inefficient unless you:
- Speak very good French.
- Are familiar with all the sources and websites that offer quality properties.
- Are willing to contact scores of different real estate agencies.
- Have access to owners offering their properties for direct sale.
- Are prepared to devote an enormous amount of time to the project.
In brief, to find out what properties the agency has for sale will generally require a physical visit to the agency, and will further require getting the attention of a competent person who is interested in working with you. All that can sometimes be a tall order. Additionally, even a Multi-Listing System does not provide an advantage that real estate professionals have - access to owners who are selling their properties privately. Private sales account for a large percentage of real estate transactions in France.
With its access to private owners and its network of licensed real estate partners in France, Just France Sales becomes your MLS. We develop precise search criteria, scour the public and private market for properties that correspond as closely as possible to those criteria, and schedule visits only for apartments that have a reasonable chance of being of interest to the buyer. The savings in time and frustration is incalculable. What should be a joyful experience - searching out a long dreamed-of second home in France - is spared from being a nightmare. Depending on how the property is marketed, the additional cost to the buyer for search services can be very low, or even zero.
The savings in time and frustration is incalculable. What should be a joyful experience - searching out a long dreamed-of second home in France - is spared from being a nightmare. Depending on how the property is marketed, the additional cost to the buyer for search services can be very low, or even zero.
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