The Guide To Your French Property Purchase
The process of buying property in France is well regulated and not difficult but it does differ from the U.K. system and it does take place in the French language! In this Guide to Buying French Property we set out the best way to proceed from the start of your search for a property in France, to finding the house and to the legal process, step by step.
Handy Hints To Remember Throughout The Purchasing Process
- Keep your head on! It is easy to get tempted. Somehow people sometimes do silly things when they are in a foreign country. Don’t be one of them.
- Research well but don’t believe everything you see online. Check and double check!
- Know what you want, where you want it and what your budget is.
- Never forget that when it comes to legal matters a little knowledge of the French language can be a dangerous thing. It is worth considering whether you need a translator at any stage in your property buying.
Step 1: Determine your budget for the purchase of your French property.
This really needs to be the first stage in your buying as prices vary hugely across France and your budget may well determine which areas of France are suitable for your search.
If you plan to raise finance for the buying property in France it is a good idea to check out French mortgages. French mortgage lenders are very willing to offer loans for French property purchase to non-resident buyers, so you do not need to rely on re-mortgaging your existing home or on an international lender in your home country. All French mortgage providers have bi-lingual staff to assist throughout the process of raising finance for French property purchase.
Handy points to consider when financing a French property purchase
- French mortgage interest rates often compare favourably to those in the UK, so it is frequently cheaper to purchase your French home with a French mortgage, rather than re- mortgage your existing home. Having a French mortgage for your French property also safeguards your U.K. home.
- However, if you are buying a house in France, and you are continuing to derive your income from the U.K., you need to weigh up the currency risk associated with obtaining a euro mortgage when buying property in France.
- You will receive a formal mortgage offer from a French lenders. Formal offers are only provided once you have signed the first contract (Compromis de Vente) for the property, but you should try to obtain a pre-approval mortgage certificate which can be useful in price negotiations.
- If you do not live in France you will need to supply plenty of supporting documentation and the process may well take some time to complete.
- Most French lenders will not offer mortgages greater than 80% loan-to-value, but the figure may also be lower or higher depending on your circumstances
- As a general rule when buying property in France is that the mortgage repayments must not exceed 33% of your net income
- French lenders offer both fixed and variable rate mortgages, and whilst the latter are tempting they are also likely to include tougher early redemption penalties.
- Mortgage insurance protection is mandatory and the arrangement fees can also be high so be sure to allow for these costs in your budget
Step 2: Choose Your Area Of France
If you do not have an area of France that you know well and where you have already decided to buy your French home then this stage can be very confusing. France is so much larger than the U.K. and has a great variety of landscapes, climate and lifestyles. Every part of France has something special to offer and it can be really difficult to choose where may be right for you.
Handy points to consider when choosing an area for your French home
- Decide how much heat/snow you want and check out the climate of different areas. France is renowned for its micro climates so although in general, the further south you travel the warmer the climate, it is best to check carefully that the area you choose will have a climate that suits your needs.
- Think about the French lifestyle that you want. Although rural properties are idyllic on warm sunny days do remember that they can also be lonely places on dreary winter days. French Village and town houses may not have so much ‘kerb appeal’ but they do offer community life and an easy way to find new friends and settle in.
The team at Healey Fox have extensive kowledge and experience of France and its regions, call us on +44 (0)1306 775 008 for an informal chat. We will be very happy to help you decide where in France would most suit your needs.
Step 3: List The Important Things For French Property Purchase Experience
With your budget sorted and your area chosen the next thing is to make a list of things that are essential, both in the location and in the property itself. You can also add a list of other things which, although desirable, would not be ‘deal breakers’. You will find this list invaluable as you start to view French properties online and even more important as you go out to view properties. It can be so easy to get carried away by a charming property.
It’s good to keep the list by your side as you view properties just to ensure that either it has everything on your ‘essentials’ list or that you are aware it does not but are happy to forgo those things that seemed so important before you fell in love!
Handy points to think about when buying French property
- Style of property, bungalow, cottage, detached, farmhouse, modern house etc
- Size of property, how many bedrooms, bathrooms, living space, over how many floors
- Size of garden, never forget that gardens require work!
- Swimming pool, garage, workshop, a second accommodation unit etc.
- Condition, are you happy to redecorate or renovate or do you want to move in and enjoy.
- Location, rural, village or town. Each will offer a different kind of lifestyle
- What you need access to, bakers, bar, airport, hospital etc. Will you want to have to drive to everything? Bus transport is not frequent nor in abundance in rural France.
Step 4: From Internet To Viewing Appointments
Hopefully by this stage you will have spoken to a few French property agents or companies dealing with French property and may have a feeling for the company or companies that you would like to work with. Now it could be time to make the property viewing arrangements. It’s good to give at least one month of your travel plans wherever possible. U.K. based companies should be able to make appointments for you with their agents in the area you have chosen. These agents will show you properties you have selected and may well also show you some that you didn’t spot but which may prove to be just right for you.
Healey Fox usually make half day appointments for clients when they will meet with the agent in their office, plan the viewing schedule and head out on the road. We often make appointments with more than one of our partner agents in the area depending on the properties you are looking for so keep a few days free to view houses with the Healey Fox partner agents. Call us +44 (0)1306 775 008 to discuss your viewing appointments.
If you are not using Healey Fox’s partner agencies for your French property purchase then when, choosing an Estate agent to work with, it is good to check that they are a member of a professional body. You should look to see whether there is a note of any of the following apparent in their office:- FNAIM, SNIP, UNPI. Agencies are obliged to indicate their membership of a professional body.
The French agency is also legally obliged to operate under a Carte Professionelle which gives the holder, and his or her staff and colleagues, the legal right to work with the French property market. You may find that the person you meet in the agency is an Agent Commercial, who will be a professional person working under the supervision of the holder of the Carte Professionelle but with full experience to offer all the necessary help to vendors and buyers. You may be asked to sign a Bon Pour Visite which will list the properties that the agent will show you. With most properties being offered for sale with several agencies this is just a way for the agent to ensure that they are paid their fee if you buy one of the houses they show you.
Handy hints for the viewing trip
- Make sure you know where you are meeting the agent and be on time. Call if you are running late.
- Dress sensibly. Viewing trips are hard work, sensible shoes are a must.
- Try not to take photos. It is always best to get a ‘feel’ for a property. If it is near the top of your list by the end of your viewings you can always return to take photos.
- Give the agent useful feedback. If it is negative try not to do so in front of the owner! Armed with feedback the agent may well be able to take you to a house that you had not discussed but which may meet your needs better.
- If you find a property you like then spend some time walking around the area, getting to imagine what it would be like to own a house there. Pop into the local café and boulangerie, try to think if you could imagine being part of the community. Do all of this before you make a decision to buy!
- Make sure you let the agent know your thoughts at the end of the viewing session. It will help the agent and yourselves to move forward with your search for the right French property.
Stage 5: Your French Property Found
You may have found your house with the help of a French estate agent or privately. Whichever is the case, the legal process of buying the property is the same, it is just that more work will fall to you if you are buying privately.
Buying French property privately
40% of French property is bought and sold privately and if you choose to go down this route you and the vendor will need to take over all the tasks involved in the process which would normally be done by an estate agent. This will take time so you need to ensure that you have the time and are organised enough to take this job on.
Healey Fox have a selection of privately advertised houses on the web site, see Healey Fox selection of privately advertised houses here.
Using an estate agency in France
Estate agency in France is a highly regulated profession and the help of an agent can be particularly invaluable if you do not have a working knowledge of French or of the buying process or if you are short of time. The fee charged by the French estate agent is included in the price of the property in the details which you will have seen online or in the agent’s office. This fee is paid by the vendor.
Stage 6: You decide to make an offer on a property in France
One important thing to be aware of is that the purchase of a French property becomes binding much earlier on in the process than it does in the U.K.
Once you find the house you want to buy you probably want to negotiate the price. It is completely normal in France to do this but you are required to make a written offer to buy, together with the price you are prepared to pay. Your estate agent will advise on the offer that is likely to be accepted and assist you with making the offer.
At this stage it is important that you consider, if the offer is accepted, whether there are any conditions which must be met before you will go ahead with the purchase such as obtaining a mortgage, planning consents etc. These should all be noted in the written offer. Should your offer be accepted you are theoretically legally tied into the purchase. It is important that you do not make simultaneous offers on more than one property to see which you can get at the best price!
Stage 7: The Compromis de Vente is prepared
Once an offer to buy is accepted it is time for the legal process to begin. It may be the Notaire who produces this first contract but is more likely to be the French estate agent. The first contract, one of two legally binding contracts involved in the sale and purchase of a French property, is be referred to as the Sale and Purchase Contract, the Promesse de Vente or the Compromis de Vente. Normally a standard pre-printed and pre-translated form is used, examples of which are shown.
The Compromis de Vente will include the following information:-
- Civic status of all sellers and purchasers
- Description of the property with the cadastral (land plan) references and the surface area
- The agreed price, including the agency fee
- The estimated Notaire’s fee
- Information on the status of the Dossier Diagnostic Technicque reports
- Any conditional clauses (conditions suspensive) which are anything that is vital to the purchase and without which the purchase will not go ahead i.e. mortgage finance (for which details of the organisation granting the mortgage, the rate of interest and the term must be quoted), planning permissions etc.
- Circumstances under which the deposit may be forfeited
- Obligations and declarations of the vendor
- Target completion date
- List of any furniture and fittings included in the purchase
It is vital to ensure that any conditions,Conditions Suspensive, which must be met before you can sign the final Acte are carefully listed in the Compromis de Vente, these could include the need for you to obtain a mortgage (for which you must state the lender, the interest rate and the term of the mortgage you are applying for); planning consent, confirmation of any possible rights of way or other easements on the property etc.
If you believe you may need some building work done to the property or if you wish to change the property with the use of a builder, it is wise to get estimates for this work before you sign the Compromis de Vente in case the cost means that you do not wish to proceed with the purchase or you can use the estimate as a final negotiation point on the price.
Once the Compromis de Vente is signed by all parties there is a 10 day ‘cooling off’ period for the buyers only. This period starts the day after the signed Compromis de Vente is received. If during this period you wish to withdraw from the purchase you must notify the agent or the Notaire in a letter sent by Recorded Delivery. Once the ‘cooling off’ period is over the deposit (5-10% of the purchase price) is due and you will need to send it to the Notaire or the agent who will hold it in a non-interest bearing client account.
Step 8: Get the best Exchange rates
Sorting out the transfer from sterling to euros of the finances for the purchase needs to be done at the same time as the preparation and signing of the Compromis de Vente. Obviously, if you are using a French mortgage for part of the purchase these funds will automatically be transferred to the Notaire’s bank account in euros. You will, however, need to arrange transfer of the deposit monies, in euros.
Healey Fox work with a Currency Exchange partner who can offer invaluable help, advice and good rates. It is important to know that you will get a much better exchange rate from a Currency Broker than from your local bank.
Step 9: Understanding the role of the Notaire
The Notaire is a public officer and a legal specialist who draws up authenticated contracts for clients. Usually both parties use the same Notaire but it is the buyer’s right to choose their own Notaire, should they wish to do so. The costs will remain the same as both Notaires will share the fee. This can have the effect of making the process less efficient.
The charge made by the Notaire is normally 2%-8% of the net property price and you will need to allow for this in planning your budget. The Notaire only receives 1% and the rest of the money is for government taxes and disbursements. The main task of the Notaire in a property sale and purchase is to check that everything listed in the Compromis de Vente is correct. To this end, amongst other things, he or she will check with the Land Registry that the property, as defined in the Compromis de Vente, is owned by the vendor and that there are no charges on the property. These legal searches can take 2-3 months.
Do be aware that a Notaire does not carry out such exhaustive searches as those carried out by a conveyancing solicitor in the U.K. You will need to check with the estate agent for any local planning consents near to your property. If they do not hold the information then check with the local Marie and asking to see the Plan Communale. A Notaire does not have responsibility for advising buyers on the form of contract which they should use for the purchase
Step 10: The Things You Need To Do Now You Are Buying Your French Home
The form of contract
- The Notaire will want to know under what form of contract you wish to make the property purchase. The disposal of your French Property on your death cannot be made part of a Will.
Under French law your French property cannot be made part of any will that you leave. It is the form of contract that is used to purchase the property that will dictate what will happen to the property on your death.
Basically you can choose one of three forms of contract:-
En Tontine – your property or share of it will pass to a surviving spouse when you die.
En Indivision – if buying as unmarried couple the share of the property belonging to the deceased partner will pass to any children leaving the ownership of the property split between the remaining owner and the child or children of the deceased person.
S.C.I. – Société Civile Immobiliére, a non-trading property owning company
Choosing the form of contract is complicated. There is much information online (but not all of it accurate), the French estate agent will advise and if you are lucky, the Notaire may be able to help. However, none of these people are obliged to assist you and whatever information you receive, it is always worth checking and checking again! If you have a very complicated buying arrangement it may be worth discussing the options with a French Notary based in the U.K.
Get ready to insure your home in France
- It is a legal requirement to have your French property insured and the Notaire will need to see details of the policy which you will have taken out readymfir the date if signing. Your French estate agent or the current property owner should be able to assist you with this.
Step 11: Nearly There!
The Acte Finale or Acte de Vente will contain all the information listed in the Compromis de Vente but in more detail. There will be a fuller description of the property, details of the mortgage, details of the insurance on the property, details of any fixtures or fittings that are included in the purchase, breakdown of the taxes payable and the survey reports will be annexed to the contract. For your part you will need to supply originals of your passport(s), birth certificate (s) and if relevant, marriage certificate(s), divorce certificate(s) and death certificate.
Dossier Diagnostic Technique
There is a raft of surveys that need to be done before property can be sold in France and the results of these will be annexed to the Finale Acte. These are all paid for by the vendor. However, it is good to be aware that these are not the same as structural surveys which are carried out on U.K. properties.
France does not have a network of property surveyors although there are a few English surveyors who have set up business. If you see something that is worrying you about a property and which believe you would ultimately need a builder to fix for you, it can be wise to get a builder in to provide an estimate. This should be done before the Compromis de Vente is drawn up. Having a builder’s estimate allows you to know what is wrong with the property and how much it will cost to put right. It can also be a good negotiating tool to reduce the sale price.
The Dossier Diagnostic Technique is the name given to the following collection of reports.
- Asbestos – required for all properties with no planning permission or planning permission granted before 1997
- Lead – only in paintwork, required for all properties built before 1949. This report is valid for 12 months if lead is found or for an indeterminate period if no lead found.
- Termites – survey required only in certain departements. The report is valid for 6 months
- Natural or industrial risks – only required in specific areas. Validity of 6 months
- Gas installations – report valid for 3 months
- Electrical wiring – required if the wiring is over 15 years old. You must declare if you have installed any form of English wiring. Valid for 3 years
- Septic tank – if the fosse septique is found to be defective the owner of the property has 12 months to comply with whatever needs to be done. The installation of a new system can cost between €5000 to €15000
- Energy efficiency
Step 12: Its Time To Sign For Your French Home
- One last thing for you to do
There is a clause in the Finale Acte stating that you are buying the house in the condition that exists on the day of purchase. It is wise to check on the property before you go to the Notaire’s office to sign the contract. It is also worth checking that everything you are expecting to be left (and has been listed on the Compromis de Vente) is there and anything you do want to be left has been removed! If you have any problems with what you discover then you must make the Notaire aware.
The Notaire will inform the vendors and buyers when the Acte is ready for signing. He or she will also call for the mortgage funds and/or request final payment from the buyer. These funds must be in the account of the Notaire before the final signing of the Acte.
If you can’t be at the final signing
To complete the Acte the vendors, purchasers and Notaire will need to sign the document. If it is not possible for one more of the vendors or buyers to be present then each one who cannot attend will need to arrange a Power of Attorney – Procuration in advance. This document will n be drawn up by the Notaire and will need to be signed in front of a public Notary in the U.K. (There will be a charge for this). The Power of Attorney gives a nominated person (usually a clerk in the Notaire’s office) authority to sign the Acte on your behalf. You will receive a copy of the Acte de Vente before the day of signing and if you are not able to be present in the Notaire’s office it is vital that you understand this document. Some Notaires do send a translation of the contract but if your Notaire is not able to do this then you should employ a translator. It is worth checking with the Notaire whether he or she believes you will need a translator as you will need to book one in advance as there is usually not a lot of time between the Acte de Vente being ready and the date of signing. There are many companies offering legal translations to be found online.
The final signing
It is the Notaire’s responsibility to ensure that all parties to the contract understand the contents of the contract. Some fulfil this role to a greater extent than others! If your Notaire does not speak English it is a good idea to discuss the hiring of a translator with him or her in advance. If you have bought the property with the assistance of a bi-lingual estate agent then they will be at the final signing and able to assist you. Just check all of this before turning up to sign for your new home in France.
Once the Acte is signed by all parties and witnessed by the Notaire, he or she will provide an Attestation, which is a document confirming the transfer of ownership. This will be needed when registering for utlilities and other services.
The amount of tax payable in the current year will be proportioned by the Notaire who will notify you of the amount which you will need to repay to the old owners. However, the tax d’Habitation, for the current year, currently still being charged, is not deemed to be payable by the new owner.
If you are buying with the services of French Estate Agency they are likely to be able to help you arrange to take over the services currently provided to the owners. Later on you may decide to change the supplier but at first it is easier to take over the existing contracts.
Well done, you made it. Welcome to your new French home.