Buying a property in France, what are the different stages
24 March 2023
Having found your dream home thanks to our guide Looking for a Property to Buy in France what next?
French administrative formalities are bound up in "red tape", and
buying a property in France is no exception. However, the system is in
many ways better and safer than that applying in many other countries.
All normal property transactions must pass through a "notaire" (notary) who is the only person who can make the title searches and obtain certain legal documents necessary to make the transaction possible. The purchaser buying the property may choose the notary he wants to handle the transaction.
The purchaser is responsible for the payment of the "notary fees" which, depending on the selling price, can be as much as 8% on small old properties (though around 7.5% is more usual), or as little as 1.5 to 2% on newly built properties, with an additional cost of around 1 to 1.5% if a mortgage is to be registered on the property.
One should note that prices of property are generally advertised exclusive of these charges. The notary fees are determined by the French state (on a scale which is the same for all notaries) and the state takes a large share. If you understand some French you can use this link to calculate the Frais de Notaires more accurately.
If an owner wants to impose his notary - which is allowed under French law - be aware that you have the right to choose your own notary who will work in collaboration with the owner’s notary. In fact, it is not unusual to have two notaries working on the same transaction, with no additional cost to the purchaser as fees are shared. However, the delay may be longer as the two notaries have to transmit various documents to each other, which can take a surprising amount of time.
Let us take a hypothetical example of a property transaction. Mr. Brown has visited some properties with Coast and Country. He decides to make an offer on a resale property listed at 300,000 Euros and informs Coast and Country that he is prepared to pay, say, 280,000 Euros. Coast and Country will normally require a written offer from the purchaser in order to be able to convince the owner to accept the offer.
Once the two parties have reached an agreement regarding the sale price, the terms and conditions of the sale are discussed with the notary who then prepares the preliminary contract or "compromis de vente". This contract is just as important as the final document transferring title as it must contain all the clauses and conditions precedent to the sale. These include clear title, easements, certificates stating whether the property conforms to current legislation on asbestos and other matters, and, most importantly, whether the purchase is subject to the condition of obtaining finance.
Signature of the compromis de vente should not be taken lightly. Before doing so, Mr. Brown should be absolutely sure that he wants the property and that he is aware of the contents of the contract he is signing. Should the notary not speak sufficiently good English, Mr. Brown should ask for an interpreter or, if the contract has been sent to him in the UK, have it explained to him word for word in English.
It is at this stage that a deposit of usually 5 to 10% of the purchase price has to be made. Payment by bank transfer will normally be made to a notary and although some agencies with the correct insurance have the right to put the deposit into their own escrow account, it is probably wiser to insist on making the payment to the notary whom you wish to act for you.
Mr. Brown will receive a copy of the compromis de vente signed by both parties, and from the date of receipt he has ten days in which to change his mind. At the end of this period, the contract becomes binding and the transaction is now "under compromis". The owner cannot sell to anyone else, nor change the price, and if he refuses to sign the final document the purchaser can obtain a court order forcing him to sell. On the other hand the purchaser can pull out without losing his deposit if one of the clauses or conditions precedent inserted in the contract has not been fulfilled. Otherwise he may be able to pull out but will almost certainly lose his deposit.
The notary will require two or three months from the signing of the compromis to prepare all the necessary paperwork before getting the parties together to sign the title deed ("acte definitive"). During this period it is wise to consult with the notary or a tax lawyer to decide what is the best way to purchase in order to avoid future difficulties, for example with French succession law. Make sure, however, that if a loan is involved, and the final purchase is to be made in the name of a person or a company other than that stated on the compromis, the financial organisation is informed of the change as soon as possible as any loan offer documents have to be issued in the correct name.
When both the parties have signed and Mr. Brown has paid to the notary the balance of the purchase price as well as the notary fees, the notary settles any debts the owner may have (typically to banks), pays Coast and Country its commission and then gives the balance to the owner.
As of the final signature, Mr. Brown becomes the legal owner of the property and receives the keys.
Should Mr. Brown be buying a new property “off plan”, the procedure is slightly different with a Reservation Contract being signed rather than a compromis, and a deposit of 5% is usual. As with a re-sale property the final deed is signed before a notary but this may be before the property is completely built, in which case a detailed payment schedule, linked to the work’s progress, is attached.