Buying a property in France

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Buying a property in France

Before signing preliminary contracts be certain you have done your homework on the property and all related aspects. It is very easy to become caught up in the moment and fall in love with your dream home, neglecting important issues. You must ensure all funds for any purchase are in place whether these are from a mortgage, loan or in cash. It may be an idea to speak to a currency broker in the early days to gain an idea of your budget in Euros.

So your research is done and you have been fortunate enough to find your French property, what happens next? Once a Euro price has been agreed through the estate agent you should sign a contract. The type of contract you sign will depend upon the type of property you wish to purchase. For existing properties it will most likely be the compromise or promesse de vente - the preliminary contract. For those properties which are new and under construction you will sign a contrat de reservation.

The preliminary contract does commit both the seller and the buyer to the transaction at the agreed price. This however subject to the let out clauses, the conditions suspensives. There is also a seven day 'cooling off period.' When the contract is signed by both parties the purchaser will usually have to pay a deposit, typically 10% of the purchase price. Those purchasing newer properties may see this percentage reduced. It is best to make the cheque payable to the notaire (the notary - in France notaries have official status as a government agent). When the cooling off period ends the deposit is only refundable should one of the conditions suspensives not be fulfilled for a reason which would be beyond the control of the buyer.

If a buyer decides simply not to go ahead the deposit is lost and automatically paid to the vendor. If the seller withdraws then the terms set out in the promesse will dictate what penalty should be paid to the buyer. An important let out clause is that if the purchase cannot arrange a mortgage they should be relieved of their duty binding them to the promesse and have any deposit returned. Therefore a promesse de vente should not be taken lightly as it is the important first commitment you will make to the property. As with any binding document legal advice should be sought beforehand.

If you were purchasing a property in the UK you would most likely check with the local council for any proposed developments within the immediate vicinity. Similar checking principals should also be applied to a French purchase.

The preliminary contract will include a full description of the property in questions including price, last date for completion and any opt out clauses or payable penalties in addition to the identities of both the buyer and vendor.

The vendor and the buyer must sign the preliminary contract, and signing usually takes place in the notaries office. Deposits, stamp duty and registration fees would be paid at this point. Deposits should be made payable to the notaire and not the vendor for security reasons. The notaire will then start to prepare the deed of sale - acte authentique de vente.

The deed of sale will normally be signed in the notarie's office a minimum of 2 months after the preliminary contract is signed. Should you not be able to attend the signing the notaire can be given power of attorney if arranged beforehand. Once signed, the deed of sale completes the transfer of ownership from vendor to purchaser.
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