The French housebuying process

Once you have picked a house, or houses, from the agents’ lists, you will be taken to view them. It’s often said that, because several agencies are usually instructed to sell a house, agents can be very possessive about their clients. There’s a certain truth in this, but the real reason is that accompanying potential buyers on viewings is the norm in France; in fact it’s a requirement. Some, but not all, agents will ask you to sign a document before any viewings take place. This is known as a ‘bon de visite’ or ‘mandat de recherche’ and ensures that once that agent has shown you the house, you can’t reduce costs by dealing direct with the seller or going to another agency.

Making an Offer
If you decide you want the house, you will make an offer. You still hear reports of houses selling for way below the asking price - this may still happen in a few as-yet less popular regions, but it seems far more common – at least when houses are selling well - for buyers to insist on the price they are asking and not to consider lower offers. When an offer is made at the asking price then the seller is legally bound to accept it. There’s nothing to stop a buyer offering less, but beware: because houses are on the books of several agents it’s not uncommon for a higher offer to come in while your lower offer is being considered, and before you know it the seller has agreed to sell at that higher offer.

Contracts

When an offer is accepted, the estate agent, or a notaire will draw up the initial sales contracts. These are generally know as either a compromis de vente, or sous seing privé, but can come under other names in different areas. Unlike English property transactions, when a buyer can pull out with no reason, there is a moral expectation in France that once the buyer has made an offer then he will continue with the transaction, unless something happens outside the buyer’s control. The French compromis is a binding contract. So it is important that any questions about the condition of the property, the planning status, getting a mortgage etc are resolved before signing the compromis, or are subject to conditional clauses ("clauses suspensives").

The Compromis de Vente is the first formal and legally binding stage in the property purchase process in France. It is a written contract of sale agreement which legally binds together the seller and purchaser. The format may vary but all Compromis de Ventes should state clearly the key points of agreement including:

·         Details of purchaser and seller (you will need to provide "Civil Status" information including your full names, contact details, professions, birth and marriage certificates, passport copies, details of ex-husbands and wives

·         Confirmation of the name and ownership "Title" details of the property
A description of the property including reference and map of the plot as it is recorded in the Land

·         Registry of your local the Commune

·         The price agreed (sometimes furnishings and fittings may be negotiated as a separate amount)

·         The deposit agreed (usually 10% to be held by the Notaire usually or in some cases the agent) see also: What methods of payment should be used

·         The circumstances under which the deposit may be forfeited

·         Some declarations by the vendor about the property

·         Some obligations of the purchaser in buying the property

·         Results of the lead, asbestos, and natural disaster reports and details of the 2 other obligatory reports on termites and energy efficiency. These reports are not all required for every property. It will depend on the certain aspects such as the age of the property and which region it is situated in.

·         Provisional conditions (Clauses Suspensives) - these will include certain standard conditions which will be inserted by the person drawing up the agreement (e.g. that there are no other claims to the Title or that the searches conducted by the Notaire's office do not reveal any problems). NB: The purchaser can request and negotiate the insertion of additional Provisional conditions before the Compromis is signed e.g. complete building work, obtain a mortgage or planning approval etc

·         Full details of the estate agents fees and on our contracts, provision for legal fees, (these generally do not appear on contracts drawn up by a notaire, but they can be provided on request.)

·         Various declarations by both purchaser and vendor about their ability to complete the contract

·         Statements describing what happens if either side fails to complete his part of the bargain, e.g. penalty clauses

·         The target completion date (note this is not definitive or guaranteed and can be changed by agreement between purchaser and seller or if the notaire has not completed his work for any reason)

·         Separate inventory of items to be included in the price

·         Copy of the land plan as an annex

Understand what you are about to sign
As purchasers it is essential that you understand every aspect of the Compromis de Vente as it is sets out all the key terms of your purchase.

Key points
All points within the agreement are important but particular attention should be focussed on the price and costs, the details regarding the Title and Land Registry information, the Provisional conditions (if these cannot be met you may be entitled to withdraw from the purchase) and the declarations made by the vendor.

The buyer generally signs the contracts first, then the seller will sign. Once the seller has signed, the contract becomes binding for him, he is not allowed to withdraw from the sale without paying a 10% penalty. The buyer is given a seven day period of reflection in which he can withdraw without penalty, generally know as the seven day cooling off period (loi SRU)

Seven Day Cooling Off period

The estate agent or notaire will send the purchaser a letter by recorded delivery with a copy of the compromis, signed by all parties enclosed. The seven days begin the day after this letter is received, and include Sundays and bank holidays. If the buyer wishes to withdraw from the sale within this period he must send a letter by recorded delivery to the estate agent or notaire. If you are considered to be a property professional you may not be entitled to this cooling off period so obtain further advice first if you think this may apply to you. Once the seven day period is over, the buyer like the seller is legally bound by the contract and cannot withdraw for a reason other than a suspensive clause without forfeiting his 10% deposit

Deposit

This is normally payable to the notaire, though some agents maintain special secure accounts to hold deposits. Don’t pay anything before signing, particularly not to any agent personally. This is paid once the seven day cooling off period has finished. It can be paid by the means of a French cheque, or a bank transfer from a foreign or French account. The amount is generally 10% of the price of the house.

 After signing
Once the Compromis is signed, the agent, and the Notaire (who acts for both parties under French law) will carry on the process of checking records and documentation regarding the property and land. Two to four months is generally allowed for this process but it is possible to move more swiftly, (depending on the clauses within the contracts) if both parties are agreed and the Notaire is able to conduct documentation searches without delays.

Mortgages

The only aspect of the contract that the notaire will not chase up is if the buyer is getting a mortgage. According to the contracts, the buyer will have a limited period of time firstly to apply for the mortgage (generally 30 days), and then secondly to receive a response from the bank (generally 60 days). So it is essential to provide the bank with paperwork as quickly as possible, and to keep in constant contact with them throughout this period. 

Completion date
Note that the completion date shown in the Compromis is a target date which will allow you to plan removals, funds transfer etc however the date will need to be re-confirmed as completion draws nearer. The completion date is the date when both parties will attend the Notaire's office to sign the Acte Authentique (or nominate a proxy, an alternative person, to sign on their behalf by power of attorney).
The rest of the price, including legal and agency fees etc, must be in the notaire’s account by the signing date, and after signing the house becomes yours.

Getting the money there on time
Note that it is the buyer's responsibility to make sure that the money, including all professional fees but less any deposit paid, reaches the notaire's account in time for clearance of funds before signature. Bear in mind that the French banking system doesn’t operate during weekends, or bank holidays and in the case of some banks, Mondays, so try to llow 5 days for the money to arrive. Variable exchange rates can have quite an effect on the actual sum required, so many people use a currency exchange company. French money-laundering regulations mean that you won't be able to turn up with a handful of Euros or a personal cheque. But however you intend to pay for your house - by bank transfer, banker's draft, French or British mortgage, or via a currency exchange specialist - it is important to ensure that all parties are aware of the date by which the notaire requires the money.