Even if you have read a couple of good books on buying property in France and feel you’ve got a good grasp of things, do take an extra moment or two to review information found on websites belonging to legal advisors. Headdon Consulting has a really excellent and very well written guide you can print off free of charge. You can also ask to be put on their e-mailing list and kept updated with news and other very useful tips and information. Stephen Smith (France) Ltd has a rather good FAQ section you should browse through too.

Barclays Banks has produced a glossy A4 brochure you can request free of charge. Entitled “Destination France - Guide to buying a home in France” wording is clear, precise and easy to read.

Buying your new home
For those of you who have yet to start any research at all, we’ve put together a brief explanation as to what you can expect when purchasing property in France. It goes without saying that discussing your budget and other financial matters with your bank or legal advsior prior to starting your research will help you enormously and should not be put off until you’ve found your dream home.

As you’ve probably guessed, it is a legal requirement in France that all property contracts be written in French and all money transactions be in Euros. However, the estate agent will try their best to have all documents translated into your mother-tongue. Although slightly costly (and time-consuming as they can only be translated by a certified translator and they are generally very busy) it will make you feel more confident to read these documents in your own language.

The Notaire
The buyer is free to choose his/her own notaire (notary public). No property sale can go ahead without one. They verify all the important details such as the full names of the vendor and buyers, places and dates of birth, the vendor’s legal right to sell the property, that there are no outstanding mortgages or loans on the property, identification of the property, etc. Although the role of the notaire is a legal one, they are not independent, but are, like judges, appointed by the government. Their role is basically to ensure a property transaction is above board and to collect taxes payable to the State.

To become a notaire takes seven years of professional training in property, tax, family, corporate and commercial law. There are 7,800 notaires in France working in 4,600 practices. It is normally the buyer’s duty to pay all the frais de notaire (notaire’s fees) in the transaction. In the event of dealing with a notaire acting as agent immobilier, we suggest you choose your own notaire.

The vendor may often have his/her own notaire, but this will not increase the total fees. In such cases they are split between the two notaires.

The Compromis de Vente
After you’ve made an offer on a property and it’s been accepted, a preliminary contract, called le compromis de vente is drawn up.

This documents commits the vendor and the buyer to the transaction at the stated price, governs the time-table, the checks to be made on the property, etc, subject to a number of conditions suspensives (opt-out clauses) and a seven-day cooling off period.

The compromis is signed by both the vendor and the buyer, which can be signed either at the estate agent’s or notaire’s office - or even by post. You will then be required to place a deposit of 10% of the property price (usually 10% of the overall price - or 5% or less for new buildings) as this guarantees your commitment to purchase the property. The deposit can be paid to the agent or notaire as long as they place it in a separate client account, blocked until after the conveyancing and have insurance for it. For peace of mind we suggest you pay it directly to the notaire. Never pay any money direct to the vendor. Once the compromis is signed, the property is taken off the market.

Some estate agents will try to have the compromis drawn up on the same day your offer is accepted and although the excitement of owning your own home in France is exciting, there are a couple of precausions you might want to consider before signing it.

Conditions Suspensives
This includes a visit to the local Mairie (Town Hall) and a chat to the cadastral department - as well as arranging a structural analysis of your new property.

This should be carried out prior to the end of the cooling off period. It is rare to have the benefit of a full structural survey in France so the independent point of view given by an architect can be invaluable in some cases.

The Cadastral Plan
The Town Hall holds the cadastral plan of every plot of land in the area. As the land you are buying has a reference number attached to it it will be easy to verify exactly what you’re buying.

This is also a good time to check on any planning applications close to your new property, future town planning that may eat into your land, or the advent of unwanted New-Age travellers on spare land around you.

You have the right to decline signing the compromis de vente if you find anything in the cadastral plan that might devalue the “yet-to-be-yours” property. You also have the right to decline purchasing the property without having to give the reasons for your change of heart.

After the seven day cooling-off period ends, the deposit is only refundable should one of the conditions suspensives not be fulfilled for a reason beyond the buyer’s control. An important opt-out clause concerns the inability of the purchaser to arrange a mortgage.

The purchaser has a minimum of one month from the date of signing the preliminary contract to obain a loan. If the loan application is refused, then on production of evidence from the French bank, the purchaser will be released from his/her obligation to buy and the deposit will be returned.

Your new home will also be subject to a thorough report into termites and asbestos and if duly found can also be entered as a clauses suspensives rule.

The Deed of Sale
There is usually a minimum delay of at least two months after the compromis de vente has been signed and before the Deed of Sale is signed in the notaire’s office. Called the acte authentique de vente, this document must be prepared by a French notaire, whose fees and costs (in the order of about 7%) must be paid. These include the transfer duties which currently amount to 4.9% of the price.

If you are unable to visit the notaire’s office to sign the acte, you can give Power of Attorney to someone else; the formalities of which must be completed well in advance of the signing date. After the acte has been signed it goes to the local land registry for registration and payment of transfer duties. It’s then sent back to the notaire who holds it permanently in his files. You normally receive a certified copy of it three months after signing the acte.

Mortgages
Should you take out a mortgage in France - or obtain a second mortgage on your present home? If you’re unsure what the best course of action should be, talking to your own bank - or one of the banks or legal advisors listed on the right - will surely help you take the right decision.

We live and work in France and therefore have a French bank account established so it seemed only natural for us to obtain a mortgage through them. We found it a very straight-forward exercise and the necessary papers where drawn up quickly. For insurance purposes a blood test and a complete medical check up were called for and these where easily dealt with too.

A mortgage of 80% of the purchase price is normal for people living outside of France. For those living and working in France, the rate is higher: 90%. The mortgage is secured on the property.

In France you are not allowed to use more than 33% of your net monthly income to service any loan - and that includes monthly credit cards, outstanding car loans, maintenance payments, etc. French mortgages can be repayment, with variable, fixed or capped interest rates, with the maximum term generally being 20 years or up to the age of 70 (whichever is first).

Fixed-rate Mortgages
Fixed-rate mortgages can be for the term of the mortgage but may incur penalties during the first few years if you wish to reduce your mortgage by paying a lump sum - or paying it off completely. With variable-rate mortgages you are free to pay back as much as you want at any time without incurring any penalties.

Re-mortgages and equity release have been something of a rarity in France although it must be said that Abbey National does offer this service. You may want to speak to them if you’re planning on doing any building work on your newly acquired property in a few years time. You will need to undergo a blood test and heart examination and provide all the normal documents (salary slips, bank statements, etc) as you would when obtaining a mortgage.

Needless to say, the more people you talk to, and the more research you carry out, the better informed you’ll be. But we hope that in some way, our guide-lines, website’s and estate agents listing will help start you off on the right foot. Things are never written in stone and so we will be returning to our article with updates and revisions as we learn of them.

Happy Hunting!

Note:

After this article was published, we heard of another interesting method of buying property in France.

The Leaseback System is a scheme unique to France which enables you to afford your dream home and to cover a lot or all of the mortgage repayments. You will receive a guaranteed rental income, averaging between 3 to 6%, from a large holiday company, who will rent out your property for 9 years, sometimes more. At the end of the agreed period, you get your property back, good as new, having received 9 years of rent, and with 9 years capital appreciation. The other main advantage of this scheme is that when you originally buy your property, you don't have to pay VAT, which represents a 19.6% saving!

The French government was originally worried about the lack of house buying and tourism in certain areas of France and introduced the leaseback scheme to rectify the situation. This is why a lot of leaseback developments were in the less popular areas of France for tourism, like Normandy and Paris, but the scheme has spread and is now available on the Riviera, although developments do sell out extremely quickly, due to the good value they represent for the long term investor.

Each apartment or villa brought in this way gives the buyers certain weeks of the year when they can use it themselves for no cost. Each development has its own idea of high and low season and you must get agreement on this at the start. Also you must make sure you are going to get vacant possession of your property at the end of the 9 year period.

As the owner of the property, you are entitled to sell it at any time during the leaseback period but because you would be selling with the residue of the lease term, this would be reflected in the selling price. Also a proportion of the VAT discount you received when you purchased the property would have to be refunded ( 1/20th for every year before 20 years have expired).

While all the utility bills are the responsibility of the management company, the “taxe foncière” is still your responsibility as the owner. The upkeep and general maintenance of your apartment is the responsibility of the management company too and they have to return your property at the end of the 9 years in perfect order.