Property Buying Guide France

The Shelter Offshore comprehensive guide to buying a property in France for those who dream of owning French real estate

With concerns about the carbon footprint we’re all creating and worries about fuel costs and increasing travel surcharges, many people are considering looking a little closer to home when it comes to buying a second home or investment property abroad, and indeed, when it comes to considering vacation destinations as well.  As a result of this fact, France is receiving something of a reawakening of international interest in its property market.

Added to these salient points is the fact that the new French President Nicolas Sarkozy mentioned in the lead up to his election that as part of his policies for change in the nation, he wanted to encourage and enable French citizens to become homeowners.  So there is strong investment potential in the French property market at the moment, which is why we decided to publish a property buying guide to France so that those who are interested in the market can quickly and easily access the comprehensive information they need to make a safe purchase.

The very first thing to mention is – fees!

The fees and taxes involved in the French property buying process can be astronomically high with figures to consider such as up to 10% in estate agency fees, over 19% in VAT and then having to pay for surveys, notaires, an independent solicitor and so on and so forth.

So, step one: - have a fixed idea of your budget in mind and stick to it…and to do so you need to ask your estate agent up front about all fees – more about this in a moment.

In terms of fixing a budget that is both realistic for the area of France and the property type you are interested in and also realistic for you in terms of getting a mortgage up to the value and/or affording repayments, you need to look not only at your finances and discuss getting a mortgage agreed in principal with a lender such as Barclays Bank who offer favourable terms on French mortgages, but you need to take a good look at the property market in France as well to see what average prices look like in your preferred location at the moment.

With a budget then in mind you can begin looking for a French property to buy. 

When you begin approaching estate agents there are a number of factors to consider.  The first is that they are a professional set up and registered with official bodies such as FNAIM, SNPI or UNPI.  The second is that any properties they show you are given to you with the all-inclusive price displayed – i.e., this is the price that includes their fees and sometimes even the notaire fees and VAT as well.  Ask every time you get details from a new agent about what the displayed price includes in the way of fees so you can ensure you are not going to exceed your budget!  Estate agents in the most popular areas of France with British buyers are totally used to this request and usually display prices for properties followed by the letters FAI which indicate that this is the purchase price AND the estate agent’s commission added together.

If you have to add on the notaire’s fees you need to budget for between 2.5 and 8% on top – additionally you have to add on 19.6% for VAT.

Having identified a property that you would like to buy you can make an offer with your estate agent usually able to tell you how low you can offer without upsetting the vendor!  Remember, before you do make an offer double check what the price includes in the way of fees and what you will have to find on top and also see plans and boundaries and discuss drawing up your ‘clauses suspensives.’ This is basically a legal document detailing the reasons you are allowed to cite if you have to withdraw from the sale, which include factors such as you not getting the mortgage you expected, planning permission not being granted for essential work to the property or perhaps something bad being found if you elect to have a survey done.

With the offer submitted by the estate agent you wait and see if it is accepted.  If it is you will need to submit documents such as details of your loan, copies of your passport etc., to the agent who will pass required data to the noitaire who manages the sale for both the buyer and the seller.  This is an unusual practice in the UK where we have an independent solicitor for each party – if you want to have your own notaire you can, and you don’t pay double the fees as the notaires have to split the money between them.  Alternatively you can appoint a solicitor to act as your adviser, but they cannot get involved in the sale directly as only notaires have the legal authority to do so.

The next stage is the signing of the compromis which is the first contract – this is legally binding on the vendor immediately but as a buyer you have a 7 day cooling off period – regardless of this, you should never sign the compromis unless you are 100% certain that you are ready to go ahead.  Once your 7 days are up you must make payment of your deposit which is usually 10% of the purchase price.  This is non-refundable from this point forward unless you withdraw from the sale as a result of a clause in your clauses suspensives document.

Reports and surveys are now carried out – it is usually for the buyer to meet the cost of the majority of these unless they are obligatory for the area of France in which you are buying and then the vendor pays…if in doubt, ask up front.

Once all has been found to be in order with the property the sale can proceed to signing the final contract.  You need to ensure the balance for the property is with the notaire by the date of final signing otherwise the whole sale could collapse and you lose not only your dream property in France, but your 10% deposit as well.  Before you go and sign the contract on the day the signature is due you need to view the property as the final signature rests beside a statement that says the property is being sold as seen.  A lot can happen to a property between the day you view it and the day you sign the final contract – so do view it before you finally sign for it!

Following signature all final fees and taxes become payable and the property is also registered in your name and you become the proud owner of a home in France.