The A to Z Process of Property Purchasing in France

Opening Note: This week I am exclusively writing the first few chapters and a book proposal of the first of a series of books. In lieu of the usual Parler Paris and Parler Nice Nouvellettres® based on current events, we are republishing a few of our best past issues — those that we know you enjoyed and might enjoy reading again! I am taking the liberty of editing them just a bit to bring them up to date.

THIS FRENCH PROPERTY INSIDER WAS FIRST PUBLISHED: Thursday, May 18, 2006 • Paris, France

Bonjour French Property Insider Subscriber,

Distill the details of property ownership in France and this is what you get: The Process.

This is what it takes to get from point A to point B, finally ending with Z when you are the proud and happy owner of your own “pied-à-terre,” “maison de compagne,” “château” or “manoir.”

Let’s start with A, then B, etc. and see if you can spot the pitfalls along the way. They won’t be obvious to you now, but trust me, every step of the way is booby-trapped!

A. Imagine the possibility of owning a property in France. This is step number one. If it’s not an idea, then it can never become a reality. In what kind of home do you imagine yourself? And where?

B. Determine your goals. Is the property for residence? Investment? Both? What return do you want if any?

C. Learn all you can about the process. There are dozens of books, magazines and Web sites from which to gather information. There are conferences and seminars in which to participate. There are friends who have already had the experience. Tap every resource. Buying property in France is a complicated process, so don’t think because you’ve purchased property in North America, that you know what you’re doing. You don’t…!

D. Consult with a specialist, or many specialists…consultants, attorneys, tax advisors. You simply can’t get enough advice to help you put the pieces of the puzzle together to create a neat, orderly and snug picture.

E. Determine your parameters: Where? How large? How many rooms? What floor level? What features? No renovation to be done or complete redo? What is necessary? What is not? What will fulfill your dreams? What will create nightmares?

F. Determine your budget. How much do you have in cash you can afford to invest? How much of a mortgage would you want to consider? What is today’s rate of exchange? How much does it make sense to spend to achieve your goals?

G. Determine financing. If you choose to take a mortgage, contact the lenders to find the best loan products and lenders for you. Start the loan application process and request a loan approval “in principle.”

H. Determine the structure of the purchase. Beware of inheritance and tax laws. In what name the property is registered greatly affects the future outcome of the property in the event of your death. Do not make this decision lightly and take advantage of professional advice.

I. Meet with the Notaire. This is a perfect time to set up your file with the Notaire of choice. Provide him with the proper documents and if necessary, prepare Power of Attorney so that someone else may sign documents on your behalf.

J. Perform the search. Whether you do this on your own or with a Property Consultant, reduce the search to as narrow a field as possible. This will ensure success as most properties you visit will fit the parameters you’ve determined. If on your own, visit the agencies in the areas in which you are looking and search Web sites and publications listing properties “for sale by owner.” If working with a Property Consultant, be sure the parameters are clear and don’t try to see too many properties in one day to enable a clear viewpoint on each property.

K. Decide on a property. There may be one or more that fit your needs. Weigh them carefully, but don’t buy for practical reasons…buy the property that makes you feel good! (You only live once!)

L. Make an offer, negotiate, agree. The negotiation process can be verbal or in writing, direct with the seller or through the agent or consultant. Either way, be specific. Make certain that if you expect the light bulbs to be there when you are the new owner, then make note of it in the “Promesse de Vente.” Leave nothing to the imagination of the seller!

M. Arrange the signing of the Promesse or Compromis de Vente. Provide the Notaire with the coordinates of the seller’s Notaire and all details of the purchase. Schedule the date. If you can’t be there in person, sign a Power of Attorney for someone else to sign on your behalf.

N. Make a list of all additional items that are to be part of the sale, such as appliances, furnishings, etc., which are not attached to the walls and can be considered extraneous to the apartment/home itself. Consider a value to the list, as this can be deducted from the official purchase price on the deed, reducing taxes and fees.

O. Determine the contingency clauses, should there be any. The most common are “clause suspensive” (denotes no loss of deposit should you not get financing) and “clause de substitution” (denotes ability to change ownership structure prior to signing Acte de Vente).

P. Confirm the “diagnostics” of termites, lead and asbestos. The seller is responsible for providing a report performed by a certified agency within three months prior to the signing of Acte de Vente regarding termites, lead and asbestos in the property.

Q. Provide a 10% deposit. Upon signing of the Promesse de Vente, you must provide a 10% deposit held by the Notaire. If you need to transfer the funds from a foreign account, contact a currency broker such as Moneycorp or your bank to get the best rate of exchange. You will need to know your bank account numbers and the wiring instructions to your Notaire’s escrow account, where the funds will be safe.

R. Sign the Promesse de Vente. Normally, you will do this in the Notaire’s office with all parties present, or your representative with Power of Attorney will act on your behalf. At this time, schedule the signing of Acte de Vente. Allow 11 day buyer’s remorse waiting period from the time the lender makes the official offer till the date you can sign and accept the offer.

S. Consider the 10-day buyer’s remorse period. You may cancel the purchase within 10 days of signing the Promesse de Vente with no penalties. Do not enter the purchase thinking you will cancel it, but should something serious arise to doubt the feasibility of the purchase, you have this “out.”

T. Submit mortgage applications. We recommend you apply to at least two lenders. Be prepared to amass important documents such as tax returns, bank statements, etc. and complete a medical questionnaire.

U. Schedule your medical examination, should the insurer require it. It is best to have the examination done in France, but if this is not possible, arrange to have the reports sent to the lender’s insurance company as they require them.

V. Transfer the remaining balance of funds due upon signing of the Acte de Vente. Get the accounting from your Notaire. It will include the down payment or balance of payment of the purchase price plus all taxes and fees.

W. Get estimates for renovation, decoration. If you have access to the property, this will speed up the process as the work can be scheduled to commence immediately upon signing the Acte de Vente.

X. Walk through the property just prior to signing the Acte de Vente to ensure everything is just as promised.

Y. Sign the Acte de Vente. This will take place in the Notaire’s office, again, normally with everyone present. You will leave with the keys and ownership of your new French property!

Z. In six months to one year, you will receive the official deed and a small refund from taxes and fees that may have been overpaid!

A bientôt,

Adrian Leeds
Editor, French Property Insider

Email: [email protected]

 

 
 

P.S. Plan your winter getaway for a few days in the sunny south of France and rent my bright, comfortable and luxurious Parler Nice Apartment Le Matisse. For more information visit Parler Nice Apartments or email [email protected] and stay “with” me!