Finding right property

You may have already decided on a specific area or you may have a French region in mind, having been there on holiday for example. Finding a property in France is a similar process to that in other countries. There are many estate agents in France (agents immobiliers) who will put you in touch with people selling property. Alternatively, there are estate agents in UK, for example, who have details on French properties. There are also many specialist magazines available for people interested in French way of life. These publications offer useful contacts and property advertisements.

Many home buyers are attracted by fact that property prices in France appear to be lower than abroad. There are reasons for this and before you start you should be aware of following points:

• French domestic property is not usually bought as an investment. Apart from some very fashionable or highly sought after areas, prices usually rise in line with inflation. Therefore, you would need to own a home for at least three years to recover high fees associated with buying, even before considering maintenance or improvement costs. • France has a similar population to UK but is three times size. There is therefore less pressure on land and hence lower prices. • That isolated farm cottage set between vineyards and a stream may require major renovation. It might not have same appeal to a French family, hence lower price and you should consider possible difficulties of resale in years to come.

Initial agreement to purchase a property

Having found a suitable property, you will negotiate and enter into an initial agreement with vendor. This agreement is called a ‘Compromis de Vente’ or ‘Contrat de réservation’ and is a binding contract between buyer and seller which sets out terms and price of sale.

For new properties being built most common contract is a ‘contract de reservation’ (a reservation contract). There are various other contracts such as a promise to purchase (promesse d’achat), an exchange of letters (l’échange de lettres) and an offer of sale (l’offre de vente), all of which offer little protection to buyer, and generally should be avoided. The preliminary contract will include a full description of property, latest date by which completion must take place, price, any escape clauses and identity of both vendor and purchaser. The preliminary contract can be signed either at notaire’s office or at estate agency.

If you are making a purchase with a mortgage, you should at least instruct notaire/estate agent to make your purchase conditional upon obtaining a mortgage: ‘conditions suspensives’. This will offer you further protection under French Consumer Law. Upon signing this preliminary agreement purchaser has to place a deposit with notaire, which is normally 10% of purchase price and will be deducted from sale price. The property is then taken off market. It is better to think of this deposit as a payment on account or a penalty for breaking contract. Having said this, a law passed on 1 June 2000 does grant you a seven-day cooling off period during which time you can withdraw from agreement. * Stamp Duty and registration fees will need to be paid at completion when agreement will be filed at notaire’s office. As a guideline, notaire’s fees, Stamp Duty and Registration fees will add up to around 6% to 8% of purchase price for existing properties. For new properties they will amount to around 2% to 4% of purchase price. As French tax and succession regimes are different from many other countries, to ensure tax efficiency and problem free transfers on death you may wish to consider instructing a solicitor based in your home country to advise you.

By law, purchaser can insert clauses into agreement. The seller, of course, has to agree to these.