Process of buying a French property which is for sale
In France the purchase of a French property is a regulated process. The
laws relevant to the purchase of a French property, depend to some extent,
on the type of property you buy. For example, a vineyard or farm is subject
to different procedures and costs. Should the French property have more
than 1 hectare the procedure is basically the same as detailed below,
except that there might be intervention by the Société d'Amenagément
Foncier et d'Establissement Rural (SAFER) which has an automatic right
of pre-emption in order to preserve land which it feels should either
continue or remain in agricultural use. SAFER rarely exercises this right,
but the notaire (roughly the equivalent of a solicitor/lawyer) is under
an obligation to notify the SAFER to give it the opportunity to object
to the sale. Should SAFER object to the sale any agreement is null and
void and you can recover the deposit paid on 'exchange'. On the assumption
that you are buying a French property with 1 hectare (2.47 acres) of land
or less then the procedure is as set out below.
Legal process for buying a French property
The legal side for buying a French property falls into two parts, the
preliminary contract (Compromis de Vente or Sous-Seing Privé)
and the completion contract (Acte de Vente).
Stage 1: Preliminary Contract (Compromis de Vente or Sous-Seing
Once a price has been agreed with the vendor both parties will sign a
preliminary contract, which is legally binding for both vendor and purchaser.
The preliminary contract is called a Sous-Seing Privé if
it is prepared by a French estate agent, or a called a Compromis de
Vente if it is prepared by the French notaire. The purchaser typically
pays a deposit of 5% to 10% of the purchase price. This deposit remains
'blocked' in a special account at the notaire's office until such time
as completion takes place or the purchase is aborted. At this stage the
property is taken off the market.
Note: There are other kinds of less familiar contract
such as the Promesse de Vente where the contract is not binding
on both parties to the same extent as the Compromis de Vente. By
signing it the vendors still commit themselves to selling the property
to the purchasers, but this commitment takes the form of promising not
to sell it to anyone else within a stated period, usually three months.
A deposit of between 5% and 10% is again paid. There also exist other
forms of preliminary contract such as the offre de vente, offre
d'achat and an exchange de lettres - none of which are recommended
in preference to the Compromis de Vente or the Promesse de Vente.
Surveys of the condition of the property you intend to purchase by professional
surveyors or 'experts' are unusual in France. It is more usual to request
local artisans to give an opinion as to the condition of say the roof,
or the walls and for them to give quotations for the work. French buyers
would be more likely to approach an architect or 'expert' but even then
it is unusual for them to be asked to prepare a detailed report as has
become 'de rigeur' in certain European countries. It is advisable to carry
all this investigative work before signing the Compromis de Vente
as once this agreement has been reached, it is legally binding on both
Once the Compromis de Vente or Sous-Seing Privé
has been signed there follows a period of generally 6 - 8 weeks in which
the searches are carried out to ensure that the property is not subject
to any imminent environmental changes and during which time the purchaser
will be required to resolve the financing of the purchase. These searches
and the other contractual matters are carried out by the notaire. The
notaire is unlike most European Solicitors/Lawyers as they are not appointed
to act for either party in the transaction but as a public official whose
duty is to the State. The function of the notaire is to ensure that the
transaction is carried out legally and accurately and in accordance with
the proper processes and to give the transaction absolute validity that
cannot be contested. Accordingly, it is unnecessary to appoint a second
notaire to act for yourselves, although you may feel more 'comfortable'
having your own notaire or perhaps European Lawyer to explain some of
the points that arise which may be unclear as it unusual for notaire to
If the purchaser intends to take out a mortgage then it is necessary
for this to be declared at the time of the agreement and a substantive
clause in the Compromis de Vente protects the purchaser's interests
in the event that a mortgage is not made available. In this event, the
sale does not proceed and the deposit is returned. In the event of the
discovery of a 'planned nuisance' through the searches, the buyer can
withdraw and the deposit is returned. Should, however, the purchaser break
the contract, the deposit is paid to the vendor as an indemnity - conversely,
should the vendor break the contract, the deposit is returned to the purchaser.
Stage 2: Final Contract (Acte de Vente)
At the end of the 6 - 8 week search period, which can be extended at
the agreement of both parties, the final contract, the Acte de Vente
is signed at the notaire's office and the property passes to the purchaser.
The purchaser must pay the balance of the purchase price (purchase price
minus the deposit) plus all fees to the notaire, who then pays the vendor.
It should be noted that the balance must be in the notaire's possession
before the Acte de Vente contract is signed. The Acte de Vente
is the equivalent to the Deeds of the property. From the signing of the
Acte de Vente contract the purchaser is responsible for the insurance
of all the buildings on the property. It will also be necessary to provide
to the notaire before completion a copy of your birth certificate translated
into French and, if applicable, a copy of a Marriage Certificate also
Early advice should be sought in order to understand fully the complexities
of French succession law which does not allow you to leave your share
of the property to whom you wish - even if you have an existing Will.
There are ways of circumnavigating these laws but if you wish to leave
this French property to your heirs or other people, then it will be necessary
for you to take action before the purchase is completed.
Costs related to the purchase of a French property
The purchaser of a French property is always liable to pay the provisional
fees and sometimes liable to also pay the negotiation fees.
Provisional fees for the act of buying (provision pour frais d'acte
The purchaser pays the legal fees (between 3% - 4%)
and transfer taxes (4.86%) which amount to approximately 8% of the purchase
price, plus any geometrist's costs that might have been incurred such
as establishing boundaries, repositioning boundaries and preparing plans
for the Acte de Vente. These fees are paid to the notaire on
the day of signature of the Acte de Vente and are paid as an
'all encompassing' sum together with the balance of the purchase price.
These fees in French are called the "Provision pour frais d'acte
d'achat", which means provisional fees for the act of buying. These
provisional fees are documented in the initial contract and include an
estimate to the registration taxes which get paid to the government.
Note: A few months after the property has been purchased
and the sale of the french property has been lodged with the French government,
and exact amount of registration tax will be calculated by the French
tax authorities. Depending on the initial estimate (if it was over estimated
or under estimated) will depend on whether the purchaser will receive
or pay a small sum of money.
If you take out a French mortgage a further cost will be passed on to
you by your notaire for registering the charge of the lender with the
Negotiation fees (honoraires des négociation)
The vendor usually pays the agency's commission fees, known in French
as the honoraires des négociation (fees of negotiation). Under
certain exceptional circumstances these negotiation fees are paid by the
purchaser, but if this is the case this should be agreed in advance and
included within the Mandat, the official instruction from the Vendor to
the Agent, and made known to the purchaser at the outset. Typically, the
purchaser will pay these negotiation fees with lower value properties
(i.e. less than €50,000). These provisional fees are documented in
the initial contract and are usually around 8% of the purchase price.
Example breakdown of costs related to buying a French property
The following table shows a typical total cost breakdown of purchasing
a French property for €100,000.
||Cost if liable for agent fees
||Cost if not liable for agent fees
|Purchase tax (4.89%)
|Notaires fees (between 3% and 4%)
|Estate agency fee (8%)
Differences between buying new and old French properties
Due to the high demand for new French property, most purchasers buy properties
"from spec" from French property developers. This means that
the purchaser will buy new French properties from the plans, and select
which property they want within a particular development. Typically, purchasers
who buy a new property have to make regular installments during key stages
of the property development (opposed to paying for the property when it
is complete), and an initial deposit of 5% to 10%. The initial deposit
and regular installments vary from one French property developer to the
other. The notary fees associated with buying a new property in France
is typically less (approximately 3% - 4%) than the notary fees associated
with buying an old property in France (approximately 8%).
Note: If you have to make regular stage payments to
the French property developer you should ensure that you receive bank
guaranties for each payment. These bank guaranties protect you in the
unlikely event that the French property developer has financial difficulties
before the property is transferred to your name.