Useful Information FRANCE

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Key Mortgages S.L

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The buying process in France is highly regulated providing protection for both sellers and buyers.

Prices should include agent fees and most costs are picked by the buyer. These costs include Notary 1% of purchase price, Stamp duty 0.70% of purchase price and transfer tax which will equate to approximately 7%.

Vat is also payable on properties less than 5 years old but this should be included in purchase price.

The first step in purchasing is the signing of the Compromis de Vente this is the first draft of the final contract and is legally binding it is therefore important that if a mortgage is not arranged at that point that a clause making the sale subject to mortgage funding is included or deposit monies can be lost. Every buyer has a 7 day cooling off period from signing but after this point the contract is binding. During the cooling off period the buyer can withdraw but the seller cannot.

Most buyers look for a deposit of 10% of the purchase price at this point.

Once the contract is signed the searches will take place the Notary who undertakes conveyance is responsible for this but acts for the buyer and seller so independent legal advice should still be sought. The final contract which is signed at Notary is the Acte de vente.

Most lender will provide an approval in principle without the property details but an offered will not be available until the above contract is signed this means it is important to have a get out clause in case mortgage funding is not available.

When the lender has approved the mortgage and undertaken their valuations they will make an official offer. The law requires that 10 days pass before the offer of lending can be taken up but completion needs to take place by 30 days for the offer to continue to be valid.

French banks also provide mortgages for leasebacks which are similar to Apart/hotels where the developer keeps usage of the apartment for a definitive timescale with a guaranteed rental level.
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