How to buy an existing property?
Buying an existing French Property - The Legal Process
The legal process of buying property in France takes effect in two stages:
1. The Preliminary Sales Agreement (Compromis de Vente)
When purchasing an existing property, signing the "Compromis de Vente" or "Preliminary Sales Agreement" binds both buyer and seller to conclude the transaction in the form of a final deed of purchase within a specific time frame. The contract is drawn up by a French notaire or estate agent. On signing, the buyer is usually asked to pay a deposit of 10% of the agreed purchase price. The deposit is paid into a blocked account at the notaire's office. Should the buyer reneague on the agreement his deposit may be forfeited. On the other hand, should the seller withdraw, he may have to pay a penalty fee to the prospective buyer. However, should the agreement not be honoured for reasons beyond the buyer's control, the deposit will be refunded.
The Preliminary Sales Agreement's 'cooling off period' - The buyer of a residential property has a period of seven days during which to reflect, and if desired to retract his/her offer, after having signed the Preliminary Sales Agreement. Should he/she decide to proceed, the buyer has 45 days in which to raise the finance for his/her loan from the date of the original signature of the Compromis de Vente.
2. The Final Deed (Acte de Vente)
The 'final deed' seals the transaction between the buyer and the seller. The signing of the deed by both parties must be witnessed by the notaire in France.
Before the notary presents the deed of sale for signature, he ensures that all legal work has been completed, and that the buyer has indeed been granted a mortgage, along with life insurance for security on the loan. Once the date for the definitive deed has been fixed, the notary will collect all funds to cover the transaction price, along with his professional fees and any other related costs.