Asking prices may be negotiable, but it is only once negotiations are underway that the Agents will reveal if previous offers have been refused, giving you an indication of what the Vendor might find acceptable.
Quoted prices include agency commission (Frais D’Agence Inclus). This is usually paid by the vendor at time of sale.
Negotiation and making the offer – Points to consider
Advise agent as soon as you have decided on the property you want to purchase.
You can ask the Agents how much the Notaire’s fee (Notary) will be on the property. They may quote ‘Net Vendeur’ (Seller’s Net Price), so it’s important to clarify breakdown of costs. Agents sometimes refer to ‘Acte en Mains’ (final sale price inclusive of Notaire’s fees and agency commission).
First offer is Offre d’Achat either through Sifex or the French Agent.
Once offer is accepted (there may be several counter offers) a compulsory Diagnostic Surver (Etude Diagnostique) is carried out at the expense of the vendor. NB: Surveys are not normally carried out in France, consequently the clause ‘subject to survey’ is unlikely to be accepted. Some surveyors (‘experts’) do exist. If you want a survey, you should try to have this done before signing the Compromis (see below). Alternatively the opinion of a registered builder can be sought.
An inventory may be produced if there is a requirement to purchase any additional items of furniture or equipment.
Compulsory Diagnostic tests
The DDT or 'Dossier de Diagnostic Téchnique', is now a part of any sale and is a prerequisite that should be carried out preferably at the time of exchange of contracts but certainly before the signature of the final 'Acte de Vente' – or completion. The surveys deal with the following subjects:
Lead: A report on the presence or otherwise of lead in paintwork in properties built before 1949, dated within 1 year of the sale.
Asbestos: This relates to properties with planning permission that predated 1.7.1997.
Termites: A report on the presence of termites or other pests which are destructive, dated within 6 months of the sale. Energy Efficiency: The DPE ‘Diagnostic de performance Energétique' indicating likely energy consumption and heating costs is valid for 10 years.
Gas Installations: A report on natural gas installation where the gas has been installed for 15 years minimum. Valid for 3 years.
Electrical Wiring: A report on the wiring and electrical supply when it is over 15 years old. Certificat de Conformité within 3 years will suffice.
Natural or Industrial Risks: Flood zone/prone to earthquakes etc. must be declared and any claims made by the vendor relating to natural disaster.
Septic Tanks: Since 2013, septic tanks needed to be inspected and to conform. A survey report dated within 3 years of the sale is required.
Buildings Insurance: It is a legal requirement that this in place on the date of the acte, whether taking over the existing policy or applying a new one.
Swimming Pool Security: If a pool is more than 1 metre below ground, the enclosure or the pool itself must be secure.
Compromis de Vente
Once the prices has been agreed, the Notaire draws up the first contract, usually a Compromis (occasionally a Promesse de Vente). This is a legally binding contract with a 7 day cooling off period when the buyer can withdraw and it is in French containing the following elements:
The identity and details of both purchaser and vendor.
A full description of the property, its surface area and the land.
The purchase price and breakdown of fees including who is to pay the fees.
Details of any fixtures and fittings to be included in the sale.
Results of the diagnostic reports, which are a legal requirement.
Details of the notaire and estate agent.
Details of financing, including the date when the mortgage offer is expected.
Any conditional clauses (clauses suspensives).
A 10% deposit is paid to the Notaire at this stage.
(If you have a conditional clause in your contract, ensure you are aware of the dates and conditions applicable, should you need to prove that you have not been offered a loan. Failure to do so may cause you to lose your deposit.)
Once the Compromis de Vente has been sold, there is a seven-day cooling off period when a buyer can withdraw. After signature of the compromis de vente, there is a seven-day cooling off period in which a buyer can withdraw. This runs from when both parties have signed the compromis de vente and received a copy. Thereafter the contract is legally binding.
Acte de Vente
In the compromis there is usually an indication of a date by which the final contract (acte de vente) must be signed. Before this can take place:
The searches have to be carried out by the local authorities and results obtained, including the release of any rights to pre-emption by the "SAFER" if applicable.
A notaire's involvement is obligatory in the transfer of property in France and their fees are strictly regulated and equate to conveyancing and stamp duty in the U.K. Only a small proportion of the overall sum is charged by the notaire himself, the balance being government taxes. It is always wise to establish at the outset what the charges are. Where a loan is involved, a fee of 1% applies for the notaire registering the mortgage with the Bureau des Hypothèques.
When the notaire has finished his searches, he contacts both parties to confirm the date and sends them a draft of the acte de vente. Although the acte resembles the compromis, there are subtle differences and of course it is vital to have this checked. You will be asked to produce your birth certificate and passport as well as marriage certificate and divorce decree if applicable. If you are unable to be there in person, you can award power of attorney (pouvoir) to a third party to act on your behalf.
It is imperative that the notaire is in receipt of funds before the signing of the acte de vente can take place and important therefore to allow enough time for the transfer of currency. If there is a mortgage, the buyer needs to instruct the notaire to ask for the funds from the lender.
Upon signature of the acte, the notaire pays the taxes due* and settles the accounts as well as registering the sale, the deeds and the mortgage, if applicable. The notaire generally keeps the original title deed although it is possible to obtain notarised copies. A few months later the buyer receives a certificate confirming that the notaire has registered the title.
Points to consider
Taxes (two annual property taxes apply in France)
Taxe foncière is charged every autumn and is levied on buildings and land.
Taxe d’habitation is paid by whoever is in occupation on the 1st January.
*At the time of the acte, the taxe foncière is split pro rata between buyer and seller by the notaire. This tax is charged every Autumn.
It is sensible to use the same Notary (Notaire) as the seller as he will know the property well and could save valuable time.
Do employ the services of a bilingual lawyer to go through your compromis de vente. He can also advise you on inheritance law and tax implications, whether to create a S.C.I (Societe Civile Immobiliere) so the property is owned by a company
In view of the implications of currency fluctuations, it is worth taking advice at this stage, since the payment of both the 10% deposit and the balance of the purchase price at the acte de vente, will be in euros, as will the payment of the notaire’s fees and taxes.