Buying a property in France begins with the signing of the French version of the Sales Agreement, the Compromis de Vente. This Compromis de Vente represents your right to buy a property if all conditions are met. Before this contract is drawn up and signed, Fynis International Mortgages will have assessed your mortgage possibilities. We will undertake to set up a mortgage on your behalf with the relevant French bank.You will feel secure in the knowledge that your mortgage is being handled by experienced professionals. Once negotiations with the seller are complete,and a purchase price has been agreed on, the broker will propose that you have a Compromis de Vente drawn up by a notary. The Compromis de Vente is a binding agreement for both the buyer and seller, which normally leads to the transfer of the French property.
When buying a property in France, you will always have a seven day grace period that begins when you receive a registered letter with a copy of the document signed by all parties. Within this grace period, you may abandon the sale without the need to provide an explanation.
With so many details to consider in relation to the property and purchasing it, you may decide to approach the seller and make a request for an ‘offre d’achat’ prior to drawing up the Compromis de Vente. The offre d’achat is a simple document that lays out key information about the property, the buyer, the seller, and the purchase price. An offre d’achat also defines the time period within which the Compromis de Vente is to be drawn up. This is an important clause, as putting together a Compromis de Vente is laboursome and time consuming. Once an offre d’achat has been signed, there is no risk of the seller getting into an agreement with another buyer while the Compromis de Vente is being drawn up. You can rest easy knowing that there will be no unexpected loss of the property.
The Compromis de Vente states the latest date by which the transfer of the property must take place. You will also find details regarding any down payment that is required. A down payment is never made directly to the seller, only to the notary. The financial statement included will state the purchase price, brokerage fees (global), notary fees, and any costs due to either buyer or seller. The seller must provide all relevant information to the buyer. Any costs incurred as a result of providing false information shall be borne by the seller.
The seller is obliged to provide a number of health and sanitation reports in relation to the property. These will include vital information on the presence of termites, lead paint, and asbestos. You will also receive a report on the state of gas and electrical installations, as well as the property’s drainage system, confirming that these meet the legal requirements. Unless stated otherwise in the Compromis de Vente, the seller is held responsible to repair any “anomalies” – inaccuracies – with regard to the property. It is wise to refrain from signing the Compromis de Vente until you have carefully read the contents of these reports. Otherwise, you may find yourself facing unaccounted for costs. Sometimes the bank may require that costs of financing any future improvements to the property be included in the mortgage loan. This is seen as a precautionary measure to ensure that serious property deficiencies will eventually be rectified.
French law requires that the Compromis de Vente contain a nullification condition based on the requirement of obtaining a mortgage; this is called the Condition Suspensive du Prêt. In fact, this condition is not nullifying, but suspensive. The sale can only go through if the buyer meets the financing conditions. This condition must be fulfilled before the buyer is able to buy the house. If you wish to buy a property without a mortgage, you will need to write this down, by hand, in the Compromis de Vente.
If you, as a buyer, choose to do nothing, without informing the notary, and do not follow up on the obligations that are part of the sales agreement, you are at risk of losing your deposit, which can be up to 5% of the purchase price. However, since you cannot be forced to purchase the property either, your risk is limited to the amount of the deposit.
The Compromis de Vente records the minimum mortgage that the buyer should obtain, the interest rate, the terms of the mortgage, name of mortgage provider, as well as the Condition Suspensive du Prêt. If you, the buyer, fail to obtain the mortgage by the date stated, you can apply to arrange for a deferment. This should be confirmed by the notary. In the event that you cannot obtain financing, you must report this as soon as possible to the notary. Fynis International Mortgages recommends that a time period of 60 days should be allowed to arrange financing. It is also important that the mortgage file is carefully assembled. A completed dossier will ensure a quicker acceptance from the relevant bank.