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Step-by-step Guide to Buying a House
Finding your house
The process of buying a property in France usually takes about three months from when you decide that you have found just the right house, to actually moving in.
I suggest that you first select half a dozen or so ‘possibles’ from agents sites to help to define your requirements. You should allow plenty of time to visit the houses, make follow-up visits to any that catch your eye, and, importantly to see the area so that you are sure that this is where you wish to be. As a rough guideline, we reckon that for every six properties you want to see, allow two full days.
What about a survey?
Given that there is no exact equivalent creature as a SURVEYOR in France, most people take on a property 'as seen' – and this is what you sign for in the completion contract – without recourse to a survey. Most people, in a similar way, accept that old properties do not have, for example, damp courses.
Others seek the advice of a builder who will, perhaps, subsequently do work on the property and in that circumstance one would not expect a charge to be made. At the same time, one would not expect such a builder to accept liability for his pronouncements.
Those who are being very cautious may be advised to consult an 'expert en techniques de bâtiment' although increasingly such people deal mainly with inspections for lead and asbestos. Or you can hire an architect and, in order to get through the planning process, you will have to use an architect if you are doing renovations which involve over 170m² of buildings. With either of these you should get an estimate ( “ devis” ) before committing yourself.
Apart from the lead and asbestos surveys, and in some instances a termite survery, depending on the area, from January 1 2011 all properties for sale, apart from ruins, must have an energy efficiency ranking displayed by the vendor, a DPE (Diagnostic Performance Energétique), supplied by an approved professional.
How Easy is it to get a French loan?
Interest rates in France are quite attractive. The conditions for a loan will vary but, in general terms, banks in France are more conservative than UK finance houses.
Usually there is no valuation carried out on the property as banks are more interested in your ability to pay back the loan than on the value of the property. You need to establish proof of income and UK documentation ( salary slips, P60s, bank statements ) is accepted. Normally, the amount of the loan cannot exceed 80% of the net purchase price. The term of the loan will be shorter than you can get in the UK and the standard is 15 years maximum. Your monthly repayment cannot exceed one third of your disposable income – payments on a UK mortgage, credit agreements and so on are deducted from your net income. It is wise to remember that as you will be servicing the loan from UK sources, you will be at the mercy of prevailing exchange rates.
Typically, those who seek a French 'prêt immobilier' ( property loan ) include people who are awaiting the sale of a UK property, people who fall for a place which is just beyond their budget or people who wish to keep their funds available for renovation work.
Starting the ball rolling
When you have found a house that you would like to buy, a Compromis de Vente is drawn up for you and the vendors to sign. This is legally binding except that you have a 7-day period during which you can withdraw without penalty. This document may need ‘get out clauses’ which will protect you if you can’t follow through to completion (these will, of course, have to be agreed by the vendor). The most common clause usually relates to being successful in securing a French bank loan or a mortgage if you need one. The Compromis also includes a completion date which is expressed as ‘not later than’ and this is agreed to suit everyone. You get inspection reports for lead and asbestos presence in the property (required under French law before you sign) and if these are not good, you may decide not to proceed with the purchase.
Once the 7-day cooling off period is over, you transfer 10% of the purchase price, as a deposit, to the account of the Notaire (solicitor) responsible for completing the sale. It is usual in France for the same Notaire to act for both parties.
The work of the Notaire and the Agent
In the three months or so between signing the Compromis and completion, both the Notaire and the agent will be working on your behalf. The Notaire does all the searches which include possible planning applications which may affect your house. Where substantial amounts of land are involved, the Notaire is obliged to consult SAFER – an official organisation charged with ensuring that next door farmers do not wish to exercise their right of pre-emptive purchase. The agent negotiates on your behalf with the Notaire what you wish to do with respect to inheritance matters. This is an important issue since French law is quite rigid in favour of children of your present or previous marriages. There are well-tried ways for couples to protect each other and we simply need to ensure that the Notaire includes the appropriate clauses in the completion document.
You will need to prepare for your completion by opening a bank account, setting up house insurance, and setting up the transfer of utilities to your name. Your agent needs to be on hand to answer any questions which might occur.
You should transfer the balance of funds to the Notaire about ten days before the date set for completion. You will be given a statement of account in plenty of time to do this.
This consists of all parties gathering in the Notaire’s office to sign the Acte Authentique. The Notaire runs through the document to check that all the details are correct – and in so doing everybody’s personal details are revealed to everyone else! All parties sign or initial each page of the documentation. You are given an Attestation which shows you are legal owners pending the arrival of the deeds in three or so months’ time. You are now the owners of your new house in Burgundy and there are handshakes and kisses all round to confirm it!