French Mortgages - The Mortgage Purchase Process
This section is designed to help you understand the key stages of the French House Purchase Process and assumes you are purchasing a second-hand property which is more than 5 years old - otherwise, different purchasing procedures may apply. There is also some brief guidance about the costs associated with buying in France, together with some related topics.

This section of our site is only a brief guide to the process and should not be viewed as a substitute for Legal advice, of course. You can find a selection of UK lawyer / solicitor contacts on our Links page - who will be able to provide you with individual legal advice, taking into account your own specific circumstances, aims and objectives. Please enquire with the firms listed to establish the cost and scope of their own legal services.

The French House Purchase Process

The process of buying in France is divided into two key stages: firstly, the "Compromis de Vente" and, secondly, the "Acte de Vente".

Stage 1 - "Compromis de Vente".

When you have found a property to buy and have agreed the price with the owner, you will be asked to pay a 10% deposit and enter into the "Compromis de Vente" - or Preliminary Sales Contract. Please note that from 1st June 2001, you then have 7 days in which you can back out of the agreement without giving any reason. 

Thereafter, only matters relating to suspensive clauses allow withdrawal from this  contract. Previously (prior to 1/6/2001), there was no 7 day withdraw facility on any Compromis de Vente contracts drawn up.

This Compromis can be drawn up by either a licensed French Estate Agent or by a "Notaire" (the French State Official, who oversees all house purchase transactions). In France, especially in rural areas, Notaire's sometimes also act as Estate Agents and, in some areas, there may be only one Notaire (who therefore has a monopoly in that particular area). It is perfectly feasible to appoint your own Notaire: please see our Links page for details of our retained English speaking Notaire

Upon you then paying the (usual) 10% deposit and both you and the owners signing the Preliminary Sales Contract, the property is then effectively "taken off the market", whilst you work towards completing the purchase. 

You can actually sign this initial Sales Contract in the UK, if required...you do not have to sign it in France - whatever anyone may tell you! However, you should bear in mind that the contract is not binding (subject to the new 7 day cooling off period referred to above) until it has been signed by both purchaser and vendor. If you delay signing it, you might lose the property - i.e.  if you are in competition with other buyers.

The French Notaire ensures that:-

• the sale is conducted legally, in accordance with French Law. 
• that the title to the property is authentic. 
• the Contract represents the agreement reached between the buyer(s) and the seller(s) of the property.

The Notaire is not the buyers' or sellers' solicitor in the normal sense - most Notaries will refuse to give any "advice", as this is not seen as their role. 

If you wish to have legal advice you need to appoint a bilingual solicitor who specialises in French property transactions. The solicitor and their fees would be in addition to the Notaire fees for acting, not as an "alternative". 

Stage 2 - "Acte de Vente"

Normally, and typically around 12 weeks after the Preliminary Sales Contract has been signed (and after various formalities have been completed), you will then be asked to sign the "Acte de Vente" (Final Act/Deed of Sale). This is always prepared by a Notaire.

Lets look at these two stages again, in some more detail:-

The Preliminary Contract - "Compromis de Vente"

This is a binding initial written agreement between you and the seller, in which you agree to buy the property and the seller agrees to sell to you. At this stage, you will normally be asked for a 10% deposit,  (which will be held safely in a special account) pending completion of the purchase.

It is quite normal to have various "conditions" inserted into Preliminary Sales Contract. These are normally called "Conditions suspensive". For example, if you will need a mortgage arranging to buy the property, you will need to ensure there was a "condition suspensive" entered to this effect into the Contract. It will need to specify the lender, the mortgage amount, term and interest rate involved. If you were unable to obtain the specified mortgage, you could then withdraw from the Contract (upon providing suitable proof from the lender mentioned in the Preliminary Sales Contract) and have your deposit returned.

The other common conditions inserted into the Preliminary Sales Contract relate to planning matters, rights of way, etc.

The Preliminary Sales Contract always sets out the following:-

1. Description and "definition" of the property being sold

2. The confirmation of the seller's title (ownership) of the property

3. Anticipated date for completion of the "Acte de Vente"

4. The price, the fees and the method of payment

The Compromis de Vente is effectively a binding contract unless something is revealed by searches or planning permission (if required) is not forthcoming etc. Note: the binding nature of the Compromis applies once the new 7 day cooling offer period as been passed.

Deed of Sale - "Acte de Vente"

This is effectively a Title Deed, showing legally who is the owner and containing a definitive description of the property, its boundaries etc.

The "Acte de Vente" is always drafted by a Notaire - even if the "Compromis de Vente" was drawn up by an Estate Agent. You must sign this "in person" in France (or else it must be signed by a person attending the Notaire's Office with a valid proxy to sign on your behalf).

After the Preliminary Sales Contract ("Compromis de Vente") has been signed, the Notaire will then be make the following checks prior to drafting up the Deed of Sale ("Acte de Vente"):-

1. That the property being sold matches the Land Registry records

2. The identity of both buyer and seller (proof will be required)

3. That the seller actually owns the property

4. If there is any adverse planning matters affecting the property

5. If any existing mortgage can be repaid, in full, from the sale proceeds

Fees and Taxes relating to sales

Estate Agents:-

If you buy via an Estate Agent, you will normally find their fee is included within the property price. Estate Agents' fees (in France) are higher than would normally be the case in the UK. Where Estate Agents' fees are included in the purchase price, you should remember that you cannot, normally, borrow against the fees if you are seeking a high mortgage in relation to the purchase price.

Legal Fees:-

Usually, for property more than 5 years old, these will often amount to around 10% of the purchase price at the lower price ranges or perhaps 8% further up the price range - within this rough guideline you have various items such as the Notaire's fee, Land Registry charges, Local and Regional taxes, VAT (i.e. French TVA) etc. Please note the we have access to a Notaire fee calculator, and can always indicated or check the fees quoted, although we must stress it is up to the Notaire (s) concerned to confirm what the fees will be in your own case, as they are the ones actually charging them, of course.

You should note that completely different costs are involved with a property built in the last 5 years.

How do I get the money over to France ?

For smaller amounts, the best way is often via a French Bank account you have already set up before needing it ! You'll need one, in any event, to pay for the various expenses of ownership once you own the property. For larger amounts, you might wish to use a exchange broker, such as the ones listed on our links page.

Ownership of the property, inheritance laws etc

You need to be aware that in France the rules governing what happens to a deceased person's assets are very different to those in the UK - as are the rules on income taxes, and various other types of direct taxation.

There are various different ways in which Ownership of property assets can be held in France, including an option to hold the property in the form of  shares in a special type of "company" arrangement.

This is a quite complicated topic, where you should obtain proper legal advice before you sign any paperwork. We would normally recommend clients instruct a bi-lingual UK solicitor, well versed in French house purchase. It could be a false economy not to do so. Details of various firms of solicitors, experienced in this type of work, are provided on our Links page.

Statutory Warnings: Your home is at risk if you do not keep up repayments on a mortgage or other loan secured upon it.
The Sterling equivalent of your liability under a foreign currency mortgage may be increased by exchange rate movements.
A Life Insurance policy will be required for each mortgage borrower.
All mortgages are subject to Status and are not available to those under age 18 years. Written details upon request.