The Compromis de Vente by Craig McGinty
IF you have found a property that fits the bill the next few steps are vitally important.
Agreeing a purchase price will be your first move and don't go down the path of dodging tax by under-declaring the figure.
Although the French love nothing more than a bit of tax evasion if the authorities find out you face a hefty fine and even a prison term.
But also make sure the price agreed is the price that appears on the contract, more on this later.
Be sure that the price you are paying is the current market value and be clear exactly what you are getting for your money, are fixtures and fittings included?
Also does the price include the estate agent's commission, if it does then push them to see if they will cut their rate to ensure the sale goes through?
Once you are happy with the price for your property then the initial contract, the Compromis de Vente, is drawn up.
The estate agent or the notaire can prepare this, but the estate agent's version must satisfy the notaire's requirements.
By this point you should have appointed the services of an English-speaking lawyer with experience of the French property process.
It is important, as there are many different terms and rules that have to be adhered to, and if you don't have the experience problems may arise.
It is also at this point that the purchaser must pay a deposit of approximately 10 per cent of the purchase price. On new build property it can be 5%.
The amount can be negotiated and often the vendor will agree to a time delay if the deposit is coming from abroad.
The payment is usually made to the notaire, occasionally the estate agent who must be bonded, via bank-to-bank transfer.
The deposit will only be refunded if strict conditions are met, so if you do withdraw you will lose the money.
Make sure you know the exact terms of the return or forfeiture of your deposit.
Also it will be possible to get an idea of the fees and other costs involved with the purchase.
This will give you an idea of the amount you will need to transfer between bank accounts upon completion of the sale.
The Compromis de Vente must contain standard items, which include:
The price agreed which must be declared as the true market value for the property, giving the tax authorities a figure to check if required.
As well as details of purchaser and seller, a receipt for any deposit paid and a possible date for completion.
It is also at this point that clauses suspensives can be agreed upon, which aim to protect both sides should problems arise.
These clauses can include the completion of building work, the approval of planning permissions or a mortgage.
The agreement should also give you an idea of a possible completion date, but this is very flexible as the notaire will have to undertake searches on the property, which may take some time.
As you can see the range of detail and information the Compromis de Vente contains can be wide ranging, which is why using a lawyer may save you much heartache.
A very useful feature of the French purchase process is the seven-day cooling off period.
The time runs from when you receive your signed copy of the Compromis and allows you to back out from the sale without penalty.
Once the seven days are over, the rest of the sale will take approximately three months to complete.
It's worth keeping in touch with the estate agent and notaire so you are up to date with the progress of the sale and have a better idea of a completion date
For more articles by Craig McGinty on living in France check out his website, http://www.thisfrenchlife.com