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The buying process

The buying process in France, unlike some other countries, is safe and straightforward. It is government regulated to be as buyer friendly as possible and offers prospective purchasers complete peace of mind from the time you find your dream property until the moment you get the keys. To provide you with a better understanding of the steps involved we have put together an outline of the process.

So relax, with Chez Riviera’s multilingual team and extensive local contacts, we are here to guide you every step of the way!

Buy a property in 6 steps

  1. Property search
  2. Property visits
  3. Financing
  4. Offer
  5. Preliminary sales agreement
  6. Final signing

Property search

First of all, your Chez Riviera agent will do an extensive property search for you, using our brilliant network of properties and agencies. Your agent will ask you a series of questions to define your search:

  • What is your budget?
  • What type of property are you looking for?
  • How many bedrooms?
  • Ideal size in m²?
  • What is your ideal location?
  • Would you like a residential/lively area?
  • What style of building/property would you like? Modern or typically French?
  • Which exposition would be ideal?
  • Are you happy to do any renovation work?
  • Are you looking for an investment, residential property or holiday home?
  • Do you wish to rent the property? If so, to holidaymakers or long term renters?

Property visits

Once your Chez Riviera agent has done an extensive property search and you have decided on the villas you would like to see, they will then organise and book visits for you.

Most of our international clients visit the area for 2 – 3 days which is enough time to visit several properties, put in an offer and start the process to getting your dream property!

If you see properties on other websites, do let your agent know and we can get in touch directly with other agencies and book visits for you.

Financing

In France, unless you are a cash buyer, finance is required to secure your purchase. Some buyers choose to arrange finance in their home countries, with equity release or re-mortgages, while others consider obtaining finance in France. French mortgages represent good value compared to rates in the UK and the US and are freely available to foreign buyers. Non-residents can normally expect to be able to borrow 80% of the value of the French proper-ty, rising to 85% in some cases, leaving 15% or 20% of the value to be paid by the buyer, with the duration of the loan between 7 and 25 years.

French mortgage lending requirements are based on a debt to income ratio, instead of the salary multiplier calculation used in other countries. As a general rule, total debt must not be greater than one third of your gross monthly income. French banks have recently relaxed this rule allowing borrowers more flexibility.
Under French law, the ‘compromis de vente’ will automatically contain a mortgage clause that states that should finance be declined from French mortgage providers, the prospective buyer is entitled to a full refund of his/her initial deposit of 5% or 10%.

The following documentation will be required to obtain a French mortgage.

If you are employed

  • Tax returns from last two years
  • Payslips for the last three months
  • Proof of any other income received; e.g. bank statements showing rent on investment property.
  • Proof of any other assets; e.g. copy of share certificates
  • Photocopy of passport
  • Photocopy of birth certificate
  • Bank statements from last three months
  • Copy of ‘compromis de vente’
  • Copy of formal quote (‘devis’),if renovations need to be financed
  • Proof of deposit sent to notary
  • Utility bill from primary residence

If you are self-employed:

  • Tax returns from last two years
  • Payslips for the last three months
  • Proof of any other income received; e.g. bank statements showing rent on investment property.
  • Proof of any other assets; e.g. copy of share certificates
  • Photocopy of passport
  • Photocopy of birth certificate
  • Bank statements from last three months
  • Copy of ‘compromis de vente’
  • Copy of formal quote (‘devis’),if renovations need to be financed
  • Proof of deposit sent to notary
  • Utility bill from primary residence
  • Certified balance sheet and profit and loss account from last two years.
  • Proof of last two year’s personal tax returns

Offer

Once you have found your dream property and decided you would like to make an offer, the first step is to present this offer in written form. Your agent will then liaise with the seller to present your offer. If they think the offer is too low, they can make a counteroffer, which you will in turn need to accept or try another offer. Your Chez Riviera agent will be there to help you through every step of negotiations. It is important to note that if you make an offer at the selling price, the seller is legally obliged to accept said offer.

Preliminary sales agreement

Once an offer has been accepted by the seller, the initial sale and purchase agreement or compromis de vente is drawn up. This contract stipulates the agreed price and terms, subject to any conditions that the buyer wishes to include. We will ensure that any specific conditions you request are included in the sale agreement and that your rights are protected for your peace of mind. This agreement is often drawn up in the presence of a notary. The notary is the sales lawyer who is under legal obligation to provide you with comprehensive and detailed information on the nature of the agreement you are signing and who will gather all information and draw up all legal paperwork for the sale.

Ten day ‘cooling off’ period

The buyer is entitled to a 10 day cooling off period, following the signing of the sale and purchase agreement. This option to withdraw from the contract is only available to the buyer. Once the seller has signed they are legally bound by the contract. At the end of the 10 day cooling off period the contract becomes binding on both parties (subject to any conditions that may have been included in the contract). If you wish to withdraw from the sale prior to the expiry of the seven-day you can do so for any reason whatsoever.

Purchase deposit

The buyer is required to pay a deposit of 5 – 10% of the purchase price. The deposit does not have to be paid on the day the compromis de vente is signed; it can be paid during the seven day retraction period. The deposit is sent directly to the notary and is held until completion in a government regulated ‘escrow’ account. If all conditions in the contract are met, but the buyer does not proceed with the purchase, then the deposit is payable to the seller.
Conversely, if completion is subject to one or more conditions, which are not fulfilled, then the buyer is entitled to a full refund of the deposit. In the event of default by the seller then the buyer can take legal proceedings to oblige them to proceed with the sale and/or for damages.

Diagnostics

The diagnostics are an array of property survey reports and a French legal requirement that form part of the transaction documentation which are paid for by the sellers. The diagnostics will report on asbestos, lead, termites, energy efficiency, natural or industrial risks, gas and electrical wiring.

Fees & Transaction Costs

In calculating the transaction costs of buying property in France, it is important to distinguish between fees and taxes, and between older and new property. In summary, the total fees and taxes payable for each is as follows:

Older Property: The total fees and taxes payable for the purchase of an existing older property are around 8% of the purchase price (excluding estate agency fees).

New Property: You will pay around 4% in fees and registration taxes, plus VAT at the rate of 19.6% on the purchase price except for sales between private individuals (excluding estate agency fees).

Although these total fees and taxes are often referred to as ‘notary fees’, in fact the actual notary fee itself is only about 1%. The rest comprises stamp duty, registration taxes, and disbursements. Notarial fees are regulated by the government and vary according to the sale price of the property. These fees are subject to VAT at the standard rate of 19.6%. If a mortgage is being obtained for the purchase then you should budget around 2% of the loan in fees and costs.

Notarial Fees & Charges
Are paid by the buyer.

Taxe d’Habitation
Is an annual tax that will be paid in full for the year by whomever occupied the property as at the first of January.

Taxe Foncière
Is an annual tax that will be prorated between the buyer and seller.

Syndic Charges
If your property is in a multi-dwelling building, then there will be monthly charges payable for communal maintenance, utilities, insurance etc. These are prepaid and will be prorated between the buyer and seller.

Agency Commission
Is normally payable by the seller.

Diagnostics
Are paid by the seller.

Final signing

Transfer of funds
Before you can complete a sale of a French property, the notary needs to have all of the purchase funds in place. This can be done by transfer of funds directly from your bank to the notaries’ secure account, or by cheque. Be sure to allow plenty of time for a cheque to be processed. If you are ta-king out a mortgage then the lender will arrange to transfer the funds to the notary.

Completion date
When all the enquiries have been completed and funds are in place, then you will be invited to the notaries’ office to sign the deed of sale. Only notaries are authorised to prepare such a deed, which guarantees legal transfer of the property. The notary will read through the main clauses in the deed of sale. There is no requirement for the buyer (or indeed the seller) to be pre-sent to complete the formalities. So if you are unable to attend the final settlement meeting, a ‘power of attorney’ can be arranged so that the notaries’ office are able to sign on your behalf.

Congratulations!
You are now the owner of a property on the French Riviera! Apart from local property taxes, which are very low by international standards, your only subsequent responsibilities are the monthly syndic charges (if you live in an apartment or villa which is part of a ‘copropriété’), home insurance (a legal requirement), and utility bills. Chez Riviera will personally assist you in organising all your utility connections so you can think about the fun parts – like turning your property into your perfect French Riviera home.

If you are looking to invest on the French Riviera and wish to rent your villa out to holidaymakers, we have a fantastic holiday rental partner, Sunlight Properties.

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