How To Buy A Property In France As A Foreigner? STEP-BY-STEP

15 June 2023

How to buy a Property in France as a foreigner? STEP-BY-STEPIn this article will share with you How to buy a Property in France as a foreigner? STEP-BY-STEP? The real estate contracts come from the Civil Code written in 1804 by Napoleon. The characteristic of French real estate is the property that cannot be reappraisal. All purchases have to be done through the notary, who holds an escrow account and represents the government. A notary carries out all the legal processes related to the purchase and ownership.

Documents Required To Reserve The Property

  • Passport copies of the buyer(s)
  • Civil status information form duly completed
  • Birth certificate
  • Marriage certificate (if applicable)

The Reservation Contract

Once you have decided on a property and have mutually agreed upon price, you as a buyer and the developer will sign a document known as a reservation contract (in 3 copies). This is the legally binding document that confirms that the developer must sell the property to the buyer. In addition to the reservation contract, both parties must sign the following documents in 3 copies:

  • Accurate floor plan of the apartment or the house
  • Technical description
  • Provisional payment plan
  • Master plan
  • Parking and basement plans
  • The SRU document
  • The SRU letter

Once the developer signed the reservation contract and relevant documents.  He must send one original contract and relevant documents back to the buyer and the notary public. As the buyer is not a French real estate professional, he/she benefits from a 10days cooling off period which allows him/her to think over his/her decision of purchase. After the cooling-off period, the contracts become valid. The deadline of 10 days cooling off period starts upon reception of counter-signed reservation contracts from the developer, by the buyer.

The Deposit

To take out the property from the market, the buyer has to transfer a reservation deposit (usually between 2% to 5 % for off-plan property and 10% for resale/ready property) to the escrow account of the notary. The notary kept The deposit until the signature of the ‘definitive contract’ for the transfer of title deed (which is the next step) and then the deposit is transferred to the developer. The paid deposit will be deducted from the price of the property. The buyer will receive his deposit back if:

  • He/she decides to cancel the purchase during the 10 day cooling off period
  • He/she does not obtain a mortgage. However, the reservation contract must include this condition.
  • The purchase failed due to a developer error.

The notary public keep The deposit in his escrow account, The deposit is secure

buy a Property in France as a foreigner

The Financing

There is possibility to get finance (mortgage) from French Banks, even if you are not a French citizen or resident. Once you sign the reservation contract, you have 45 days to apply for a mortgage, and one month to get the initial approval. If the mortgage is not approved, the contract is canceled and the buyer claims back the deposit. However, if the mortgage is declined and the buyer decided to purchase the property through his/her own funds, he/she can continue with the purchase as a ‘cash buyer’.

Signature Of The Title Deed Of Sale

the seller or the notary will notify the buyer about the draft of the ownership contract, after the signature of the reservation contract, at least one month before its signature. (CCH art. R 261-30). The article L 261-11 du CCH decrees to include in the ownership contract, the full description of the real estate, « The relevant indication related to the consistency and technical features of the real estate » Thereby, the consistency of the sold real estate comes from the plans and cross-section, with the useful measurement and the indication of the size of each room and corridor. The seller has to provide to the buyer, at the time of the ownership contract signature, the condominium regulation. This document should have been provided previously to the buyer (CCH art. L 261-11).

  • Then, the buyer should visit the notary office, in order to exchange the contract and pay the funds and the legal fees, due at this stage.
  • Alternatively, the buyer can provide a power of attorney in his/her country of residence, legalized by French Embassy. The buyer then sends legalized power of attorney to the notary’s office to permit him to exchange the contracts.

After the exchange contract, the notary registers the contract with the French administration and transfers the legal fees. This process guarantees that the property had been officially transferred under the buyer’s name and the buyer is the owner of the property from there onward.

In Case Of A New Or Off-Plan Project:

You are the owner of the land where the property would be built; You will be the owner of the future property; The developer has to build your property corresponding to the contract. (a bank guarantee backed the project) . So in case, if the developer is unable to build the project, the bank engages itself in building the project in the same technical specification and within the deadline, originally planned by the developer).

Payment For The Property

If It Is A Ready Property:

The full amount of the property and approximately 7% to 8% notary fees have to be transferred to the public notary’s escrow account prior to the signature of the title deed of sale. Once the buyer and the seller sign the title deed of sale, the notary will transfer the due amount to the seller.

If It Is An Off-Plan Property:

The notary will send to the buyer, a request for funds due for the signature of the title deed + the legal/notary fees of 3% (and would deduct the deposit already paid).  After the signature of the title deed, the remaining payments which are linked to the progress of work till handover, are paid into the escrow account of the developer. Your obligations as an owner of the property in France:

  • To insure the property
  • To pay the management fees (or service charges) to the management company, in advance
  • To pay the Residential and Property tax once a year.

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