Buying a home in France

If you already have the full amount you need

If this is the case, you can easily purchase the property straight from the owner.

It is extremely important that you never pay money straight to the seller.

In France, all necessary verification and payments are carried out through an authorised legal expert called a notary or “notaire”.

If you require a home loan

Most people do not have the full amount needed to buy a home outright.

It is therefore common to apply for a loan from a bank.

Some key information about home loans in France:

• The repayment periods are generally between 5 and 25 years.
• The interest rate is fixed from the outset and will remain the same for the entire term of the loan. However, it is sometimes possible to renegotiate it with the bank afterwards.

Banks impose financial conditions that need to be met before approving a loan application, for example:

• Stable income, for example a permanent employment contract called “CDI”. Or if you are self-employed, stable or rising annual revenue over the last three years.
• A debt ratio or “taux d’endettement” that does not exceed 35% of your monthly income. The term “taux d’endettement” means that the loan repayments you would make to your bank each month, together with any other loans and rent, may not exceed 35% of your monthly income before income taxes.
• A sum of money already available in your account. This is called a down payment or “apport” that will contribute to paying for the property. Depending on the banks and your profile, the “apport” requested may be between 5% and 20% of the purchase price. In some cases, however, it may also be possible to obtain a loan without an “apport”.

You can use this tool to find out how much you can borrow.

You will need to have a certain percentage of the total purchase price from the outset.

Once your offer to buy has been accepted by the seller, you will have to make an initial payment called an “acompte”, or deposit, to secure the sale:

• This deposit or “acompte”, also known as the “séquestre”, is legally 10% of the sale price. However, you can try to negotiate with the seller to only pay 5%.
• You must pay it through a legal expert called a notary or “notaire”. Never pay it directly to the seller.
• This amount will be deducted from the final payment.
• If you are using a home loan to buy the property, this amount will be considered as part or all of your down payment or “apport” by the bank.

You will have different costs to pay at the time of purchase:

• The costs of the legal expert called the notary or “notaire” who will draft the official documents. These costs, known as acquisition costs or “frais d’acquisition”, are approximately 7% of the price of the property. You can estimate these costs using this tool.
• Real estate agency fees if the sale goes through a real estate agent. These costs generally amount to between 3 and 5% of the price of the property. They will be paid by either the seller or the buyer, depending on the agreement made by the seller with the estate agent.
• Local taxes, which are paid annually. For the year of purchase, these will be shared with the seller based on the date you sign. The “notaire” will calculate the distribution.
• Any works to be carried out in the home before moving in.

After you own the home you will have ongoing cost relating to property ownership:

• Annual local taxes.
• Co-ownership fees if you have purchased an apartment.
• Any maintenance work in the home.
• If you have purchased the property with a home loan from a bank:
  • The monthly repayment of the loan.
  • The interest associated with the loan.

Finding the best deal

If you need a loan from a bank to pay for your property purchase, it is recommended that you compare the banks’ offers and start the process before you even begin viewings.

To do this, you can hire a professional specialised in comparing home loans called a broker or “courtier”.

Obtaining an “accord de principe” (agreement in principle) to help you buy

Once you have chosen the bank that offers you the best deal, ask them for a document called an “accord de principe”. This document confirms the bank’s willingness to continue with the home loan application once you have found a property you want to buy.

This document will reassure the seller and give you a better chance of your offer being accepted.

As part of your property purchase, you will likely be asked to provide the following documents at various points in the process:

• A copy of your identity document, such as your passport, identity card and/or the document authorising you to enter France called a “visa” or your residency permit or “titre de séjour”.
• If you are currently a tenant, a copy of your lease and your last rent receipt.
• Documents showing your marital status if you are buying with a partner.
• Documents proving your financial resources, for example:
  • a certificate from your bank proving that you have the necessary funds
  • your last two tax notices
  • your last three payslips if you are an employee
  • your last three financial statements if you are self-employed.
• Your bank account certificate, or “relevé d’identité bancaire (RIB)”. It is recommended that you have a French bank account to make the different payments needed more easily, but this is not mandatory.
• If you require a bank loan to purchase the property, and you have already started the process with a bank, the document called an “accord de principe”, confirming the bank’s willingness to continue with the home loan application once you have found a property you want to buy.

You can start by looking for and visiting various residential properties for sale.

Finding available properties

To search for a property, you can, for example:

• view online advertisements on specialist sites such as “SeLoger”, “Pap” or “Leboncoin”
• seek the assistance of a real estate agent.

Gathering information

Be very careful when interacting with the owner or real estate agency. There are many things to consider before making an offer, such as:

• The price per square metre, which you can compare with previous sales in the neighbourhood by looking at this website.
• The risks to which the home is exposed. You can ask to see a document presenting the various risks called a property diagnosis or “diagnostic immobilier”. For example, it may indicate the presence of asbestos or a risk of flooding.
• The amount of local taxes. These are taxes that you will have to pay each year.
• If it is an apartment:
  • The amount of the co-ownership fees or “charges de copropriété”, i.e. the costs you will have to pay for the maintenance and use of the building.
  • The last three recorded minutes of the co-ownership meetings called the “procès-verbal d’assemblée générale” to find out about the works to be carried out in the building in the coming years, for which you will have to pay for, as well as any problems in progress. Study these documents carefully, as sometimes people sell to avoid costly works in future.
  • The document setting out the rules to be respected in the building, known as the co-ownership regulation or “règlement de copropriété (RCP)”.

Contact the town hall or “mairie”

It is advisable to contact the administrative authority of the town or city known as the “mairie” to:

• be informed of any urban development projects that may impact the neighbourhood
• ask to receive the document setting out the planning rules in the local area called the “plan local d’urbanisme (PLU)” if you are planning to build an extension.

Once you have found a property that interests you, you can draw up an offer for the seller straight away.

You can find templates on the internet by typing in “modèle lettre offre achat” (purchase offer letter template).

In your offer, you must specify:

• the price you offer to purchase the property, which can be different from the price offered by the seller
• the period of validity of your offer, usually a maximum of one week.

Withdrawal option

You can withdraw your offer at any time, without any consequence, until you have signed the purchase agreement known as the “promesse de vente” or “compromis de vente”.

This means that you can make an offer even if you have not yet received all the information listed in Step 1.

The seller’s response

During the period of validity of your offer, the seller can decide to accept or reject your offer.

In the event of rejection, they can make you a counter-proposal at a different price.

You can, in turn, accept or reject their proposal.

Once your offer has been accepted, you will sign a document that legally commits the seller and buyer to complete the transaction.

This document is used to secure the purchase of the property. This is a very important step to protect you as a buyer.

This document can be referred to as a “compromis de vente” or “promesse de vente”. These are two different documents from a legal perspective, but in reality they have very similar consequence.

Drafting and signing the document

In order to draft this document, it is essential to have an official deed called an authenticated deed or “acte authentique” drawn up. This is done by the legal expert known as a notary “notaire”.

The “notaire” will be able to ensure that everything is done correctly and alert you to certain risks that you would not have identified.

It is also possible to sign a document called a private deed “acte sous signature privée” or “acte sous seing privé”. This is an agreement drawn up and signed by private individuals. However, this is not recommended at all and constitutes a very significant risk.

Period of validity

This document is valid for a period defined at the time of signature:

• A “promesse de vente” is usually valid for two to three months.
• A “compromis de vente” will be valid for a minimum of three months.

You will only be able to sign the official deed of sale or “acte de vente” after this period.

Terms and conditions

If you sign a “promesse de vente” or “compromis de vente”, you will need to specify the terms and conditions of the sale in this document.

You may include conditions of purchase called “clauses suspensives”, for example:

• that you obtain a home loan from a bank
• that you obtain planning permission.

“Clauses suspensives” will allow you to withdraw from the purchase at any time up to the end of the sale without any consequences for you if these conditions are not met.

Payment of a first payment called an deposit or “acompte” or “séquestre”

At the moment of signing, you will have to pay the first part of the purchase amount known as the deposit or “acompte” or “séquestre”.

According to the law, the “acompte” need to be 10% of the price of the property. However, you can negotiate with the seller to pay only 5%.

This payment can be made through a professional such as a real estate agent or notary “notaire”. Never pay it directly to the seller.

Right of withdrawal without justification

Once you have signed the “promesse de vente” or the “compromis de vente”, you have a period of ten days during which:

• the buyer may cancel the purchase of the property without justification and recover the deposit or “acompte” paid
• the seller cannot withdraw.

After this ten-day period, if you wish to cancel the purchase of the property:

• you will not be able to recover the “acompte” paid
• if the “acompte” you paid was only 5%, you will have to pay an additional 5% to the seller for their indemnity to be 10% of the price of the property.

If you need a home loan to pay for your purchase, now is the time to contact the bank to make the official request and sign the contract.

Once the period of validity of the “compromis de vente” or the “promesse de vente” has lapsed, you can sign the official sales document known as the deed of sale or “acte de vente”.

This is when you become the owner of the property.

This document is mandatory. It must be drawn up by a legal expert known as a notary “notaire”.

Choice of notary

You can hire one common “notaire” with the seller, or choose two different ones.

Amounts to pay

Once the deed of sale has been signed, you must pay:

• The sum corresponding to the purchase price of the property. Payment is made through the “notaire”, never directly to the seller.
• The fees of the “notaire”.

You will then receive the keys to your home.

Once the sale is finalised, the “notaire” will still have to take several steps, such as registering the “acte de vente” with the tax authorities in order to receive a copy of the authenticated deed or “acte authentique” with a stamp.

This document will constitute your deed of ownership and will be kept for 100 years by the local notarial office or “office notarial” before being entrusted to the departmental archives.