FREQUENTLY ASKED QUESTIONS
ABOUT BUYING PROPERTY IN FRANCE
Do I need to have a French bank account to buy real estate in France?
How do I get a loan from a French bank?
What happens if my loan is not approved? Am I liable for the deposit?
What happens once the seller and I have agreed on a price?
How long does it take to close?
Can I change my mind after signing the preliminary sales agreement?
Can the agreements be written in English?
Do I need to have a French bank account to buy real estate in France?
A French bank account is required only if you are taking out a mortgage from a French bank, since your payments will be deducted automatically from your account each month. Some banks will open an account for you as part of the loan process, or you can open an account at another bank. You may find a French bank account useful in any case, to manage tax, utilities and other expenses associated with your property. Our partners can help you as part of managing your financing process.
How do I get a loan from a French bank?
There are several banks that offer mortgages to non-French residents, with numerous financing options and loans to suit every need. Our trusted bilingual mortgage partners work to guide you smoothly through the borrowing process. The loan approval process takes about 3 to 4 weeks once all your documents are with the bank. We can arrange a financial evaluation, and pre-approval, to help determine your budget before beginning your search.
What happens if my loan is not approved? Am I liable for the deposit?
If you are seeking a loan in France, you can request that the purchase agreement will be contingent upon you receiving financing. The purchase agreement will even specify the minimum loan terms – mortgage rate, down payment and loan length – that you are willing to accept. Ordinarily you’ll have 45 days from the signing of the preliminary sales agreement to secure financing. If you are unable to do so in good faith, the agreement is cancelled. You are excused from purchasing the property and your 10% deposit is refunded.
What is the "Loi Carrez"?
The Carrez Law establishes a standard way of measuring the surface area of a property, defining what is and is not "livable" space. For example, areas under a ceiling lower than 180 centimeters (not uncommon in some top-floor apartments) fall outside the measurable area. A measurement conforming to this definition is the "loi Carrez." All property sales agreements must state this area, in square meters.
If within one year of your purchase you discover that there is more than a 5% difference between the stated Loi Carrez measurement and the actual area, you may contest the sale, and are entitled to a reimbursement.
What is a notaire?
A notaire – not to be confused with a notary public in the US – is a highly qualified lawyer operating within the French legal system. The notaire is a public officer and counselor in specific areas of the law, including real estate, family and corporate law. He or she has the exclusive power to authenticate certain agreements, including real estate transactions. This ingeniously controlled system prevents almost any subsequent litigation concerning such contracts. Notaires subscribe to a type of insurance that provides an immediate financial guarantee to the client in case of error. Most notaires will not ordinarily provide legal advice concerning tax structure, inheritance or other issues. However, Paris Property Finders’ clients enjoy the benefit of accessing specialized, bilingual notaires who are used to working with international clients, and have experience in many of the issues that are of concern to affluent investors. We can also put you in contact with specialists who can aid you with whatever legal, tax or other needs you might have.
It generally takes about two months for the notaire to register a sale with the French Registration Authority. Documents include the equivalent of a title search, habitability, and the absence of termites, lead or asbestos. This period might seem long compared to other countries, but its meticulousness results in a mere .5% rate of legal challenges to real estate transactions – far less than elsewhere.
What happens once the seller and I have agreed on a price?
There are two main stages:
1.The preliminary sales agreement: promesse de vente or compromis de vente
The preliminary sales agreement contains all the legal terms of the final contract, which cannot be changed. This agreement may be drawn up by a real estate agent, in which case it is called a "compromis de vente."
Notaires generally use a "promesse de vente," which offers additional protections to the buyer. As a buyer, then, it is preferable to take this step under the supervision of a notaire.
2. The final sales agreement: "acte authentique"
After the preliminary sales agreement is signed, the notaire collects various documents, such as property titles, surveys and mortgage documents, verifying that everything is in order; and determines the tax and other payments to be made.
What is an SCI?
An SCI is a French company structure commonly used as a holding entity for real property.
How long does it take to close?
From the signing of the preliminary sales agreement to the final closing, the process generally takes between two and three months.
Can I change my mind after signing the preliminary sales agreement?
Yes. Since June 2001, the law provides a seven-day buyer’s remorse period for private individuals buying residential property. During this period the buyer can withdraw from the acquisition of a residential property without incurring any financial penalty.
Can the agreements be written in English?
In order to be valid under French law, the agreement must be written in French. Some notaries may provide translation of the agreements, usually for an additional fee. Or you can use a translation service. In any case, the document should be explained to you in a language you understand, either orally or in writing.
Paris Property Finders partners with English speaking notaires to ensure that you are fully aware of your rights and obligations. In addition, your Paris Property Finders expert can accompany you to, or represent you at, the signing to ensure that you understand the conditions.
How much property tax will I pay each year?
The amount of the property tax depends on the value of the property, its size and location. It is relatively low compared with other countries; in Paris the average is about 500 euros per year. If you live in your property, you also pay the local residential tax, which is about the same amount as the property tax. If you rent the property, the renter is responsible for paying this tax.
How is the building managed?
Buildings in Paris are often managed by an outside company called a syndic, which oversees co-owner meetings, maintenance and matters concerning the common areas of the building. At an annual meeting, the owners decide on any renovations, improvements, or building works, with the syndic overseeing to their execution. Owners attend the meeting, or can vote by proxy vote.
To cover the fees of the syndic, insurance, maintenance and the concierge if there is one, quarterly dues are paid which vary depending on the number of apartments and building features, from 100 to 200 euros a month. A good rule of thumb is about 2 euros per square meter.
When you purchase an apartment, any renovations that were voted upon previously is the financial responsibility of the seller.
If you have not found an answer to your question here, please call or email us directly and we will be happy to address your concerns.
