Our Blog - Property Purchase Process

As this was our first property purchase in France, we had to learn a bit about the process, which is a little different than in the US. I will add a caveat here that what I will describe is OUR process ... things may end of being slightly different if you are buying a stand-alone house vs an apartment, or purchasing from an individual vs using a real estate agent.

The "Offre d'achat" or "Offer to buy"

After you have determined that you want to purchase something, you have to make an offer similar to in the US. There could be some amount of negotiations, also similar to the US. In France, supposedly even a verbal offer to the seller, if they accept, could be deemed to be a contractual commitment. When we wanted to make an offer, we contacted the real estate agent who provided us with a standard form called an "offre d'achat" or "Offer to buy". This sets out mainly the purchase price and gets signed by both parties. At this time, no money changes hands (it is forbidden by law to ask for a deposit at the time the offer is made), and from what we've read, while this makes a contract between the parties, you can get out of this pretty easily until such time as you sign the "Promise" with a notaire.

The French Notaire

A note about the term "notaire". Initially, I thought this was like a "notary public", which we have used to confirm our signatures on certain documents. However, a Notaire in France is a public officer who operates in every area of law including family, property inheritance, asset, company law, countryside law, local authorities, etc. Similar to a lawyer, the notaire actually goes to law school for 3 years. At the end of 3 years, future lawyers enter the "School of the Bar" to complete their studies while notaires finish up in "notarial law". A lawyer can represent his client before the judge or the court. The notary can also do this, but only for non-contentious matters, that is, cases where there is generally no opposition.

The "Compromis de Vente" or "Sales Agreement"

The Compromis de Vente is basically the Sales Agreement, although it seemed to include a lot more than what I remember in our Sales Agreements in the US. Under the contract, the owner agrees to sell to the purchaser and the purchaser agrees to buy from the owner, subject to any conditions that may be stipulated in the contract. There are conditional clauses that you can put in the contract, like a condition that says that if the purchases can't get a satisfactory mortgage, they can get out of the contract. In the US, I always thought that you went through getting pre-approved for a mortgage, so I'm not even sure this type of condition can be put in the sales agreement in the US. The contract itself is prepared by the notaire, and then we had a meeting with the owner, ourselves, and the notaire. It seems that they are required to go through every part of it and make sure that both parties understand it. The first part of the agreement was, for us, a bit bizarre. It lists the two owners (they are sisters), their current professions (they are medical doctors), where and when they were born, and the fact that they are divorced. It also goes through where and when we were born and married, and defines that although we were married in Las Vegas, Connecticut marital law would apply to us since we were living in Connecticut before and after our marriage for over a year. I have never seen anything like this in the US sales contracts. It also goes through the succession to ensure that they are sure that the owners are in fact the only people who may have ownership of the apartment. This sounds odd, but France is governed by "Napoleonic law" and the concept of inheritance is a bit odd. For example, property is always inherited by children including any illegitimate children.

So after going through everything, both parties sign. At this point, a deposit (normally 5-10%) is provided to the notaire for escrow. As soon as this is signed, the "cooling-off" period of 7 days starts. During this time, the purchaser can withdraw from the contract without penalty. Another interesting thing here is that while the purchaser has a cooling-off period, the seller does not. Nor does something like death allow the seller to get out of the contract. We actually have friends who had signed the Compromis de Vente and then, prior to the final closing, one of the owners passed away. They are now in limbo, since they must wait for the laws of succession to work through (which we hear could take years) to determine the new owners (for example, if it passes from a parent to multiple children). However, the new owners are obligated by law to still sell the property.

The Acte de Vente or "Final Closing"

Between the Compromis de Vente and the Final Acte, a bunch of things happen, mostly by the notaire. One of the few things that the notaire doesn't handle is property surveys. The seller is required to have a set of obligatory surveys done on the property, which are then provided in a document. Among these are asbestos, lead, termites, energy efficiency, electrical wiring, etc. Other things include things like natural risks (like, is this area prone to earthquakes). The notaire ends up contacting a number of local authorities for a variety of things. For example, in France there is the "droits de pré-emption" or pre-emption rights, which means that others may have the "right" to buy the property before you. All sitting tenants also have the right of prior acquisition. This includes a tenant farmer on land belonging to the property you are proposing to purchase, who will have the right to purchase the property itself. The city government also has the right to purchase the property before you. It could take 2 months to ensure that the droits de pré-emption are handled. In our case, this wasn't an issue as there was no tenant, and the city had already made a general statement that they waive all droits de pré-emption for the building.

One thing that is common with the US is the pro-rating of various charges. For example, the prior owner has to pay the property tax (called taxe foncière here) from January 1 to the sale date, and then you have to pay the rest of the year. We have something like an Home Owners Association here that we call the "syndic de copropriété", and we have to pay a monthly charge for that. There are also common charges (building maintenance, building cleaning, electricity for common areas, landscaping, etc) that get split between all of the apartments in the building (like condo charges). These are paid quarterly, so we had to pro-rate the 3rd quarter charges and reimburse the prior owner for a couple weeks of those charges. There is a list and the notaire keeps track of all of them and determines who pays who at the end.

And after going back through almost all of the same information in the Compromis de Vente, we got to sign the 285 page sales document, they handed us keys, and that was it! As I said, everybody's situation may be slightly different and therefore, some of the process may be slightly different as well.