You have found your dream apartment and agreed upon a price with the seller. All that remains is to make the sale official, a process that can take between 4 and 6 months. At each key stage of a French real estate transaction, there are set timeframes, with deadlines to observe.
Signature of the Preliminary Sales Agreement or Provisional Deed of Sale
The preliminary sales agreement (“promesse de vente” or “promesse unilatérale de vente” in French), is a legal document by which the seller undertakes to sell the property to the purchaser at a determined price. With this type of agreement, there is usually a specified period during which the seller cannot pull out of the sale or offer the property to anyone else. In return for the privilege of being able to decide whether they wish to go ahead with the purchase or not during that period, the buyer pays the seller an earnest money deposit of 5% of the sales price.
The preliminary agreement known as “promesse de vente” or “promesse unilatérale de vente” is valid on condition that it is registered with the tax office within 10 days of being signed. The purchaser is liable for paying the registration duty.
Conversely, the provisional sales agreement known in French as “compromis de vente” or “promesse synallagmatique” is binding upon both the purchaser and the seller.
At the time of signing, the seller must provide all required survey reports (“diagnostics”), together with different documents relating to co-ownership, if appropriate. When the “compromis” agreement is signed, the two parties specify the maximum timeframe within which the final deed of sale will be signed, usually around 3 or 4 months, but sometimes longer.
Once the “compromis” or “promesse” agreement has been signed, the buyer has a period of 10 days starting on the day after signature, within which they can withdraw from the sale. To do this, they simply need to make the fact known (by registered letter) – it is not necessary to give a reason. They obviously recover their security deposit. It is worth noting, however, that if the seller has not been able to provide all the documents required, the period during which the buyer may withdraw from the transaction only starts to run once they are in possession of all the required documents.
It is also important to realise that even if the funds are available to you, the final deed of sale may not be signed immediately after the withdrawal period, simply because a notary must ensure that the commune (or other local authority) does not intend to exercise its right of preemption. That process usually takes one month. If the apartment is rented out, the notary will also check that the period during which a right of preemption may be exercised has expired.
Putting together an application for financing
Most people who acquire a property take out a mortgage to finance the purchase, in which case, when the “compromis” or “promesse” agreement is entered into, there is automatically a condition precedent that the buyer must obtain a bank loan. A period is specified within which the loan must be obtained. Bearing in mind that banks have their own procedures to follow, it is best to allow a minimum period of two months.
There are two possible scenarios. First scenario: the buyer fails to obtain a mortgage. The buyer may then pull out of the sale or continue with the purchase, assuming they have access to other sources of financing, of course. Second scenario: the buyer is granted a mortgage. The borrower must then wait 10 days, once they have received the offer, before signing it to show their acceptance and sending it back to the bank. So it is only after the 10 day-period has elapsed that the money will be made available and the purchase can take place.
Signature of the final deed of sale
Once all the documents have been prepared, you make an appointment with your notary to sign the final deed of sale. The notary will have asked the buyer to transfer an amount corresponding to the balance remaining, and a pro rata amount for fees and any real estate taxes. The keys will be handed over once the deed of sale has been signed. The buyer officially becomes the new owner of the property, which is at their disposal with immediate effect.
There are certain timeframes to be adhered to at different stages of the French real estate transaction. When you are an expat, there is a possibility of these timeframes being extended (in particular with respect to obtaining financing).