Sales between individuals
In France, it is common to purchase an apartment or house directly from the owner in order to eliminate real estate agency fees. You should, however, be observant when visiting the property and not hesitate to bring along a construction professional or architect. Real estate advertisements can be found online and in daily and weekly trade publications.
Real estate agencies
The services of a real estate agent can be useful. An agency can help you find your dream home and advise you on the quality and other aspects of the property. The agency will also guide you through the various procedures required to purchase a home. Agency fees are generally 5-10% of the property’s value and are paid by the purchaser.
The notaire (notary-public)
A notaire is a public officer appointed by the Ministry of Justice. Notaires have the authority to enact contracts between private individuals, and are responsible for maintaining contract and property registries.
Use of a notaire's services is compulsory during a real estate sale. Signature of the final sales contract always takes place in the presence of this sworn government official. The notaire validates the sale, verifies the presence of all necessary documentation and ensures the absence of any irregularities. The notaire collects all duties related to the sale that are owed to the government, including his fees.
Purchasing a pre-owned home
Reserving a sale involves signing a promesse de vente (promise to sell) in a notaire’s office or real estate agency and providing a deposit of 5-10% of the sales price. This promise or pre-contract must stipulate the suspensive conditions under which you could withdraw from the contract (e.g., the existence of easements). If you are relying on loan financing, obtaining loan approval is a compulsory suspensive condition. If the loan is not obtained, the seller must reimburse any deposits made.
Financing research and loan applications are done through a bank. You will receive a loan offer by mail and must respect the 10-day « cooling off » period before accepting the loan.
Signature of the final sales contract takes place in the presence of the notaire approximately 3 months after the promise to sell. By that time, the notaire will have prepared all of the necessary documentation. The seller is required to provide an energy performance evaluation and, if applicable, inspect for asbestos and certify the absence of lead and termites.
To learn more about the steps involved in purchasing a pre-owned home, visit L’Agence nationale pour l’information sur le logement (National Agency for Housing Information).
Building a new home
The first step is finding your dream property and verifying that :
- Construction is possible,
- It has access to utilities (e.g., water, electricity, sewage).
Next, request a building permit from La Mairie (the municipal authority). Once obtained, the final step is signing a building contract with the contractor of your choice.
To learn more about building a home, visit L’Agence nationale pour l’information sur le logement (National Agency for Housing Information).
Purchasing a home for future completion
Purchasing a home that will be completed in the future (vente en l’état futur d’achèvement or VEFA) is highly regulated in France. In the case of a VEFA purchase, payment is progressive and depends on the advancement of construction efforts.
To learn more about purchasing a home for future completion, visit L’Agence nationale pour l’information sur le logement (National Agency for Housing Information).
For complete information concerning housing, including regulations, access to property and advice, visit Le Ministère du logement et de la ville (Ministry of Housing and Urban Development) at www.logement.gouv.fr and L’Agence nationale pour l’information sur le logement (National Agency for Housing Information) at www.anil.org.
The financing plan should incorporate all costs, including the purchase price, agency fees (if applicable) and notaire fees. Be sure to include the cost of any repairs and renovations !
Bank loans are the most common type of financing. Banks offer various types of housing loans including :
- A fixed-rate mortgage with a constant interest rate for the duration of the repayment period,
- A variable-rate mortgage with a rate that is linked to an index,
- A capped variable-rate mortgage with a rate that varies but cannot exceed a specified limit.
A guarantee is essential and may include :
- A mortgage security on the real estate asset being financed. Should you default on the loan, your bank could repossess and sell the asset to recover the amount owed.
- A guarantee provided by a specialised organisation. Following payment of a commission and investment in a guarantee fund, the organisation will guarantee the loan. Should you default, it will pay the bank the amount owed.
Comprehensive home insurance
French law requires tenants, but not owners, to purchase multi-risk home insurance. Home insurance protects your home and possessions against theft, damage, fire and natural disasters. Multi-risk home insurance also includes third party liability insurance, which covers any damages claimed by third parties under your responsibility.
Different financing solutions are available for additions and renovations.
- Enhancements or additions to your home (e.g., veranda, new bathroom, attic conversion) can be done with a personal loan from your bank.
- If you are eligible for at least one family support service such as housing assistance or family allocations, the Caisse d’Allocation Familiales (www.caf.fr) can offer a home improvement loan for certain types of repairs, additions and sanitation projects. These loans offer preferential rates but are limited to small amounts.
- If you are installing heating or insulation to decrease energy consumption, you can take advantage of loans dedicated to energy efficiency improvements.
« Green » tax credits
If you qualify as a resident of France for tax purposes and take actions to increase energy savings or the use of renewable energy, you may be eligible for a tax credit.
To learn more, visit www.impots.gouv.fr