Hey, its me, Phillip - The steps to buying property in France
Mark is normally the man “behind the curtain” of this blog, but he is all about the pretty and flashy (like a crow to something shiny) and I would like to address the mundane and the boring… the process and the timing of buying property in France. We have been getting many questions about when we will be able to move in to our new home. Well, France teaches patience, a quality that Mark is struggling with. So here's the process.
At the end of this post I have written the latest on where we are in the process, so feel free to skip to the end. I won't be offended. Really, I won't. Really.
The Hunt
Unlike the United States, France does not have a multiple listing service (MLS). When you search online for properties for sale in France you will only see listings agents have uploaded. There are a few aggregator sites that pull listings from the agencies so can you can search in one place, but these also, will not include everything. Some common aggregators are:
There are a few agencies that specialize in château and luxury properties. A few of these are:
The interesting thing is that properties are usually not listed exclusively with one agent or agency, so you will often see the same property listed multiple times with different prices. I know, it doesn't make sense that the same property will be listed with different prices, but that's just how it is. Because of this, agents don't like to divulge exactly where a property is, to prevent another agent from finding out who the sellers are and bypassing the listing agent in the sale. When a deal is made, whichever listing agent showed the property gets the commission. The rest get NOTHING. This also means, that agents only work with each other if they have or can establish a good relationship. This means, that in France, there isn't the notion of a "buyer's agent” and a “seller's agent”.
In addition to looking online, you need to go to agencies in the area where you are looking and talk to them. You can try emailing and calling, but french real estate agents are not the most responsive. Business in general in France, is based on networking. It is all about who you know. They like the personal touch. So showing up on their doorstep is the best way to start working with an agent. Once you get that foot in the door, the world will open up to you. The agent will work their network to help you find a property. However, they will only show you properties that are within their “network”. So you need to work with multiple agencies to access more properties.
For each property that you want to see, you have to call one of the listing agents and make an appointment. They will not tell you the exact location until the day of the viewing, or sometimes they will meet you somewhere and then have you follow them to the property. Very cloak and dagger. This makes it a lot of work for the buyer because you are constantly working with different agents. However, there are an increasing number of "property finders” in France that will act like a "buyer's agent”. The Property finders spend great amounts of time developing relationships with agents in the various regions of France which can alleviate some of the pressure that buyers are under. The downside to property finders is that you generally have to pay them for their services.
We have been working with an agent in Carcassonne who we met almost 6 years ago and she has kept in touch with us and kept us informed about the real estate market this whole time. She has been working for us as a buyers agent as well as showing us her own listings and those of her agency. And I would like to introduce her.
Her name is Anna Sirinides at Leggitt Immobilier (selling shacks to chateaux). And she has been a godsend. If you decide to come and join us in France, give her a call.
You will notice when looking at listings online that there are often not many pictures. And don't be surprised to see dirty laundry on the floor. Because listings are usually not exclusive, french real estate agents don't spend a lot of money on the marketing of the property and often snap the photos themselves and for some reason french sellers seem to think you should the property as it is in real life. So if they have dirty laundry on the floor, they expect you would too if you lived in the property. In a way, it is a more honest representation of the property. As I mentioned, listings will very rarely give you an exact address. However, you can sometimes find enough clues in the listing to search on google maps to find them. This is a must, because it is here that you will discover that the property is next to a recycling plant or a freeway, which the agent forgot to mention in the listing. I have spent hours searching on google maps and triangulating based on the the description of distances from a town the property is. It makes you feel like an analyst from the CIA.
The Offer
When you find “the property”, you make a verbal offer to the listing agent. If you are making a full price offer, then the agent will write up an “Offre d’Achat” which is the written offer. You sign it, the agent has the seller sign it and you are ready for the next step. If it is not a full price offer, then the negotiations begin. The agent will act as a go between until you and sellers are agreed. Everything is on the table. The 2 key items are the price and if there is going to be a mortgage. But you can also include things like furnishings, fixtures and anything else you want included in the sale. When everything is agreed, the agent writes the Offre d’Achat for everyone to sign.
For us, our negotiation was focused on price and an issue about a small lot that was not being included with the sale. The lot is on the north side of the property, behind the chai. We wanted to include it because it would give us access to the backside of the chai. We eventually agreed with the sellers to split the small lot so we would have access to the back of the chai and they would retain the part that was a side yard for another house that they also own.
We want to be able to drive a car/truck/tractor to the backside of the chai so we can use the chai for storage. When the sellers suggested splitting the lot, we went back to look at the part that would remain with the chateau to see if it would work. The remaining part provides a small alley behind the village house and connects with a road on the other side of the village. It is just wide enough that we can get Betty (our pick up truck) through.
The Contract - Compromis de Vente or Promesse de Vente
Once you have the Offre d’Achat it is time to speak to a lawyer. In France there are 2 types of lawyers: Avocat and Notaire. The basic difference is an avocat handles cases that go to court or represent you in contentious matters. A notaire handles contracts, estate planning and family matters. A distinction of a notaire is that they are public officers which allows them to record deeds and collect transaction taxes on behalf of the government. When it comes to real estate, the notaire rules!
At this point your notaire will take over the transaction. Their first order of business is to write up a contract of sale which will either be a Compromis de Vente or a Promesse de Vente. There is some nuanced distinction between the 2 types of contracts, but they are both contracts of sale and the details in them dictate the rest of the transaction. Once this is complete, you and the sellers will sign the contract. Are you done? NOOOOOOOOOOO. This is really just the opening of escrow. At this point, you will put down a deposit, which can be anywhere from 5% to 10% of the sales price. The money will be held by the notaire and provides a guarantee to the sellers that you will complete the sale.
So what happens if you get cold feet after forking over the deposit? Excellent question. You get 10 days after signing the contract to change your mind for any reason, and if you do change your mind you get your deposit back. After the 10 day cooling off period you would be hard pressed to get your deposit back if you changed your mind. The exception is if you have any contingencies built into the contract (i.e. for a mortgage), in which case the terms of the contingency will dictate what happens. At this point, the only real recourse you have to get out of the deal and not lose your deposit is death. Yes, if you die your estate will not be obligated to complete the sale. But then, you will also not enjoy the benefit of the property, so it’s a double edged sword. Interestingly, the sellers do not have the death option to get out of the sale. If they die before the sale is complete, their estate is required to complete the sale. If you do decide to break the contract after the initial 10 days and not based on any contingencies, your will lose the deposit and technically, the sellers can sue you to complete the sale, although they are usually fine with just keeping your deposit and putting it back on the market.
But I am getting ahead of ourselves, because before the contract is signed, the sellers are obliged to provide diagnostic reports on the following:
Lead
Asbestos
Energy Efficiency
Pollutants
Electrical system
Gas system
Septic
Termites
Radon - Only in areas where there is a risk of radon presence
Geotechnical - Only in areas where there is earthquake activity
All of these reports are completed before you sign the contract. If you want any other inspections, these should also be done before the contract is signed. This part of the process takes about 2 weeks, but depends on how quickly the seller can get the inspections done and if anything surprising pops up from those said inspections.
The Escrow
For Château d'Avensac, this isn't really a risk. The chateau does not have that much property and none of it is currently farmed or looks as though it was previously farmed. There is perhaps 2 or 3 acres which are flat enough that could have been farmed, but there are very large trees on this part of the property, so it is clear that it hasn't been farmed in a long time if ever. So there is the possibility that the SAFER doesn't even have to be notified, but we won't find out until the notaire does their research.
During this phase, the notaire is a busy abeille (bee) and you are mostly just sitting and waiting and waiting and waiting and waiting and sitting, etc. The notaire does a title search to ensure that there are not any encumbrances on the property. They will also contact the Mairie (the town hall), because the Mairie can in some cases (albeit rather rarely) stop the sale. And, if the property falls under agricultural jurisdiction, the ever powerful and mighty SAFER is notified (see side note). If there is a mortgage involved, then all of that is finalized during this period. Also any contingencies that were agreed upon in the contract are cleared.
During this period you will arrange switching over the utilities. Its also a good time to introduce yourself to the mayor of your village (bring a gift).
We have not gotten to this stage yet, so there may be more that will be happening that we've yet to experience.
The closing - Acte de Vente
This is the moment, it has finally arrived, you sign the Acte de Vente. The Acte de Vente is the final contract that transfers ownership from the seller to the buyer. Often you will have a final walkthrough of the property beforehand and then go to the notaire's office to sign and pop a bottle of champagne and get the keys. Now it's time to move in and enjoy.
Where we are in the process
We have a signed the Offre d’Achat and our notaire is preparing the contract. She has been in contact with the notaire of the sellers and the agent getting it all ready. We are waiting for the diagnostic reports but don't expect any surprises. The main house was built in 1830, so there is probably some lead paint. We didn't see anything that resembled asbestos, so I don't expect that will be a problem. It will. undoubtably get the lowest energy efficiency grade. And fortunately, the property is on the village sewer system, so we don't have to worry about septic. We'll probably replace most of the electric and plumbing so the current state of that isn't so important (as long it works for the short run so we can move in).
There was a delay in getting the diagnostics arranged. Something about an email in a spam folder, but all I hear is “my dog ate my homework” (which actually happened to me once, but it was a goat instead of a dog). The diagnostics are schedule for today, May 25th. Assuming that we will get the report later that week, our notaire has arranged for us to sign the "compromis de vente" on June 3rd. Which was the date I was scheduled to get my second vaccine. No problem, I moved my vaccine appointment (you can see the priorities here).
The big question for us is whether the SAFER has to be notified or not. The notaire will research the lots that comprise the property to determine this. If the SAFER has to be notified that automatically takes 2 months for them to decide if they want to preempt the sale (which very very very rarely happens). But you have to wait for them (and pay a fee, of course) to find out. The notaire has indicate that it is very very very unlikely that we can skip the SAFER however, for a fee of 480 € we can reduce the response time from the SAFER from 2 months to 15 days. I suspect we will be paying the fee.
After the compromis is signed we could close as early as 1 1/2 months later. Mark, ever the optimist is thinking we will close in mid July. I must be nice to live in a fantasyland bubble. Hopefully, it won't be too much longer. We are ready to move in.
Vocabulary Recap
There have been quite a few french vocabulary words in this lesson. Here they are. Write them down on 3 by 5 index cards and pull them out to impress your friends:
abeille (feminine) = bee
acte de vente (masculine) = bill of sale. The final step in a real estate transaction that transfers ownership of the property.
avocat (masculine), avocate (feminine) = lawyer. Also in the masculine form, an avocado. “L’avocat mange un avocat” This could be “the lawyer eats an avocado”, "the avocado eats a lawyer”, "the lawyer eats a lawyer” or “the avocado eats an avocado". Context is very important in french.
chai (masculine) = wine store (often a stone barn)
compromis de vente (masculine) = contract between sellers and buyers of a property
immeuble (masculine) = a building
immobilier (masculine) = a real estate agency. Really a shorten form of “agence immobilière”.
mairie (feminine) = town hall
meuble (masculine) = furniture
notaire (masculine) = lawyer (but more like a British solicitor), a notary. Handles real estate transactions.
offre d’achat (feminine) = an offer to buy a property
promesse de vente (feminine) = contract between sellers and buyers of a property