Selling a property in France

Posted by admin in Property Investment, The Companies, The South of France | September 13th 2005

If you have decided to move and sell your present French property, this page will provide a general overview of the process and the points to bear in mind when selling.

Is there anything to consider before instructing an agent?

All property agents, agence immobillier are required by law to be licensed and hold a carte professionnelle. Most agents will be members of a professional association, for example FNAIM, which is the largest association.

Your agreement with the agent will be either exclusive, mandat exclusive or or non-exclusive, mandat simple. Whichever you chose the fee will be the same and as a result almost all sales are on a multiple agency basis. The agent’s fee is usually about 5% to 6% (including VAT at the rate of 19.6%) on the eventual sale price.

You can, of course, seek to sell the property yourself without employing an agent. If you do use an agent you should seek reserve to yourself your right to sell the property. There is a risk that if you do not you could be obliged to pay the agent commission even if you find your own buyer.

You have a buyer, now what happens?

The purchaser will instruct a French notaire who will act for both parties. However, as the seller, you can instruct your own notaire who will assist the buyer’s notaire. The two notaires will share the one fee.

As you may recall if you bought the property, an agreement to purchase, the compromis de vente or promesse de vente is usually prepared and signed by the parties, within a week or so of orally agreeing the sale with the buyer. The sale agreement can be prepared by the agent or the parties legal advisor not necessarily by a notaire.

You should ensure that any terms you want are included in the contract and that you are clear that the buyer has properly understood what is and what is not included in the sale (for example the dishwasher is included but you will be taking the sculptures from the garden). For small items it may be easier to agree an inventory to be attached to the contract.

• See the Property Purchase Transaction page for a summary of the types of contract and common contract conditions.

The buyer will pay a deposit of 10% of the purchase price, to the agent, legal advisor or notaire on the seventh day of reflection after the signing of the compromis de vente, which s/he will hold as a stakeholder.
Can you withdraw from the sale agreement?

On signature of the sale agreement as the seller you are effectively fully committed to the sale, should you withdraw you will be obliged to return the deposit to the buyer and pay him a further 10% of the sale price, even if you get a better offer after the sale agreement has been signed.

However, you should remember that the position is different for the buyer. Under French law the buyer has a “cooling off” period of eight days after signing the agreement. In this period a buyer is free to change his mind should he wish and withdraw from the agreement. He will receive the return of the deposit in full and the agreement is at an end. Should the purchaser withdraw after the eight-day period has passed, the deposit will be paid to the seller.

What happens after contracts have been signed and the deposit paid?

The legal advisor or the notaire will deal with the formalities of checking the title and making enquiries of any developments intended in the vicinity of the property.

Depending on the age and the location of the property the seller might be obliged to instruct experts to provide a certificate after inspecting the property for the presence of lead, termites and asbestos.

What is the role of the notaire?

Under French law the transfer deed, the acte authentique, to transfer the property to the buyer at completion, must be prepared by a notaire. The notaire will act for both the seller and the buyer, though the buyer will instruct him and pay his fee. There is nothing to stop you as the seller from instructing your own notaire who will assist the buyer’s notaire and share the fee with him.

You should remember that the notaire does not represent the interest of either party in the transaction; his role is not the same as, for example, an English solicitor in a property transaction.

You cannot assume that the notaire will speak anything other than French. If you are unfamiliar with the French language and French legal procedure it is prudent to obtain independent legal advice and guidance from an English-speaking lawyer or qualified legal advisor who can work in conjunction with the notaire.

What happens at completion?

Usually, the parties will meet at the notaire’s offices to sign the acte authentique and pay the balance of the purchase price. The notaire will use the money to repay the outstanding mortgages, if any.

The notaire is a government official who will also act as a tax collector. He will collect any tax that may be due before forwarding any balance of the sale price to you. Tax may be payable if, for example, the property is not your principal residence there may be a liability to pay tax on any capital gain and you might be obliged to pay the fees of a tax representative, représentative fiscal.

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