The Buying Process & Contracts
So you found a villa you like and you want to make an offer. First, read this guide on how to determine a villa’s market value, so you know what price to offer. Your offer price should be based on the current market value of the villa — not the seller’s asking price.
Second, make sure that you’ve read all our guides and have collected the diagnostics reports, checked on the zoning, and done all the other things we recommended.
Once you’re sure you’ve been thorough, and you’re ready to make an offer, here’s how to do it:
Calculate the Price for Your Offer
Here’s a step-by-step guide: how to determine what your initial offer should be.
Remember: All the prices you see advertised have one thing in common: so far, no-one has agreed to pay that price. Don’t believe agents when they say that other people have been interested at high prices.
Don’t tell the agent about your offer, as they are usually mandated by their corporate agency not to let buyers submit ‘market value’ offers, and they will lie to discourage you from submitting an offer much lower than asking. Your offer should go through a notaire — one you chose, not one the agent recommended.
Note: If the seller won’t accept the m² price you think it’s actually worth, then you can wait and keep looking. If it’s overpriced, chances are good that it won’t sell — and eventually they will lower the price or come back to you and accept your offer.
Get the Survey Reports
There are a number of surveys that the seller is legally obligated to give you (if they don’t, you can sue them later). They’re by no means exhaustive, and some surveyors are corrupt and will lie for the benefit of the agent or notaire, so it’s important to get your own inspection done as well (before you sign the contract.)
The diagnostics given to you by the seller need to be recent (here are the details). Here’s a guide to diagnostics reports and another guide. The seller isn’t obliged to fix defects; as the purchaser, you will be expected to pay to fix them. The obligation on the seller is simply to provide the full reports. If he/she does not do so, they remain fully responsible for defects relating to these specific matters. Actually getting them to pay up is another matter…
Make sure to also get the urban planning certificate, so you’ll have a rough idea of what can be done with the property.
Read our guide to important things to find out for more details about the reports.
Before You Put it in Writing
There are a few things you should do before making your offer. First, visit the local town hall (‘Mairie’) and ask about the property and the neighbors, etc. Find out if any neighboring lots have building permission, and what the natural risks are, check the property’s planning permission history to see if anything was done without permits, etc. Make sure to get a town planning certificate from the Mairie.
Then, hire a CERTIBAT-certified ‘Expert de Batiment’ to inspect the villa and point out any areas for concern (like non-obvious structural problems, etc.) Your seller would not have to disclose any structural defects affecting the property that you will take in the condition in which it stands – although he is not entitled to actually hide them. This means that if, after signing a contract, you discover structural or other defects to the property or its services, you are still obliged to complete the purchase at the agreed price and cannot obtain compensation from your seller. It is, therefore, important to commission the inspection before you sign the contract.
Then, double-check all the other potential issues outlined here (internet connection, radon, zoning, etc.), then once you’re satisfied, submit an official offer via a notaire. To lower the notaire fees, you can specify part of the sale price as a payment for furniture.
Money-saving tip: You can lower your notaire fees (which are based on the price of the empty villa only) by separating the agent fees from the sale price, and paying those yourself (the notaire will hold the money and transfer it to the agency once the sale is complete). You can also separate out about 3% (don’t go above about 2-3% or you’ll risk an audit) of the total for kitchen, bathroom and light fittings, furniture, etc. and pay that separately.
How to Choose a Notaire
A notaire is basically a property lawyer / tax collector who advises their clients, does the paperwork for the deal, and collects the government taxes. Make sure to get your own notaire — do not use the seller’s or your agent’s, and choose wisely. Expect to add roughly 7% to the final price in taxes and fees.
Start hunting for a notaire well before you’ve found your ideal property, as finding a good one can take time. You’ll need to contact several notaires, as some will try to scam / lie / overcharge you. There is very little accountability in this field. Don’t use the one recommended by the agent or seller.
Despite what some dishonest notaires may tell you, the notaires know (and you too, now), that the laws changed as of January 1, 2021 and now the new maximum fees are 0.799% and they are allowed to give a 20% discount on their fees (including the mortgage surcharge) for properties over €100,000 sale price.
Make sure to get a specific breakdown of all the taxes and fees ahead of time. Due to a lack of accountability, many notaires will (illegally!) try to overcharge you. So make sure that their fee (not including the taxes) is not more than 0.6392% of the sale price for the portion over €60,000 (which is 0.799% minus the 20% allowable discount), and that they’re not sneaking in any unwarranted extra fees (like translation fees) — the rest of what you’ll pay should go to government taxes.
Here’s more info about France’s notaires and here’s how much you should budget to give the notaire (put 06 in the department field; note that this calculation does not take into account the 20% fee discount). To calculate what the notaire will / should charge you for their fee, pull up your calculator and put in the sale price, minus €60,000 (the fees for the amount under €60,000 are stupidly complicated), then times (x) that by 0.006392 (for example, the notaire fees on a €2 million property, you’ll need to pay the notaire €12,400 + the fees for the amount under €60,000, which come to €878, for a grand total of €13,278).
Remember: You are never obligated to finish a transaction with a particular notaire, and they are not legally allowed to bill you for partial work no matter what they threaten to scare you into keeping them as your notaire (they are only paid upon you fully completing the sale with them). If they are dishonest or try to overcharge, then give them a bad online review to warn others, report them to [email protected], and go to a different notaire.
Scam Warning: Hackers have been sending emails from notaires email accounts, with the correct € amount owed, but the hacker’s bank account details, for the deposits. Always verify the bank details by phone if you’re going to pay via wire.
Buying in the Black
This only applies if you’re buying directly from the seller, since agents won’t let you get in touch with sellers directly.
Beware of getting involved in ‘paying on the black’. This is where a seller might want you to pay them part of the price in cash directly in order to conceal part of the price from the notaire. This almost never happens (after all, it’s tax evasion), but it’s worth mentioning. This can help the seller reduce liability to capital gains tax while also reducing a buyer’s notaire fees, however, it is also illegal and can lead to serious problems for you:
- There are practical difficulties in paying the money and few safeguards — your money could easily be stolen.
- The tax authorities may dispute the price if they think it is too low and demand taxes relative to a higher price.
- If the property is a holiday home you are liable to capital gains tax on resale (which is far higher than the tax you pay when you buy). The purchase price upon which the gain is calculated would be lower: so the gain is higher, meaning you’ll pay quite a lot more in the long run.
- If authorities think there has been an attempt to avoid duty, they will impose penalties, which are payable by the buyer.
- It is tax evasion and carries the penalties that come with it.
The Official Offer
Once you’ve visited the Mairie to ask about the property and surrounding area, and you know as much as possible about the area and property, you can make an official offer (called a ‘compromis de vente’). A notaire will help you with this — but remember: the notaire’s interests are not aligned with yours (because they are paid on commission, and only if the sale is completed).
Make sure not to use the owner’s notaire, as they might advise the owner to wait for a higher offer (since they would make more money), or neglect to show the owner your offer. If you have your own notaire, he/she will follow up, as it’s the only way he/she will get paid.
We advise that you include an explanation of the offer price (start with a list of similar villas that have sold nearby with Google Earth screenshots, then the factors that led you to that m² price, and –optionally– the market trajectory).
Do not rely on verbal assurances or imprecise legal drafting.
It’s normal to attach lots of conditions (‘suspensives’) in the contract so you can get out of the sale if needed. Make sure your contract includes all of these clauses that let you back out:
- if the valuation comes back lower than your offer,
- if you fail to get a mortgage,
- if the survey shows that the villa or land size is smaller than _____ (habitable m² of the villa) and ______ (land size),
- if there are adverse planning restrictions or third party rights which might materially affect your enjoyment of the property,
- if there are any adverse easements (‘servitudes’) on the property (the contract should state that there are no easements, according to the seller),
- if there are existing mortgages affecting the property,
- if the results of a structural survey from a qualified surveyor (‘Expert de Batiment’) show any issues,
- if you can’t get the planning permissions you need (to build a pool, or for an extension, etc.),
- if there are claims upon the property by the local authority or the French State.
Many listings show inaccurate building and land sizes, so it’s important to verify both using an independent survey before buying. Make your offer conditional on the results of the surveys you’re going to perform, and negotiate the price down if the listing said it was larger than it actually is.
Conditional clauses concerning ‘sale subject to planning consent’ need careful drafting, not only in relation to the planning conditions that may be imposed, but also to a possible later legal challenge to a planning permission.
If contents are to be included in the sale (the kitchen and bathrooms count in this), an inventory (‘inventaire’) should be attached and a separate price allocated.
It is also possible for a penalty clause to be included in the contract to the benefit of the buyer so that, if the seller withdraws from the sale, they are liable to compensate the buyer. Make sure to also include a clause that states all the funds will not be released to the seller until you have obtained vacant possession.
Here are more details about what to look out for in the official offer contract.
Always remember that the notaires work for themselves, not for you. Your notarie wants the sale to go through (so they get paid), and will tailor the contract for that, limiting your rights. It’s advisable to get an independent 3rd-party to look over the contract before you sign.
SCI warning: Since the cooling off period only applies to offers made by a person and not a company, if you want to own the house using a company or a SCI, then you’ll need to make sure that your offer contract states that you can, at a later date, transfer the sale into a SCI / company name.
The Mortgage Clause: Make sure that your offer contract has a clause that lets you pull out if you can’t get a mortgage for the full offer price of the property. For example, your offer might be €1 million, but the bank might appraise the villa at €700,000, and offer you a mortgage only on that. Your contract needs to say that you can pull out if you can’t get a mortgage for €1 million, specifically.
Your real estate agent or notaire might tell you that this clause can get you out of the deal easily, in order to make you feel more confident putting in an official offer. In reality, you cannot simply call your bank and expect a refusal to benefit from this clause. You would have to prove that you have reasonably tried to get a mortgage and got several complete refusals from banks, within the time-frame allotted in the contract.
Even if by some oversight this clause is not included, provided the agreement does not expressly state that the property is being purchased without a mortgage, the law grants a presumption that a mortgage is being obtained. But it’s much safer to make sure this clause is included, and written clearly.
Make sure the clause includes the length of time during which the clause should remain valid and the main details of the mortgage – amount, duration, maximum rate of interest.
It is not unusual for the purchaser to be granted 45 days to obtain a mortgage offer, after which the contract can lapse. If you are resident, and with a stable income, this is normally ample time, but it may be all too short for an overseas buyer seeking a French mortgage so if this applies to you try and negotiate a longer period in the contract.
Vice Caché: A ‘vice caché’ is a hidden or latent defect in a property. Protection for buyers is enshrined in Article 1641 of the civil code. The seller is obliged to disclose all important information about the property that might affect the decision of the buyer, or the price they paid for the property. If they do not do so, then it is possible for a court of law to offer a remedy, such as a price reduction or annulment of the sale (which is why notaires don’t want you to know about this, since they lose their commission if there’s an annulment).
Not surprisingly, notaires sometimes seek to limit your use of the ‘vice caché’ protection by adding an exclusion clause the in the sale contract that limits the buyers rights once they find a serious hidden problem with the villa. Our advice to all buyers is that if your notaire does this, you consider them untrustworthy and switch notaires. If you don’t want to do that, you should 100% insist on the removal of this clause in the sale contract. The seller may well object to you doing so, but if they do, their motives need to be questioned. You should be very hesitant about accepting to buy ‘en l’état’ (as seen) unless you fully understand what you are buying.
Removal of Guarantees: Some notaires will add clauses that limit your rights and remove guarantees. This benefits the notaire (since they only get paid when the sale is completed) by limiting your rights and ability to cancel the transaction. Again, our advice to all buyers is that if your notaire does this, you consider them untrustworthy, leave an appropriate online review, and switch notaires.
The estate agent may ask for the 5-10% deposit (we suggest you only agree to 5%) to be paid to them, but it is much safer to pay the deposit to the notaire, because there is less likelihood of a problem in recovering your deposit if the sale falls through.
Be aware, a deposit is only normally recoverable outside the cooling-off period if the sale fails for reasons related to the contract clauses or the seller. Otherwise, the deposit is forfeited. Your deposit will be held by the notaire in ‘escrow’ as part of the purchase proceeds.
It’s not unusual for there to be conflict over the repayment of a deposit, either because the notaire delays in repayment, or because there is some ambiguity as to whether or not the contract condition has been fulfilled. That’s why, if you do sign a conditional contract, you would be well advised to pay only the minimum deposit possible, and to also ensure precise legal drafting of the conditions.
The Cooling-off Period
After the signing of the initial offer and deposit, you’ll have 10 days (including holidays and weekends) to cancel without penalty, and without explanation. After the 10 days, you will lose your deposit if you back out, so use those 10 days wisely.
If the contract has been prepared by a notaire and both parties sign the contract at the notaire’s office, the notaire can serve the cooling off notice on the buyer immediately following signature of the contract. However, many notaries serve the cooling off notice on the buyer by registered post or by email with a read receipt. The buyer has 10 days from the day after receipt of the notice to withdraw without reason.
If you want to withdraw, it requires certain formalities. It must be in writing and sent by registered post or by email with a read receipt to either the estate agent or notaire, depending on what is agreed in the contract. If the buyer has paid a deposit, the notaire must refund it, normally within 21 days of receipt of the notice of withdrawal. The 10-day period is strictly enforceable, so if the buyer tried to pull out 12 days after receiving the notice, the withdrawal could be considered ineffective and the buyer required to proceed with the purchase or lose his or her deposit.
Advantages to Getting a Mortgage
You should always apply for a mortgage, because the interest rate on mortgages in France is lower than you can make by investing the money. This means that the smart financial move is to take out a mortgage and keep your money invested.
Also, it comes with an official valuation / appraisal, that you can use for bargaining power.
If your money is held in a currency other than euros, it may also save you money. If you choose the maximum LTV (loan-to-value), this allows you to better hedge your exposure to any exchange rate fluctuations as French mortgages have no (or very low) early repayment charges. Instead of converting the full purchase price into euros (at a potentially bad exchange rate), you only have to transfer the deposit and notaire’s fees. This means you can wait until the exchange rate is better and pay back your mortgage then, which can knock thousands of the purchase price.
Using a SCI
An SCI is a fiscally-transparent type of French company that is exclusively used for the ownership and management of property. Many notaires will recommend this, often because they get paid to create them, so figure out for yourself if you want to use one. Here’s an explanation. If you decide to use one, you could also create it online for €99. You can also look into the benefits of having a company own the SCI.
Despite these potential advantages, as a result of legislative and fiscal changes in recent years the arguments for owning a family property through an SCI have become weaker, so you need to consider carefully whether it is really necessary for you to use an SCI. There are plenty of professional advisors who will no doubt tell you it would be worthwhile to set up an SCI, but if they are the same advisors who will earn the fees from setting up the company (including notaires), then you need to weigh that advice carefully.
Keep in mind that if you go the SCI route you’ll need to submit yearly tax returns for the SCI, so the costs are ongoing. The non-filing of returns can result in an annual tax of 3% of the value of the property as well as late interest and fines.
We recommend you ensure all discussions with your advisors are recorded, as sloppy advice is easily given if professionals do not feel they can be held accountable for it!
The Final Signing
About three months after signing the ‘compromis de vente’ the notaire organises the ‘acte de vente définitif’ signing, payment of the final settlement and taxes and exchange of keys. It is usual to split the costs of the annual ‘taxe foncière’ pro-rata at the time of sale. Make sure the notaire provides a draft of the deed prior to the final meeting, so it can be shown to a professional adviser for comment.
Make sure to view the villa on the eve of signing the final ‘acte de vente’, so you can see exactly what you are paying for. It could avoid surprises like radiators, shutters, appliances, or door handles being stripped out. Check that there has been no damage and that it is empty of all the seller’s possessions, except any that you wanted. If something’s not right, ask the notaire to hold back part of the price until the property is as it was when the ‘compromis de vente’ was signed.
Note: If you notaire overcharged you, was incompetent, or didn’t act in your best interest (as is common), you can start legal proceedings here.
Buying a villa? Make sure to read all of our guides!
Our guide to where the market is headed includes: French Riviera real estate market predictions, current & historic pricing trends in the market, and the reasons why prices will continue to fall. Plus, supplementary guide to Russians & their impact on the French Riviera real estate market.
Our guide to real estate listings includes: how to find villas for sale, what to look out for, misinformation and warnings, auctions & foreclosures, buying direct from sellers, why timing is everything, and the reason why only about half of villa sales are publicly listed.
Our guide to scams and secrets includes: warnings about the unethical tricks that agents, notaires, sellers, developers and builders use to get more money out of you. This is a must-read, and the whistleblower guide that those in the business don’t want you to see.
Our guide to real estate agents includes: the dishonest things agents will tell you, how real estate agencies operate, buyer’s agents and property finders, why you should avoid illegal and non-local agents, and who to trust (an important warning).
Our guide to pricing & determining a villa’s market value includes: why there’s so much extreme overpricing, how to estimate a villa’s market value (what it’s worth), and a step-by-step guide to finding your offer price.
Our guide to important things to find out includes: diagnostic reports and surveys, sun & micro-climates, potential issues with the view, housing taxes, the age, internet and mobile access, danger (red) zones, health risks, privacy & space issues, nearby problems, what you’ll actually own, illegal additions and structures, why they’re selling, how to verify, and more.
Our guide to things to consider includes: your actual costs, issues with buying a ‘newly renovated’ villa, learning about local crime & squatters, and questions to ask yourself.
Our guide for after you buy includes: insurance pitfalls, tips for second homes, renting your villa, renovating, and what to know about hiring people.