How to invest in French Property

In this second of a series on investing in French property, Guy Watson-Smith of Azur-Accom in France, gives a step-by-step guide to buying a residential unit in that European country.

The process explained, step by step:

1. Identification of the property.
2. Offer and agreement. Negotiations are generally short and agreement is often reached through the agent in a day or less. Protracted negotiations are considered as unsavoury and not encouraged. The furniture can sometimes form part of the negotiation (if it warrants it). It often suits the seller not to have to move, store or dispose of bulky furniture so bargains can be had.
3. A sale agreement - the "compromis de vente" is compiled by the agent. It follows strict rules and is designed to protect the buyer more than the seller. It covers special conditions that may have been agreed, as well as standard conditions relating to deeds searches to be performed by the notary, and physical checks for termites, asbestos, etc. This document is normally in French and should a legal translation be required, the cost would be around €300.
4. The buyer or his/her representative signs the "compromis de vente" and the agent then takes it to the seller.
5. Once both have signed the buyer has seven days during which he may pull out of the agreement for any reason. The seller does not have that privilege. He is legally bound and can not renege - so no British-style "gazumping" is possible. After seven days the agreement is binding, except if the buyer fails in his application for credit, in which case the agreement becomes void and the disappointed buyer is refunded his deposit (see 7) in full. If he (or she) withdraws for any other reason, there is the risk of forfeiting the deposit or part thereof (seller's discretion, although he or she would have to prove in court that he has been financially prejudiced - not an easy option.)
6. A notary is appointed. The agent will help. Every property transaction in France takes place through notaries who are highly trained and esteemed. They must ensure that every legal requirement is met and that the rights of every party are protected.
7. Transfer of deposit. The buyer must, on signing the "compromis de vente" transfer 10% of the purchase price to the holding account of his notary. It will form part of his payment on signing day.
8. The buyer must apply for credit if he requires it. The application should take a month, and in France the primary criterion for granting credit is the applicant's income at home. Ability to repay the loan is examined.
9. The notary must commission all the required physical checks (asbestos, termites, etc.) and must complete the deeds' checks.
10. The lending bank will make a loan offer. It must be signed by the buyer but only after a compulsory 11-day "cool off" period. Once the offer has been formally accepted, the notary can set a date for signing.
11. Funds. The notary will communicate the amount of funds required from the buyer, being:

• Purchase price;
• Plus notary's and transfer fees;
• Less deposit originally lodged;
• Less the amount of any loan granted.

These funds must be transferred to the notary's holding account before transfer.

12. Transfer. On the appointed day the parties and their notaries meet, and with some ceremony (which may include reading every document in full and in French!) cheques are handed over, and the keys and property change hands. If the buyer is not present, the notary represents the buyer with a power of attorney. This is a very good idea for non-French speaking buyers is concerned, because otherwise the notary is obliged to hire a very expensive court-appointed translator and the proceedings take three times as long.

Realestateweb's guest columnist Guy Watson-Smith runs a successful business - Azur Accom - that provides investment and rental services on the French Riviera, along with other family members. His series continues tomorrow, when he looks at some of the payment options.

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by Another copy and pasted article from some obscure website stick on this tin pot website- This website is nothing but a advert for big business, banks and estate agents....still dont know why the f$%# i actually surf it? on December 18 2007, 07:23 Find this comment inappropriate? Report it

Why indeed ... What is the point of making such a comment? by Ringo on December 18 2007, 16:40 Find this comment inappropriate? Report it

Never been a better time to invest in France... French housing bubble set to burst By Ambrose Evans-Pritchard Last Updated: 1:43am BST 28/03/2007 French property construction plummeted 15.1pc in February and home prices have begun to slip in the first sign that . .more America's housing woes are spreading to Europe. The surprise data came as the US Conference Board's confidence index fell sharply from 111.2 to 107.2, suggesting that housing troubles are starting to unnerve American consumers. The Dow Jones was off 75 points to 12,394 in jumpy trading, while the dollar renewed its downward slide. advertisementFrench house prices have shot up by 210pc since 1995, compared with 190pc in the US, much to the delight of 180,000 Britons with second homes across La Manche. But after years of double-digit gains the pace slowed to 7.2pc last year and turned negative in January with a fall of 0.6pc. "The market has turned in France, and this is the trailer for the movie we're are going to see across Europe this year," said Jean-Paul Six, chief Europe economist for Standard & Poor's. "I think we will see falling house prices in France in coming months and that is going to cause headlines. It is the delayed effect of rising interests rates, which have already gone up seven times to 3.75pc, and are going up further. Spain, Ireland, Scandinavia, Holland and Italy - as well as Britain - have all enjoyed housing booms, with much of Eastern Europe playing catch-up. The big exceptions have been Germany and Switzerland, where property has been flat for a decade. More than 93pc of mortgages in Spain are on floating rates, making the country vulnerable to Europe's monetary squeeze. "I can see a mortgage crisis building. We have a serious property bubble in this country and everyone is in denial; it's worse than the US" said Manuel Romera, director of Madrid's Instituto de la Empresa. Spanish house prices have jumped 270pc in a decade, even though more houses are being built there than in France, Germany, and Italy combined. The central bank has warned repeatedly that the market is overheating, but it is virtually powerless to stop it after Spain joined the euro and gave up control over monetary policy. France looks subdued, by comparison. Almost all mortgages are on fixed rates, and tough lending rules have prevented the emergence of a US-style sub-prime market. French banks usually restrict lending to 75pc of the home's value. The ratio of household debt to disposable income in France is a modest 65pc, compared with 115pc in Spain, 146pc in Britain, 171pc in Holland, and 190pc in Ireland. Even so, Mr Six said France was vulnerable to an emerging glut of houses after record contruction of 420,000 new homes last year. According to France's OFCE research institute, house prises are 25pc overvalued. "If there is a property crash across the Atlantic, there could be contagion to Europe," it said. . .less by Freelance Mycophagist on December 18 2007, 09:37 Find this comment inappropriate? Report it

Property for pension.... No different to that article.... Trying to boost the property market worldwide.......... by JD on December 19 2007, 05:45 Find this comment inappropriate? Report it

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