Buying a House With Land in France

In France, buying a house with land can occur anywhere but a buyer needs to know that the best areas to get good value for money can be found in the outer suburbs and in the countryside. For those not concerned with price, but want the best, can pick and choose from the 20 neighborhoods around the city

Processes involved in buying a house with land

The processes for buying and selling real estate are standardized to follow similar paths with very minor deviations.

Process

An initial offer is made by the buyer
The buyer will instruct a French notaire to meditate between the two parties
The seller may instruct another notaire to act on his behalf and will share the same fee which is normally paid by the buyer.
Following this, either a compromise de vente or promesse de vente to purchase is prepared and signed. This is done within a week of the seller entering an oral agreement with the buyer. The contract can be prepared by the real estate agent or a legal advisor but not the notaire who is like a tax collector for the government.
The seller must ensure that all terms are included in the contract and the buyer has understood all the terms entered in the agreement.
After the signing of the contract, a “cooling off” period of 7 days is given to the buyer to ponder whether or not to make the purchase. If he decides to purchase, he must pay a deposit of 10% of the purchase price to the 3 professionals (notaire, legal advisor and agent), who will hold the deposit as a stakeholder.

Withdrawal

After the signing of the sales agreement, the seller is fully committed, but if he wishes to withdraw, the deposit of 10% paid by the buyer must be returned in full.
Under French law, the buyer has a cooling off period of 7 days after the signing and will receive the full amount of his deposit if the seller wishes to withdraw after the signing
If the buyer withdraws on the 8th day after sighing, the deposit will be paid to the seller.

After the signing and deposit payment

The legal advisor or notaire will check on the title and make enquiries into any developments intended in the vicinity of the property.
The seller may be required to provide information on the presence of lead, termites and asbestos in the building. The seller is obliged to provide an energy diagnosis (diagnostic de performance énergétique) on the energy consumption rate for the premises and any environmental impacts from green house has emission.
The seller is also obliged to provide a Gas Diagnostic Certificate (Un état de l’installation intéieure de gaz naturel) showing gas installations exceeding 15 years in duration along with safety issues with the gas system.

The finishing touches

Both parties will meet at the notaire’s offices to sign the acte authentique or the deed of purchase during which the buyer pays the balance of the purchase price. The notaire will use the money to repay any outstanding mortgage, if any.

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Defining the Realty Landscape of France

Everything about real estate in France is meticulously well organized and simple to understand. Perhaps the most striking aspect is the centralized nature of the realty enterprise, which pivots on four main organizations, with 3 of them specializing in deals while the 4th focuses on administrative approaches.

Definitions and explanations of professional names and terms

Real estate agent – All the agents in France are required by law to be licensed and to be members of a recognized real estate organization. The agent is required to be present during any real estate transaction to provide expert assistance to the vendor and buyer.

Notaire – The notaire is a government official similar to a tax collector who is involved in real estate transactions of buying and selling. He is responsible for collecting the various tax payments that are made by the buyer and seller in any property transfer transaction. The notaire is also responsible for drawing up documents.

Legal advisor – This professional is a qualified lawyer who usually represents one of the parties to deal with the legal aspects of a real estate transaction. Very often, both parties will seek to be represented by a different legal advisor or notaire, in which case, the two professionals will share in the payment for their services.

Property search agent – The search agent (marchand de listes) specializes in the search for property mainly on behalf of a potential buyer. His search often leads him to archives and other government repositories where records are kept. The information he provides the buyer is valuable and are needed for facilitating purchase transactions.

Property manager – The property manager (gestion immobilière) usually involves himself in the early stages of negotiations with the buyer. He is able to provide detailed information about the real estate which is the subject of a contemplated sale. He negotiates on behalf of the vendor.

Property checker – This professional also known as an expert foncier who is usually an architect who is engaged to check on the state and value of real estate.

Builder – Also referred to in French as a macon, he is the builder and usually engaged by the owners of real estate, developers, companies and societies who wish to invest and build.

Land surveyor (geometre) – The land surveyor is required when an intended sale involves a lot of land for example in the country side. The surveyor will affirm any redefining of boundaries, confirming existing boundaries shown on the plan or creating new boundaries in the attendance of the vendor and buyer and neighboring landowners as witnesses.

Mortgage broker – The broker works with different French banks and other mortgage providers and acts as the middleman between the lender and buyer. They possess professional indemnity insurance and are required to be registered with bankers and mortgage providers they represent. The broker receives commissions for services rendered.

Architect – A purchaser of an old property may require the attendance of an architect to examine the building and submit his estimate of the cost prior to purchase. The architect is adept at acquiring permissions and certificates to process work.

French real estate terms

Specific terms are used to refer to aspects of real estate in France. The main terms are listed below:

French – English explanation

Abri – a small outbuilding such as garden, shed or shelter

Acajou – mahogany

Acceuil – reception or welcome

Acompte – deposit

Acte Authentique – Deed of Sale

Affaire – bargain

Agence immobilière – real estate agent

Attestation d’acquisition – a written certificate from the notaire that the real estate purchase has been completed

Bail-lease

Batiment – building

Bon de visite – a ‘suspect’ form the tenant signs before viewing a house with a French agent agreeing not to approach the owner to make a personal offer on a house but to act through a real estate agent. This is not true and it shouldn’t be signed.

Compromis de Vente – initial document in the sale process which legally commits the two parties

Fosse septique – septic tank

Frais de notaire – total amount of money paid to a notaire on top of the sale price (made up of notaire fees, registration duty, land registration duty and other charges).

Meubles – furniture

Plomerie – plumbing

Prêt immobilier – mortgage

Salle de bain – bathroom

Sale d’eau – shower room

Salon – dining room

Séjour – living room, lounge, sitting room

Société Civile Immobilière (SCI) – a company which can be set up exclusively to purchase property. Used often when several families are making a joint purchase.

Surface habitable – space in sq. meters that offers accommodation but excluding the bathroom and garage

T – Type (T3, T4) – property classification as to type and size. The number refers to room partitioning hence a T3 room will have 2 bedrooms and a living room

Taxe d’habitation – a government tax on property payable on a pro-rata basis

Thinking of living, holidaying or buying in France?

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Click here to read about buying real estate in France [http://www.propdom.com/index.php/where/europe/france/france-real-estate]

PropDom – the worldwide property domain for all things regarding holidaying, buying a second home, investing in property and retiring abroad.

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PropDom has covered the following countries so far: UK – France – Portugal – Spain – Mexico – Brazil – Australia – New Zealand – Kenya – Morocco – South Africa – Egypt – Mozambique – Singapore – Thailand – Pakistan

PropDom knowledge section covers: Investment – Financing – Construction – Design – Legal – Furniture – Valuation – Surveying – Terminology – Glossaries – and more.

Regulations Aiming to Turn Around a Sluggish US Housing Market

In interesting news, the US House of Representatives has voted overwhelmingly to reduce some requirements and ease burdens on home loans for certain types of homes. At the height of the financial crisis, homeowners across the country were forced to foreclose home loans due to their inability to pay mortgages and home loans. In the aftermath of the crisis, strict laws were enacted to reign banks and other financial institutions from making home loans easily available to everyone.

The flashpoint of the economic recession of 2008 was home mortgages. Just before the crisis, investors were lured by banks into investing in high-interest mortgages that were risky; this became apparent when the rates of interested went north and the bubble surrounding the real estate industry burst in 2007-08. As default payments by millions of mortgage home owners hit the roof, the value of investments held by banks and institutions went south and hit rock bottom.

The recent legislation is seem as a move to ensure that the consumer public can afford to repay loans; lawmakers insist that it will provide great relief by bringing regulations within reach of the average American with low to moderate incomes who are intending to buy homes. However skeptics still maintain that this will have a very drastic impact on prospective home buyers looking to obtain credit to buy first-time homes. A member of the committee on Housing Financial Services comments that the legislation will end up rolling back consumer protection completely and expose them to predatory practices indulged by some in the financial market which led to the crisis in the first place.

A substantial percentage of first-time home buyers in the US who pick up mobile homes are among the most economically weak and low-income earners. The overrriding fear is that this segment will be subject to tactics used by banks to lend large sums at higher interest rates, luring them to invest in more expensive mortgages by working around regulations even when they qualify automatically for low-cost alternatives.

In the traditional real estate market, home owners are already exposed to risks that are significant and can have serious impact on their earnings and savings; factors like inability to refinance, higher interest rates and depreciation are the prime risks. For example, depreciation is a factor that sets in almost as soon as a home is purchased.

During the financial crisis, it was extremely difficult to get ‘honest data’ from banking circles regarding the state of housing finance and home loans. Piecing together information from bank reports was certainly not providing an accurate picture because banks for one were delaying from showing home foreclosure filings in their monthly reports. On the other hand, home owners were simply unable to meet mortgage payments and stopped paying altogether, perhaps even using it as a strategy for foreclosure. That said, the real picture of the US housing market may still not be completely understood.

It is however, pertinent to say that a home foreclosure filing is one of the worst problems of home financing. If the new regulations can stave off further crisis, then we can assume that the housing segment is well on its way to recovery.