The acquisition process in France does not consist of a simple exchange of letters, but is structured in various stages. At the beginning of the process stands usually a “promesse d’achat”, a written offer by the potential buyer. Although this step is not mandatory, it is usually undertaken in case the initial asking price is not matched by the potential buyer.
After the parties have reached an agreement about the main parameters of the sale, they sign a “compromis de vente”. The “compromis” already contains the terms of the sale, and constitutes, in general, a binding contract for both parties. The signing of the “compromis” is accompanied by a deposit, the “indemnité d’immobilisation”, of usually approximately 10 % of the purchase price.
The buyer has a seven day “cooling-off” period during which he can withdraw from the contract (by registered mail and confirmation of receipt) without incurring any legal disadvantages.
The seller, however, cannot withdraw from a written “compromis” without cause. After this cooling-off period has expired, the contract becomes binding for both parties. At this stage, the buyer cannot withdraw from the contract without losing his deposit. The deposit is, of course, fully accounted against the purchase price upon the realization of the sale. However, the “compromis” may contain a number of suspensive conditions (“clauses suspensives”) upon which the validity of the contract is made dependent. For the most part, these conditions concern the ability of the buyer to secure (mortgage) financing for the purchase through a lender. However, other conditions may include the ability of the buyer to obtain building permission.
In case such a condition is not fulfilled, the buyer has the right to abstain from the acquisition without contractual penalties. The signing of the final contract, the “acte de vente” or “acte authentique,” takes place in a notary’s office. In France, a “notaire” is not a mere “notary public” in the US sense, but a highly regarded, qualified lawyer who acts in the capacity of a government official. He is required by law to act impartially, i.e. for both the buyer and the seller, ensuring that the sale conforms to all legal requirements. The published sales price usually includes the commission of the real estate agent ; in France, the sales commission is paid by the seller.
However, the negotiation process will of course determine the structure of the final deal. In addition to the agreed-upon purchase price, the buyer pays in any event the notary’s fees as well as the registration fees (transfer tax, registration costs, etc.) which usually amount to around 10 % of the purchase price.